Indian BPOs to reach $30 bn by 2012

The $11-billion Indian BPO industry will reach $30 billion by 2012 but can even grow  five folds in the next five years to $50 billion mark if the 'right choices' were made by the industry stakeholders.

"While $30 billion is the achievable target, 50 billion is the aspirational target", Nasscom President Som Mittal said on Tuesday while releasing the findings of a study on India's BPO industry conducted jointly with the Everest Group, a global strategy consulting group. 

Over 30 per cent of the opportunity will be in hitherto under-penetrated industries such as telecom, retail, media and enegy. Traditional sectors like banking, financial services and manufacturing will offer huge opportunities as well, the study titled Nasscom-Everest India BPO Study-Roadmap 2012-Capitalizing on the Expanding BPO landscape.

While back-office processes were expected to continue being a large part of the service portfolio, middle-office and front office services account for approximately 50 per cent of the future opportunity, it added.

Currently India is at the forefront of the global business process offshoring industry. The BPO industry employs over 700,000 people across 25 countries and accounts for nearly 40 per cent of the global offshore market.

India has emerged as the destination of choice for offshore delivery of business process.

The Indian BPO, which has shown a 35 per cent annual growth over the past five years, has eloved not only in size but also in terms of maturity--service lines, service delivery capability and footprint, Mittal added.

Speaking on the opportunities that will emerge, Gaurav Gupta, country head, Everest Group said, while North America
will continue to be the largest BPO market opportunity for India, there were significant untapped opportunities in
geographies like UK, Continental Europe and Asia Pacific

Industry specific services will constitute a large sahre of the marekt opportunity (60 to 65 per cent) compared to
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BPO services. "Those with domain knowledge, skill sets will be in demand in future", he said adding the five
fold growth will employ two million people directly.

The factors that favoured the five-fold growth was the country's technology, tools, highly skilled professionals, and
domain expertise, said Mittal.

However, the hindering blocks to this growth were lack of infrastructure, employable manpower and an educational system that was not in keeping with the demands of the international market needs, said Raman Roy, Chairman and MD Quatrro.

The aspired target could be achieved only if the industry, government and various stakeholders collaborate to manage several internal and external constraints, he said.

On the talent side, there was a need to evolve education system to relieve significant pressure on entry level talent pool, middle management personnel and people with specialised skills ets.

On infrastructure side, "There was a need to develop physical and social infrastructure, particularly in tier two and three cities. There was a need to create BPO hubs in these cities to ease pressure on metroes", said Roy.

The eight-point action theme espoused by the study includes protecting India's cost advantage to ensure that buyer interest, adoption and growth are sustained.