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The India BPO Industry Report 2013

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Darwin Jayson Mariano
Darwin Jayson Mariano

The document discusses India's business process outsourcing (BPO) industry. It notes that while other countries like China, Philippines, and Malaysia are gaining in the BPO industry, India remains the top outsourcing destination globally according to a recent report. This is due to factors like availability of English-speaking talent, lower costs, strong infrastructure, and high quality of services in India. Several Indian cities like Bangalore, Mumbai, and Delhi feature highly in the rankings of top outsourcing destinations worldwide. The document concludes that India is well-positioned to retain its leading position in the global outsourcing industry.

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STANDING STRONG The India BPO Industry Report 2013 www.ssoindia.com
India is once again in the news - but not for something the Indians would find very flattering. Recent reports about the Indian Rupee’s rapid fall, dangerously exposing it to wild market swings, is hogging the headlines of all major dailies worldwide. It’s no surprise that policymakers are now scrambling for solutions to avert a much bigger economic disaster easily get out of hand. If there’s one silver lining out of all of this, it’s that the Indian BPO market is still standing strong and ironic as it is, the weak Rupee makes the country a more cost-competitive destination for global outsourcing firms. In a recent report by Live Mint & The Wall Street Journal, quoting findings from Cushman & Wakefield, it was revealed that India remains an attractive destination for IT and BPO companies, ahead of China and Philippines. “ The availability of qualified and affordable manpower coupled with positive business environment continues to be India’s main source of strength. ” “The Philippines, China, Malaysia, Indonesia and Vietnam are consolidating their positions in different domains of the outsourcing business even as India remains a prime destination for software development and BPO operations thanks to its pool of English-speaking talent, good network infrastructure, cost arbitrage and high quality of services,” the report noted. On India’s emerging destinations, it said that “apart from established IT destinations Bangalore, Chennai, Hyderabad, Pune, Gurgaon, Kolkata and Mumbai, tier-II and tier-III cities such as Bhubaneswar, Chandigarh, Jaipur and Kochi are emerging as new destinations for IT businesses.” www.ssoindia.com
Other countries vying for the top spot In the global BPO space, India is on top. But, how long might this last? Serious competition posed by other emerging countries in the region can’t simply be ignored. In fact, a recent Nasscom report indicated that India has lost about 10 percent market share to the rest of the world in the last five years, while countries like China, Malaysia and Philippines are slowly gaining momentum. Malaysia The Malaysian SSO Industry houses nearly 250 centres and has been identified under the ongoing Economic Transformation Program as a key driver for growth. Shared services is today recognized as a competitive strategy leveraging Information & Communication Technology (ICT), Finance & Accounting, Human Resources and Engineering Design & Services to improve organizations. The main 5 industry sectors supported by shared services in Malaysia are: 1. 2. 3. 4. 5. Banking, Financial Services & Insurance (BFSI) Information & Communication Technology (ICT) Pharmaceutical & Health (P&H) Logistics & Transportation (L&T) Energy, Chemical & Resources (ECR) China China has a large, skilled population of workers who have mastered or grew up hearing and speaking Japanese and Korean. BPO’s are growing and moving into Dalian, in the north-east which has been traditionally either a part of the Korean, or the Japanese empires for over half of the last 500 years. Look for Dalian and other eastern cities to take on more R&D, ITO and high-end BPO work for Korea, Japan and the rest of the developed world over the next five years. Philippines Latest available information revealed that the Philippine IT-BPO industry has 30-per cent share of the US market and 15-20 per cent of Asia Pacific; the BPO sector accounted for 630,000 workers and $11 billion in revenues in 2011 according to a report from Stratbase Research Institute (SRI). In recent years, the Philippines has earned a reputation as one of the most preferred Outsourcing destinations in the world. In a latest study of Philippine IT-BPO Road Map 2011-2016 commissioned by the Business Processing Association of the Philippines (BPAP), the country’s largest business process outsourcing group, plans were laid out for the industry to achieve US$25 billion in annual revenue by 2016 and to directly employ 1.3 million workers. www.ssoindia.com
