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The BPO sector in India is going through a bumpy phase this year. Based on some of the recent indicators, industry observers believe the expected result may be mild compare to the previous five years, which was at 14 percent.
The first quarter of 2007 witnessed the lowest number of contracts signed since the first quarter of 2003. The contract value was also the lowest compare to third quarter of 2002 as pointed out by Mr.Indraneel Banerjee, project director, Technology Partners International, a sourcing advisory firm.
The industry also witnessed a shift away from large multi-process BPO agreements to single function contracts of a smaller size.
While the industry saw a minor downslide this year in BPO globally, the Knowledge Process Outsourcing (KPO) has showed positive signs. India has already made its presence felt in the KPO sector, and now it remains to see the consistency. India should realise that "innovation is the key factor in knowledge process outsourcing and this enable them to capture new markets". Initially the KPO was based more on data transaction, now the spotlight is on providing business value to a client. This strategic transformation is likely to help the sector to grow.
The KPOs offer huge potential for India in the outsourcing industry; companies will have to adopt innovative ways and put in high degree of investment in domain and process capability, besides employing people with specialised skill-sets.
Another factor that may need amendment to keep the BPOs going is perhaps the pricing factor. In a customer-driven model, pricing is usually based on the number of employees working on a particular project. But this cannot be the same with BPO, which has greater flexibility; here the pricing could be based on the value added to the business.
Another opportunity that India can seize on apart from financial data service can be patient details, which is highly sensitive. Indian companies can look beyond claims processing in healthcare and do R & D productivity, which is considered to be vital.
At a recently held seminar, which was participated by Nasscom and offshoring companies, Nasscom in a bid to help IT/ITES to deal with this situation suggested, that educational institutions and industries should be encouraged to develop IT finishing school-oriented programme to support entrepreneurial activity. It is here that finishing schools bridges the gap between industry requirement and the quality of talent coming out of colleges..
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