Despite growing concerns in the US over Business Process Outsourcing, global technology research and advisory firm Gartner has projected BPO exports from India at $13.8 billion by 2007, up from $1 billion in 2002.
This is interesting as Gartner expects India's revenues via BPO exports to go up to only $1.2 billion for 2003, which would still mean a 66 per cent market share of the global offshore BPO market.
This will be supplemented by significant additional revenues from internal company operations, and US firms setting up their own delivery centers out of India.
The global offshore BPO is expected to reach $1.8 billion in 2003, a 38 per cent increase from the 2002 total of $1.3 billion, according to Gartner. In 2003, offshore deals is expected to account for just 1.5 per cent of the BPO market.
"If enterprises, which have been developing offshore sourcing strategies over the last few months, successfully conclude pilot projects, the growth in offshore BPO during the next couple of years will be significant as a result of contract expansions and new adopters," Sujay Chohan, research vice-president at Gartner, said.
"Organisations have been cautious in their adoption of offshore BPO services, so growth in offshore delivery is expected to be continuous, but moderate compared with the excessive hype around the concept last year," Chohan said.
Although India has inherent skills related to transaction processing, Indian service providers cannot expect to target the higher value and more lucrative BPO services until they acquire and demonstrate their process skills and industry knowledge to offer process transformation capability, a Gartner statement said.
"Most of today's offshore BPO opportunity remains at the level of out-tasking a component of a business process and relegated mostly to contact centers and transaction processing," Chohan added.
Gartner said while offshore BPO is growing, it is still a nascent market. Gartner conducted a survey in April 2003 with 250 US clients of BPO, which showed that 1 per cent of these enterprises are currently outsourcing BPO services offshore and that 19 per cent are considering outsourcing processes offshore within two years.
Debashish Sinha, principal analyst for Gartner's IT services group, said, "Over one-third of companies with over 1,000 employees obtain offshore BPO services from BPO providers headquartered in the US."