IndiA, still AN ATTRACTIVE outsourcing destination The availability of qualified and affordable manpower coupled with a positive business environment continues to be India’s main source of strength. In fact, the same study by Cushman & Wakefield maintained that India outperforms its counterparts, Philippines, China, Malaysia and other South Asian countries in IT-BPO industry due to availability of English speaking and qualified talent, higher cost arbitrage, rapidly growing domestic market, stable political system, positive business environment that fosters FDI in the sector among others. Latest figures released by Nasscom complements these findings. Indian IT-BPO Industry performance Revenues from Fixed Price Contracts: 45.8 45.7% 45.4 45.0 44.6% 44.8 44.4 44.0 43.7% 43.8 43.7% 43.4% 43.4 43.0 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 www.ssoindia.com
Net Client Additions: 3900 118 Number of active clients Net client addition 120 3813 3800 3700 80 56 3628 3587 3600 100 3653 41 3500 3695 60 42 40 25 3400 20 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Source: Nasscom Quarterly Industry Review – February 2013. Note: Analysis of Indian IT-BPO industry performance during the quarter. The analysis is based on the results declared by the top 151 India-centric IT-BPO companies which comprise about 40-45% of the industry. To see full report, click HERE New Delivery Centers established/announced • • US-based Fulcrum Worldwide is setting up a new software delivery and operations centre at Hinjewadi, Pune with a capacity of 2,000 people Maveric Systems has opened a delivery centre in Mumbai, and plans to recruit close to 150 people Source: Nasscom Quarterly Industry Review – February 2013 www.ssoindia.com
“ India remains a prime destination for software development and BPO operations, thanks to its pool of English-speaking talent, good network infrastructure, cost arbitrage and high quality of services. ” What is Business Transformation (and why it matters?) Over the past decades, some of the more sophisticated organizations have recognized that internal collaboration and knowledge sharing is what gives them a competitive advantage. More recently, brand-new market entrants [think of Google, Facebook, and even Amazon, back in the day] kicked off their growth-oriented businesses by basing them on the technologies and frameworks that just didn’t exist 15, or even 10, years ago. These frameworks release employees from their desks, open up dialogues between different levels of management, and provide transparency across teams and even geographies. An engineer in Delhi can discuss project fixes with an applications specialist in Krakow, and both can share their conclusions with the implementation team in Houston – all within a day’s work. Video-conferencing is now the norm – and gone are the days of satellites beaming grainy pictures that looked as if they came from the moon. Today, modern shared services centres have state-of-the-art conferencing facilities that would not look out of place at NASA. And organizations like the Commonwealth Bank are transitioning their workforce cultures to ones that are modern, flexible, and “activity-based,” to accommodate flexible working practices and effectiveness. Essentially: organizations are not just getting smarter, they are being built smarter. Consider the modern, mobile office [and death of the cubicle]. After the workforce retrenching of the last five years, careful growth, where it exists, is being nurtured within open plan offices, and hub-based meeting areas. A recent article in the Wall Street Journal highlighted that new offices are being designed with smaller meeting rooms, in recognition of the fact that most of today’s meetings consist of 2 to 4 people brainstorming – and not 20 people sitting around a formal boardroom table. Conversely, the space thus saved is turned into open meeting areas, with sofas, ping-pong tables and full networking capabilities. The idea is to bring a team together and let them evolve ideas in a completely new, free-thinking environment. There is even a parallel move to stopping the slow but steady