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Indian BPO companies have started providing more sophisticated services, according to a Wharton-Boston Consulting Group report
Investing on the labour value proposition was a short-term planned offshoring strategy for Indian BPO service providers. Moving up the value chain was a part of the "growing up" plan, and Indian BPOs are now beginning to make their presence felt in the high-end of the BPO work, commonly known as KPO or Knowledge Process Outsourcing.
This was endorsed in a recent report, Beyond the Back Office, by the Wharton school and Boston Consulting Group. The industry seems to have achieved critical mass in its quest for providing KPO, where skills, judgment and discretion are the tools. This is a far cry from the industrys positioning during the ITO boom of early 1990s when the bulk of the work constituted data entry, standard processes and conversion assignment in the wake of Y2K, says the report.
This is a significant development because the arbitrage in the high-end information analysis space is much higher. Ravi Aron, Senior Fellow at the Wharton School illustrates his case by pointing out three Indian BPOs - Pipal Research, Office Tiger and Pangea3 - all of this companies are working at the very high end of the knowledge-process work. According to Ananda Mukherji, CEO of Firstsource Solutions "Pipal Research works on the extreme end of even the research space. It spends between $75,000-$100,000 on a variety of databases "as you cannot always Google everything," says Manoj Jain CEO and Founder of Pipal Research. Pipal's fee ranges from $20-$100 an hour for its specialist research support products.
Another BPO organization like Office Tiger, offers high-end decision-support services for clients, including some of the world's largest investment banks, financial institutions, legal firms and retail chains. Panagea3 cater legal and related services and has more than 65 attorneys and 25 patent engineers doing specialized background legal research for patent related and other cases.
While BPO firms have been successful in providing KPO-related work, IT services firms have illustrated this by acquiring more sophisticated deals. From coding and sub-contracting work, IT services firms have been able to bag deals as primary vendors moving shoulder to shoulder with the big five of ITO services. The ABN Amro deal, which was won collectively by Infosys, Tata, Patni, IBM and Accenture, broke the glass ceiling as far as Indian vendors were concerned. Tech Mahindras winning of $1 billion deal from British Telecom to provide technical support is the single largest IT outsourcing deal won by an Indian company.
To make such deals consistent, Indian companies are becoming true multinationals like Toyota US or Sony US . Indian companies hire local professional aggressively. Hiring senior people from the industry locally will provide direct access to the CTOs and CEOs, which will bring in high-end consulting work instead of the routine development assignments
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