BPO: Hi-tech China a threat to India

India, the uncrowned king of the business process outsourcing world, may be in for some rough ride with national and international studies pointing at competition from a range of countries including China, the Philippines, South Africa, Mauritius, Malaysia, Australia, Ireland and New Zealand.

Assocham's second BPO Industry Confidence Survey identifies China as India's greatest challenge with 54.45 per cent of the respondents opining the sleeping giant would eat into India's share with its superior technological skills.

Outsourcing and India: Complete Coverage

The latest Gartner Inc research predicts a 25 per cent slide in Indian offshore business process outsourcing by 2007, a significant drop from the country's present majestic market share of 80 per cent.

But is the $3.8 billion Indian BPO industry geared up to face the challenge?

"I don't think these countries will surge ahead in the next two-three years. But we are aware of the challenge and should take steps to stay ahead of the pack," says Kiran

Karnik, president, National Association of Software and Service Companies.

"Unless we diversify into other areas and improve quality of work and service line, the going may get a little tough," says Mahendra K Sanghi, president, Association of Indian Chambers of Commerce.

The industry, adopting a guarded approach, is taking measures to overcome the hurdles. Sanghi stresses the need to take concrete steps towards high-end services, like equity research, HR related or other health-care and consulting services.

While China is not likely to challenge India in its present stronghold of voice services for another 25 years, other English speaking countries like South Africa and Ireland could, says Sanghi.

If service provided by Australia and New Zealand is going to be expensive, China and Mexico have the advantage of low-cost economy, he adds. -- PTI

Photograph: Frederic J Brown/AFP/Getty Images

Also see: Rolls-Royce completes 100 years!