trickle of home-workers out of the office, in recognition of the value that interactive teamwork provides to innovative thinking. Yahoo’s CEO, Marissa Mayer, earlier this year, had to endure a media backlash in reaction to a leaked memo suggesting she’d prefer workers to be onsite – but the trend seems to be in her favour. In a recent report on social-media-enabled transformation, Cognizant’s researchers note that we are nearing the end of the “Internet-enabled” IT wave and are on the cusp of making the leap to the SMAC (Social Media, Analytics & Cloud) wave. This follows what Cognizant terms the 4 waves of corporate IT: mainframe (1960-1976), minicomputer (1976-1992), distributed PC (1992-2001), and Internet (2002-2012). “As with other “curve jumps,” this shift will generate significant dislocation and wealth creation on the supply (or vendor) side of the industry — across hardware, software and services sectors — and drive new levels of productivity on the demand (or user) side of the industry.” (Source: SMAC: the new enterprise IT model, Cognizant) www.ssoindia.com
World’sNo.1 Outsourcing Destination The 2013 Top 100 Outsourcing Destinations by Tholons tracks the rankings of outsourcing destinations all over the world – and India (again) claimed the top spot. 13 out of 100 destinations listed in the report were also from India. RANK 2013 CITY COUNTRY 1 Bangalore India 2 Mumbai India 4 Delhi (NCR) India 5 Chennai India 6 Hyderabad India 7 Pune India 25 Chandigarh India 26 Kolkata India 29 Coimbatore India 39 Jaipur India 54 Bhubaneswar India 66 Thiruvananthapuram India 69 Ahmedabad India India Dominates India is widely expected to retain its leading position in the global sourcing community based on some core advantages: • Optimal cost efficiency: a focus on process and productivity improvement, leveraging tier two and tier three cities, and nonlinear growth through platform and cloud products will continue to propel low-cost solutions • Unparalleled human capital: while China offers significant numbers as well, India is widely recognized as offering a skilled and educated workforce that aligns well with multinational corporations’ business expectations. India presents the largest sources of employable talent in the world. • Customer centricity: the growth in collaborative, advisory relationships and the focus on partnerships for innovation supports an increasingly tailored approach, compared to traditional standardized solutions • Infrastructure: in recognition of the importance of the IT–BPO industry to India’s economy, the government is investing significant funds in the development of infrastructure • New technology: the rate of growth of new technology is faster than ever, and with the introduction of mobile solutions over the past two years, we can expect Indian providers to assimilate tablet and smart phone service delivery into their offerings. The future of IT-BPO services delivery will undoubtedly combine services, solutions, and platforms to provide clients with flexible, scalable, real-time support services. The Indian IT industry is strong and flexing its muscle to maintain its leading position. Much of tomorrow’s success will depend upon domain solutions and technology platforms – and not on talented, low-cost employees. Along with other significant growth locations like Latin America, Eastern Europe, and increasingly the Middle East and Africa, India will remain a significant factor in any long-term, smart sourcing model. Disclaimer: Please note that we do all we can to ensure accuracy and timeliness of the information presented herein but errors may still understandably occur in some cases. If you believe that a serious inaccuracy has been made please let us know. This article is provided for information purposes only. IQPC accepts no responsibility whatsoever for any direct or indirect losses arising from the use of this report or its contents. Sources: http://www.bpmwatch.com/research/why-people-join-bpos/; http://www.bpmzwatch.com/research/why-people-quit-bpo-jobs/; http://www.ssonetwork.com/business-process-outsourcing/ articles/will-india-lose-pole-position-in-bpo-space/; http://www.bpmwatch.com/research/challenges-faced-by-hr-professionals-in-bpo-industry/; http://survey.nasscom.in/sites/default/ files/researchreports/softcopy/IT-BPM%20Industry%20Insights-Feb-2013.pdf; http://www.bpmwatch.com/research/bpo-industry-in-india-a-report/; http://www.livemint.com/Industry/ JlLr0Q8S7TNZaG2CK8DmuO/India-an-attractive-destination-for-IT-and-BPO-companies.html; http://www.thestatesman.net/news/11611-india-forerunner-in-it-bpo-industry.html; http://zeenews. india.com/business/news/technology/india-forerunner-in-global-it-bpo-sector-cushman-and-wakefield_82470.html www.ssoindia.com
