India's top 15 BPO firms

WNS is the top ranking third party ITES (Call Centre and BPO) company in India, says a survey conducted by the National Association of Software and Services Companies.

Wipro BPO Solutions and HCL Technologies BPO Services follow at the second and third position, respectively.

Nasscom released the list of the top 15 third party ITES (Call Center and BPO) companies in India on Wednesday, based on revenues for 2004-05 reported as per the annual Nasscom survey on IT industry performance.

The ITES-BPO segment contributes 30 per cent of the total IT-ITES exports from India and witnessed a growth of 44.5 per cent to reach $5.2 billion in 2004-05. The ITES-BPO exports are expected to clock revenues of $7.3 billion in 2005-06. 

Kiran Karnik, President, Nasscom, said in a media statement: "With an ever-expanding portfolio and employee base, the third party players have been able to sustain their growth rates over the years. Players who have scaled up and are offering process expertise, operational excellence and following best practices, are making it to the Nasscom rankings every year."

"The Nasscom rankings have become an industry benchmark and reinforce Nasscom's initiative of encouraging Indian IT industry to adopt the global best practices. These rankings are now used by customers globally," Karnik added.

It is important to note that the largest company GECIS was a captive operation till the end of 2004 and hence has not been considered for the rankings. If it had been a third party operation, it would have been the largest player by far.

A few companies did not provide India revenues as reported to STPI. If the offshore revenues of firms such as e-funds and Sutherland Technologies had been considered, they would have featured in the Top 10 companies.

A few key players have chosen not to reveal their revenues for reasons such as recent buyout or 'quiet period' -- these include vCustomer and Zenta Group.

Highlights of the Indian ITES-BPO sector:

• ITES-BPO employee base has grown at a CAGR of 52.6 per cent, from 42,000 in 2001-02 to 348,000 in FY 2004-05.
• As of March 2005, there were around 410 ITES-BPO players in India, up from 285 in FY 2003-04.
• Captive units continue to dominate the segment, accounting for over 65 per cent of the value of work off-shored to India.
• The domestic market for ITES-BPO also witnessed a significant increase in demand with the estimated value of work outsourced (by domestic clients) rising from $300 million in FY 2003-04 to $600 million in FY 2004-05.
• Key drivers of growth in domestic demand for ITES-BPO include the high degree of competition in the domestic telecom and BFSI verticals with companies laying increased emphasis on customer fulfilment and other CRM activities.
• Integration of IT-BPO contracts is becoming more common.
• The ITES-BPO companies are gaining significant traction in transaction processing, with more and more firms balancing voice and non-voice business portfolios to diversify revenue and raise seat utilization.
• While the leading global services firms scramble to ramp-up offshore operations in India, Indian vendors are developing multi-location delivery capabilities. Apart from India, firms are setting up facilities in China, Eastern Europe, Ireland, and Philippines. Within the country they are expanding to tier-II cities such as Mysore, Nasik, Vizag, Jaipur, Chandigarh and Trivandrum.
• The year gone by was a period of significant market activity for the ITES-BPO sector in India. Coupled with the growing stock of firms expanding their offshore initiatives in India, was the wave of consolidation as several large M&A deals were scripted in the industry like GECIS-Oak Hill/General Atlantic Partners, Daksh-IBM, e-serve-Citigroup, etc.

Emerging opportunity areas for the ITES-BPO sector:

• The previous year witnessed a significant pickup in global interest for HR ITES-BPO. Global potential for HR outsourcing in 2004 was estimated at $10.8 billion -- offshore-able potential estimated to be over $5 billion. Value of HR BPO offshored to India in FY 2004-05 was $165 million, up 120 per cent from $75 million in the previous year.
• A new breed of high-end knowledge based BPO called Knowledge Process Outsourcing emerged. This comprises of vendors providing higher-end research and analytic based services - in traditional service lines as well as new business areas.
• Areas with significant latent potential for KPO include healthcare -pharmaceuticals and biotechnology, legal support - intellectual property research, design and development for automotive and aerospace industries, and animation and graphics in the entertainment sector.
• F&A (Finance and Accounting) outsourcing is emerging as one of the fastest growing BPO segments. While earlier, the majority of F&A outsourcing deals were focused on transaction processing, now customers want BPO solutions providers to manage almost the entire business process.
• Procurement outsourcing is an emerging area as more and more firms are seriously investigating this option.