BPO potential high in India, Nasscom clarifies

NEW DELHI: Clarifying the recent media reports based on a Gartner India report, Nasscom, has maintained that the Indian ITES industry has a robust growth potential. Nasscom re-iterated that the Indian ITES target of $21 billion - $24 billion by 2008 is very much achievable based on India acquiring 25 percent of total BPO offshore market ($62 Billion in 2008) and 12 percent of the market for other services such as animation, content development and design services.

In a separate rebuttal, Gartner India has reiterated that India continues to be the destination of choice for BPO. Nasscom-McKinsey Study has projected that the Indian ITES industry would achieve $21 billion-24 billion by 2008. According to Nasscom officials, the Indian ITES industry growth is based on very strong fundamentals and a proven value proposition to the customers.

We already have exports of $1.5 billion in 2001. Indian companies are today looking to address the entire spectrum of ITES services such as animation, transcription and translation services, market research and GIS over and above BPO.

Nasscom officials further added, "We believe in the Indian ITES industry opportunity. However, the industry will need strong support from the government, as this sector is heavily dependent on quality infrastructure. The companies need to be create capacity carefully and observe healthy pricing and recruitment practices."

In another move Gartner, while clarifying the recent media reports based on Gartner IT Trends report release, has maintained that India remained the destination of choice for BPO both for MNC’s setting up their insourced operations and for outsourcing to third party vendors.

India is still the undisputed leader for both IT Services with an approximate 80 percent market share and also has a substantial share of the BPO offshore market.



Sujay Chohan, Country Director, Gartner India, further clarified, "We believe the Indian BPO industry has a tremendous opportunity." However, he cautioned the industry not to get carried away by the hype, which eventually leads to over capacity and unhealthy competition, triggering, what he called a race to the bottom.

The industry is already on the back foot due to the negative publicity over the recent travel warnings. Globally, the offshore BPO industry is still in it’s infancy and will need not only strong support from the government but also a self regulatory (industry) mechanism to ensure continued success.

Chohan, who is also the Research Director for BPO-APAC, referring to certain comparisons made with the NASSCOM report in sections of the press, stated, "The Gartner IT Trends report does not include animation, medical or other (legal) transcription, GIS, market research, data search, R&D, network consultancy, translation services and other non-business processes".

Gartner tracks only the business processes, which are IT enabled and which are outsourced to third party vendors, he said.