3-4 DECEMBER 2013 | GURGAON, INDIA To attend the conference, email enquiry@iqpc.com.sg or call +65 6722 9388. To learn more, visit www.ssoindia.com www.ssoindia.com

More Related Content

The India BPO Industry Report 2013

  • 1. STANDING STRONG The India BPO Industry Report 2013 www.ssoindia.com
  • 2. India is once again in the news - but not for something the Indians would find very flattering. Recent reports about the Indian Rupee’s rapid fall, dangerously exposing it to wild market swings, is hogging the headlines of all major dailies worldwide. It’s no surprise that policymakers are now scrambling for solutions to avert a much bigger economic disaster easily get out of hand. If there’s one silver lining out of all of this, it’s that the Indian BPO market is still standing strong and ironic as it is, the weak Rupee makes the country a more cost-competitive destination for global outsourcing firms. In a recent report by Live Mint & The Wall Street Journal, quoting findings from Cushman & Wakefield, it was revealed that India remains an attractive destination for IT and BPO companies, ahead of China and Philippines. “ The availability of qualified and affordable manpower coupled with positive business environment continues to be India’s main source of strength. ” “The Philippines, China, Malaysia, Indonesia and Vietnam are consolidating their positions in different domains of the outsourcing business even as India remains a prime destination for software development and BPO operations thanks to its pool of English-speaking talent, good network infrastructure, cost arbitrage and high quality of services,” the report noted. On India’s emerging destinations, it said that “apart from established IT destinations Bangalore, Chennai, Hyderabad, Pune, Gurgaon, Kolkata and Mumbai, tier-II and tier-III cities such as Bhubaneswar, Chandigarh, Jaipur and Kochi are emerging as new destinations for IT businesses.” www.ssoindia.com
  • 3. Other countries vying for the top spot In the global BPO space, India is on top. But, how long might this last? Serious competition posed by other emerging countries in the region can’t simply be ignored. In fact, a recent Nasscom report indicated that India has lost about 10 percent market share to the rest of the world in the last five years, while countries like China, Malaysia and Philippines are slowly gaining momentum. Malaysia The Malaysian SSO Industry houses nearly 250 centres and has been identified under the ongoing Economic Transformation Program as a key driver for growth. Shared services is today recognized as a competitive strategy leveraging Information & Communication Technology (ICT), Finance & Accounting, Human Resources and Engineering Design & Services to improve organizations. The main 5 industry sectors supported by shared services in Malaysia are: 1. 2. 3. 4. 5. Banking, Financial Services & Insurance (BFSI) Information & Communication Technology (ICT) Pharmaceutical & Health (P&H) Logistics & Transportation (L&T) Energy, Chemical & Resources (ECR) China China has a large, skilled population of workers who have mastered or grew up hearing and speaking Japanese and Korean. BPO’s are growing and moving into Dalian, in the north-east which has been traditionally either a part of the Korean, or the Japanese empires for over half of the last 500 years. Look for Dalian and other eastern cities to take on more R&D, ITO and high-end BPO work for Korea, Japan and the rest of the developed world over the next five years. Philippines Latest available information revealed that the Philippine IT-BPO industry has 30-per cent share of the US market and 15-20 per cent of Asia Pacific; the BPO sector accounted for 630,000 workers and $11 billion in revenues in 2011 according to a report from Stratbase Research Institute (SRI). In recent years, the Philippines has earned a reputation as one of the most preferred Outsourcing destinations in the world. In a latest study of Philippine IT-BPO Road Map 2011-2016 commissioned by the Business Processing Association of the Philippines (BPAP), the country’s largest business process outsourcing group, plans were laid out for the industry to achieve US$25 billion in annual revenue by 2016 and to directly employ 1.3 million workers. www.ssoindia.com
