IDC India reveals that the industry would evolve into third-party 'transformational outsourcing' relationships from the existing captive dominated market structure. This implies that rather than merely running isolated processes for customers, BPOs would engage more deeply to identify and transform core business processes to add greater market value in the 'creation and delivery of end products and services'.
The industry currently offers a range of services from customer care to research and analytics. The BFSI vertical contributes the lion's share of 37 per cent to revenues, followed by telecom contributing one-fourth to it. Other verticals -- utilities and services, energy, food and hospitality, aerospace and automotives, consumer durables, government -- contribute 17 per cent, while the travel segment contributes eight per cent to the revenue.
Positive market indicators of an economic recovery, unbundling of mega outsourcing deals and large unaddressed white spaces such as regional language services support the current optimism that the domestic BPO industry would be able to achieve its aspired growth target over the next five years, the research firm predicts. BFSI, telecom, utilities, travel and hospitality segments of the BPO industry are expected to continue to grow over the forecast period.
"The domestic BPO market shows promise of growth, especially in verticals like BFSI and telecom in the short term," says Arpan Gupta, lead analyst, BPO, industry verticals and government sector, IDC India. "The concern areas for the BPO industry, that services overseas customers, such as Rupee-US Dollar volatility, rising infrastructure costs in Tier-I cities, over dependence on North American and European markets are expected to have minimal impact on the domestic BPO sector."
However, it is non-English BPOs in Tier-II and Tier-III centres that can provide services to the telecom and aviation sectors at a lower overall cost that are expected to play an increasing role in the growth of domestic outsourcing industry, according to the IDC India study. Currently, such sub-regional/local BPOs are estimated to have capabilities to offer services in 10-15 Indian languages.
Tier-II and Tier-III cities like Kochi, Nagpur and Chandigarh have fast emerged as the new BPO destinations. However, higher training costs in Tier-II and Tier-III cities and lack of availability of an adequate talent pool continues to be an area of concern for players.
"The domestic BPO market shows promise of growth, especially in verticals like BFSI and telecom in the short term," says Arpan Gupta, lead analyst, BPO, industry verticals and government sector, IDC India. "The concern areas for the BPO industry, that services overseas customers, such as Rupee-US Dollar volatility, rising infrastructure costs in Tier-I cities, over dependence on North American and European markets are expected to have minimal impact on the domestic BPO sector."
"As the industry enhances focus on human resource outsourcing (HRO), legal process outsourcing (LPO), billing and high-end analytics, the BPO market would see a gradual shift from voice processes to non-voice processes," Arpan added. |
Its an excellent opportunity for Tier-II, Tier-III Cities.