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Infosys BPO, the outsourcing arm of the second largest software company Infosys, has set up a new unit for its foray in the domestic business process outsourcing BPO business in 2008. Currently, the company doesn't have any Indian clients. Infosys BPO expects to get the business from three key verticals government, banking and global Indian Companies in the Indian market. In banking, Infosys is already serving some Indian clients through its core banking solution, Finacle. Infosys BPO would try to leverage on that opportunity, said the companys chairman and managing director Amitabh Chaudhry.
Driven by a boom in verticals such as telecom, banking, financial services and insurance, the domestic outsourcing market is growing at 56 percent to touch Rs 36,781 crore by 2010 from an Rs 6,130 crore in 2006. Besides, a strengthening rupee against dollar has hit the bottomlines of IT ITeS Companies as most of their revenues come from the US. All these factors have made BPOs, like Infosys, to turn to the domestic clients.
Chaudhry said as margins in the domestic business are low up to 10 percent, the company would have to tackle the Indian market in a different way, which is a tough task. We have big plans for the Indian market. But its not going to be very easy because if you use the same approach here, you will end up with a lower margin, he said.
As an increased number of Indian Companies are trying to focus on their core business by outsourcing specialised functions to third parties with domain experience, Companies such as IBM Daksh, MphasiS, HTMT, Intelnet, EXL Service, vCustomer, Firstsource as well as some banks, through their subsidiaries, are also eyeing a pie of this market.
When BPOs were set up in India in the 90s, the market was not large enough, forcing most Companies to find opportunities outside the country. But now, Indian firms are adopting global best practices, and Bharti Airtels deal with IBM was a good example.
According to experts, this is the beginning, and, Companies would like to outsource many more things from customer service to recovery process, in order to ensure better management and cost reduction. Companies in manufacturing especially automobile, government and utilities are also expected to drive the next phase of growth.
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