  • 4. IndiA, still AN ATTRACTIVE outsourcing destination The availability of qualified and affordable manpower coupled with a positive business environment continues to be India’s main source of strength. In fact, the same study by Cushman & Wakefield maintained that India outperforms its counterparts, Philippines, China, Malaysia and other South Asian countries in IT-BPO industry due to availability of English speaking and qualified talent, higher cost arbitrage, rapidly growing domestic market, stable political system, positive business environment that fosters FDI in the sector among others. Latest figures released by Nasscom complements these findings. Indian IT-BPO Industry performance Revenues from Fixed Price Contracts: 45.8 45.7% 45.4 45.0 44.6% 44.8 44.4 44.0 43.7% 43.8 43.7% 43.4% 43.4 43.0 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 www.ssoindia.com
  • 5. Net Client Additions: 3900 118 Number of active clients Net client addition 120 3813 3800 3700 80 56 3628 3587 3600 100 3653 41 3500 3695 60 42 40 25 3400 20 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Source: Nasscom Quarterly Industry Review – February 2013. Note: Analysis of Indian IT-BPO industry performance during the quarter. The analysis is based on the results declared by the top 151 India-centric IT-BPO companies which comprise about 40-45% of the industry. To see full report, click HERE New Delivery Centers established/announced • • US-based Fulcrum Worldwide is setting up a new software delivery and operations centre at Hinjewadi, Pune with a capacity of 2,000 people Maveric Systems has opened a delivery centre in Mumbai, and plans to recruit close to 150 people Source: Nasscom Quarterly Industry Review – February 2013 www.ssoindia.com
  • 6. “ India remains a prime destination for software development and BPO operations, thanks to its pool of English-speaking talent, good network infrastructure, cost arbitrage and high quality of services. ” What is Business Transformation (and why it matters?) Over the past decades, some of the more sophisticated organizations have recognized that internal collaboration and knowledge sharing is what gives them a competitive advantage. More recently, brand-new market entrants [think of Google, Facebook, and even Amazon, back in the day] kicked off their growth-oriented businesses by basing them on the technologies and frameworks that just didn’t exist 15, or even 10, years ago. These frameworks release employees from their desks, open up dialogues between different levels of management, and provide transparency across teams and even geographies. An engineer in Delhi can discuss project fixes with an applications specialist in Krakow, and both can share their conclusions with the implementation team in Houston – all within a day’s work. Video-conferencing is now the norm – and gone are the days of satellites beaming grainy pictures that looked as if they came from the moon. Today, modern shared services centres have state-of-the-art conferencing facilities that would not look out of place at NASA. And organizations like the Commonwealth Bank are transitioning their workforce cultures to ones that are modern, flexible, and “activity-based,” to accommodate flexible working practices and effectiveness. Essentially: organizations are not just getting smarter, they are being built smarter. Consider the modern, mobile office [and death of the cubicle]. After the workforce retrenching of the last five years, careful growth, where it exists, is being nurtured within open plan offices, and hub-based meeting areas. A recent article in the Wall Street Journal highlighted that new offices are being designed with smaller meeting rooms, in recognition of the fact that most of today’s meetings consist of 2 to 4 people brainstorming – and not 20 people sitting around a formal boardroom table. Conversely, the space thus saved is turned into open meeting areas, with sofas, ping-pong tables and full networking capabilities. The idea is to bring a team together and let them evolve ideas in a completely new, free-thinking environment. There is even a parallel move to stopping the slow but steady trickle of home-workers out of the office, in recognition of the value that interactive teamwork provides to innovative thinking. Yahoo’s CEO, Marissa Mayer, earlier this year, had to endure a media backlash in reaction to a leaked memo suggesting she’d prefer workers to be onsite – but the trend seems to be in her favour. In a recent report on social-media-enabled transformation, Cognizant’s researchers note that we are nearing the end of the “Internet-enabled” IT wave and are on the cusp of making the leap to the SMAC (Social Media, Analytics & Cloud) wave. This follows what Cognizant terms the 4 waves of corporate IT: mainframe (1960-1976), minicomputer (1976-1992), distributed PC (1992-2001), and Internet (2002-2012). “As with other “curve jumps,” this shift will generate significant dislocation and wealth creation on the supply (or vendor) side of the industry — across hardware, software and services sectors — and drive new levels of productivity on the demand (or user) side of the industry.” (Source: SMAC: the new enterprise IT model, Cognizant) www.ssoindia.com
