For the Indian BPO players, it's time now to find new growth areas and inch up the value chain so as to sustain their pre-eminent position in global outsourcing.
The
business process outsourcing, popularly known as BPO
services industry, has firmly put India on the global
ITES services map. In fact, this is one area where the
`India Brand' is more visible and established worldwide
than any other sector(s), next only to the success of
the offshore IT services industry on similar lines.
The success of BPO sector could be attributed to the
first-mover advantage India got in the IT services sector
and its continued dominance as a major destination for
such services for over a decade now, helping build strong,
long-term customer relationships and develop domain
expertise. However, going ahead, maintaining and sustaining
its lead as well as an extraordinary growth witnessed
thus far would not be easy for the Indian BPO players
as new challenges, in the form of increased competition
from MNCs, and backlash from developed markets like
US and Europe, emerge.
The
Indian BPO service providers are already feeling the
pressure to grow in the wake of a slow US economic growth,
which is having an impact on corporate IT spending of
US companies. As a result, pressure on margins has increased
and in many cases BPO service providers have to agree
to terms, which are more favorable to customers than
to the service providers. If this trend continues, it
could put several smaller firms in deep trouble. Another
challenge for Indian companies is to differentiate their
service offerings and value proposition. With commoditization,
consolidation is almost inevitable. To survive and grow,
Indian companies would have to identify the next step
in the value chain and work towards building and demonstrating
value differentiators. |
