~Development of domestic BPO is the key for growth ~

Analyzing the challenges and opportunities ahead of the Indian Business Process Outsourcing (BPO) sector, the Confederation of Indian Industry and the Business Process Industry Association of India jointly organized a Business Process Industry Leaders Forum today. Elaborating on the global financial credit crisis Mr Samir Chopra, President, Business Process Industry Association of India and Founder and Promoter PKCL Group, said, "the present scenario in the backdrop of the global financial meltdown is credited to complex financial transactions and instruments."

Mr Praveen Sengar, Head - Software, Services and Industry Verticals Research, IDC (India) Limited delivered a presentation on the current market scenario and domestic Outsourcing market opportunity. He said, "Domestic BPO will be a bigger opportunity by 2012 growing at a CAGR of 43% (2007-2012) as compared to IT outsourcing, which has dominated the market till now. The domestic outsourcing market is driven by value arbitrage rather than cost arbitrage. Scale and footprint will be the key success factors for success in the domestic BPO market and new engagements and delivery models will emerge. IT and Business outsourcing will converge towards a single contract and players will be required to develop strong domain, consulting and transformation capability."

Holding the future of the BPO industry in the rural markets, Mr Kartik Raman from Source for Change says, "Currently we are celebrating a successful BPO story, at the same time we have to see the future as well. High skilled domains of outsourcing like KPOs and LPOs can be continued with the urban educated base, however we can spread our domains towards highly prosperous rural base. Training the rural resource, cost cutting and developing better facilities is an intelligent option available to the Indian BPOs. He highlighted a case study followed by Source for Changes on an all women rural BPO"

Taking the discussion further, Mr Chopra said, "we need not panic at present as the global financial bubble will settle down. We need to think on the prospects for beating recession; the onus for acting sensibly lies on our part as we are the world’s largest BPO hub."

Mr. Vikram Beniwal, Baring Private Equity Partners (India) Private Limited said, "the greatest challenge for the Indian BPO is to create a brand out of itself as at present it is a commoditized service addressing the B2B domain of the sector. This will help in developing opportunities for the sector."

Optimistic about the economy, Mr Manoj Malhotra, CEO, Salient Business Solutions said, "this is a funny phase in the global economy, irrespective of the meltdown we need to diversify our risks by looking for other options."

Highlighting the uncertainties Mr Leslie D'Monte, Associate Editor, Business Standard said, "the BPO sector has $150 billion addressable market and addressing the unclear aspects like branding, packaging, developing economies of scale, offshore backlashing and taxation are important. Posing as a tough challenge to the BPO sector ITES presents a good mix of services to their clients which include the BPO aspects as well. The BPO sector should understand that a collective approach towards business generation will help in their holistic development."

Elucidating a socially responsible approach towards the development of BPO sector in the rural areas, Mr Deepak Wadhawan, Senior Advisor, KPMG said, "the future of this industry lie in domestic BPO driven by people inclined towards social development."

Mr. K.V.Subramanian, Chief Financial Officer, Oracle Financial Services BPO said, "there is no need to panic as things will settle down, India offers huge talent pool and productive human recourses. I agree that we are in a midst of a crisis, but at the same time we need to brainstorm the opportunities this crisis brings along."

The discussion held that the domestic BPO business is going to be immense in the coming years. The rural areas presents a dynamic scope for development and the intelligent BPO companies will be amongst the pioneers in settling bases in the remotest corners of the country.

14^th October 2008
New Delhi