  • 7. World’sNo.1 Outsourcing Destination The 2013 Top 100 Outsourcing Destinations by Tholons tracks the rankings of outsourcing destinations all over the world – and India (again) claimed the top spot. 13 out of 100 destinations listed in the report were also from India. RANK 2013 CITY COUNTRY 1 Bangalore India 2 Mumbai India 4 Delhi (NCR) India 5 Chennai India 6 Hyderabad India 7 Pune India 25 Chandigarh India 26 Kolkata India 29 Coimbatore India 39 Jaipur India 54 Bhubaneswar India 66 Thiruvananthapuram India 69 Ahmedabad India India Dominates India is widely expected to retain its leading position in the global sourcing community based on some core advantages: • Optimal cost efficiency: a focus on process and productivity improvement, leveraging tier two and tier three cities, and nonlinear growth through platform and cloud products will continue to propel low-cost solutions • Unparalleled human capital: while China offers significant numbers as well, India is widely recognized as offering a skilled and educated workforce that aligns well with multinational corporations’ business expectations. India presents the largest sources of employable talent in the world. • Customer centricity: the growth in collaborative, advisory relationships and the focus on partnerships for innovation supports an increasingly tailored approach, compared to traditional standardized solutions • Infrastructure: in recognition of the importance of the IT–BPO industry to India’s economy, the government is investing significant funds in the development of infrastructure • New technology: the rate of growth of new technology is faster than ever, and with the introduction of mobile solutions over the past two years, we can expect Indian providers to assimilate tablet and smart phone service delivery into their offerings. The future of IT-BPO services delivery will undoubtedly combine services, solutions, and platforms to provide clients with flexible, scalable, real-time support services. The Indian IT industry is strong and flexing its muscle to maintain its leading position. Much of tomorrow’s success will depend upon domain solutions and technology platforms – and not on talented, low-cost employees. Along with other significant growth locations like Latin America, Eastern Europe, and increasingly the Middle East and Africa, India will remain a significant factor in any long-term, smart sourcing model. Disclaimer: Please note that we do all we can to ensure accuracy and timeliness of the information presented herein but errors may still understandably occur in some cases. If you believe that a serious inaccuracy has been made please let us know. This article is provided for information purposes only. IQPC accepts no responsibility whatsoever for any direct or indirect losses arising from the use of this report or its contents. Sources: http://www.bpmwatch.com/research/why-people-join-bpos/; http://www.bpmzwatch.com/research/why-people-quit-bpo-jobs/; http://www.ssonetwork.com/business-process-outsourcing/ articles/will-india-lose-pole-position-in-bpo-space/; http://www.bpmwatch.com/research/challenges-faced-by-hr-professionals-in-bpo-industry/; http://survey.nasscom.in/sites/default/ files/researchreports/softcopy/IT-BPM%20Industry%20Insights-Feb-2013.pdf; http://www.bpmwatch.com/research/bpo-industry-in-india-a-report/; http://www.livemint.com/Industry/ JlLr0Q8S7TNZaG2CK8DmuO/India-an-attractive-destination-for-IT-and-BPO-companies.html; http://www.thestatesman.net/news/11611-india-forerunner-in-it-bpo-industry.html; http://zeenews. india.com/business/news/technology/india-forerunner-in-global-it-bpo-sector-cushman-and-wakefield_82470.html www.ssoindia.com
  • 8. 3-4 DECEMBER 2013 | GURGAON, INDIA To attend the conference, email enquiry@iqpc.com.sg or call +65 6722 9388. To learn more, visit www.ssoindia.com www.ssoindia.com