Lead & Rush Investment Co - BPO Industry Growth Indicators

Nov. 16, 2009 - PRLog -- Domestic BPO market to quadruple to $6.82 billion by 2013: Source: IDC

With almost 500 players, the Business Process Outsourcing (BPO) market within India is set to reach approx. $6.82 billion  by the year 2013. Providing a compounded annual growth rate of 33.3 per cent from the $1.62 billion loggedin 2008, according to a major industry analysis company.


The report further shows positive market indicators of an economic recovery, expansion and unbundeling of the major outsourcing deals and large unaddressed white spaces such as regional language services support the optimism that the domestic BPO industry would be able to achieve its growth target over the next five years.

BFSI (banking, financial services and insurance), telecom, utilities, travel and hospitality segments of the BPO industry are expected to continue to grow over the forecast period. 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, which are expected to play an increasing role in the growth of domestic outsourcing industry, says the study. Currently, such sub-regional or local BPOs are estimated to have capabilities to offer services in 10-15 Indian languages.

“The domestic BPO market shows promise of growth, especially in verticals like BFSI and telecom in the short term. The concern areas for the BPO industry, that services overseas customers, such as rupee-US dollar volatility, rising infrastructure costs in Tier-I cities and over-dependence on North American and European markets are expected to have minimal impact on the domestic BPO sector,” says Arpan Gupta, Lead Analyst for the BPO, Industry Verticals and Government sectors at IDC India.

The domestic market would also 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’.

Presently, voice processes in the Indian domestic BPO market contribute 55 per cent to overall domestic revenues, while non-voice market makes up the rest. But Arpan feels that as the industry enhances focus on human resource outsourcing, legal process outsourcing, billing and high-end analytics, the BPO market would see a gradual shift from voice to non-voice processes.

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