Indian BPOs shine in global meltdown

MUMBAI, INDIA: Gartner Inc, a provider in information technology research and advisory, today announced that the Indian business process outsourcing (BPO) providers are giving a stiff competition to Western BPO providers.

In 2002 there were few, if any, India-centric vendors in the top 150 worldwide providers, but by the end of 2008, the top 20 India-centric BPO providers accounted for $4 billion in revenue, representing 5 per cent of the $80 billion revenue of the top 150 BPO vendors, Gartner said.

Gartner analysts expect this increase in revenue to be maintained, with the BPO market share of Indian vendors expected to nearly double by 2010 and expects this trend to accelerate because of economic pressures that are leading to demand for low-cost BPO.

“Indian BPO providers are swiftly evolving to balance exposure to vertical industries, currency and legislation issues,” said Arup Roy, senior research analyst, Gartner.

“Their strategies include investing in onshore and nearshore delivery, and pioneering new area of analytics services or knowledge process outsourcing (KPO) where Indian BPO players are shining,” he added.

Although there are still no Indian vendors in the top 20 global BPO players, half of the top 20 India-based BPO providers now operate local U.S. and European sales and delivery centers.

Indian BPO providers have had the most success servicing English-speaking requirements, from North America and the U.K.

North America has been the most successful sales location, where the top-20 India-centric BPO providers generate about $2.2 billion in revenue, said the release.

Western Europe showed strong growth, mostly in the U.K, and accounted for $1.4 billion in revenue for the top 20 Indian BPO providers in 2008.

From a vertical-market perspective, Indian BPO providers also had more success in telecommunications, manufacturing, insurance and banking than in government and retail, which are not traditionally sectors that have been strong users of offshore outsourcing, added the release.

Overall, Indian BPO vendors achieved growth rates between 12 per cent and 200 per cent, though some of them are starting from fairly small revenue in the first place.

Many of these vendors are starting to grow revenue from continental Europe and via partnerships with indigenous BPO providers. Gartner said this will also help Indian BPO providers understand local business cultures.

“It is highly likely that many new competitors will emerge from India during the next few years. Contact centers and analytics services will likely see the highest growth, having the lowest entry barriers because relatively little technical or specific process expertise is required,” said Cathy Tornbohm, research vice president, Gartner.

She further added that “these barriers will also be kept relatively low for other types of BPO as prospective clients with existing Indian player IT relationships will look to Indian BPO players to balance their portfolio of bidders”.