The business process outsourcing industry in India refers to the Services Outsourcing

Industry in India, catering mainly to Western operations of MNCs (Multinational

Corporations).

The sector witnessed considerable activity during 2004–05, including a ramping up of

operations by major multinational corporations players and Indian organizations stepped
up hiring. The domestic BPO market, catalyzed by demand from the telecommunications
and BFSI segments, matched the growth of BPO exports. The market experienced
maturity and consolidation, a result of numerous mergers and acquisitions taking place
within the sector. There were over 400 companies operating within the Indian BPO
space, including captive units (of both MNCs and Indian companies) and third-party
services providers. The key enabler for this has been cheaper bandwidth leading to low
telecom costs for leased lines and availability of educated English speaking workforce in
India.

The Indian BPO industry remains on a growth path, emerging as one of the key
investment markets in the country.

It is also referred to as Information Technology Enabled Services or ITES, and high end
work with specialisation is referred to as Knowledge Process Outsourcing or KPO. There
are other variants in use such as Legal Process Outsourcing (LPO).

NASSCOM is a chamber of commerce that represents this body and lobbies for it, as well
as creates a platform for members to take up common issues. NASSCOM services both
the Indian Software and the Indian BPO industry.

Note : As of 20 May 2008 all Indian on-shore workers in the UK and EU are now entitled
to the full wage and benefits packages enjoyed by their European counterparts [1] Uk
Government brings in equal pay for Agency Workers

Contents
[hide]

• 1 History
o 1.1 Airlines
o 1.2 Amex
o 1.3 General Electric
o 1.4 Third party BPO's
o 1.5 Entry of IT majors
• 2 Size of industry
• 3 From a PricewaterhouseCoopers survey
• 4 Leading BPO-ITes cities in India
o 4.1 Captive
• 5 Companies Outsourcing to India
• 6 References
 • 7 See also
• 8 Further reading

• 9 External links

[edit] History
[edit] Airlines

In the early 1980s several European airlines started using Delhi as a base for back office
operations, British Airways being one among them. The BA captive was finally spun off
as a separate organisation called WNS Global Services in 2002.

[edit] Amex

In the second half of the 1980s, American Express consolidated its JAPAC (Japan and
Asia Pacific) back office operations into New Delhi. This center was headed by Raman
Roy, and has been a source of several leading names in the Indian BPO Industry.

[edit] General Electric

In the 1990s Jack Welch was influenced by K.P. Singh, (A Delhi based realtor) to look at
Gurgaon in the NCR region as a base for back office operations. Pramod Bhasin, the
India head of G.E. hired Raman Roy and several of his management from American
Express to start this enterprise called GECIS (GE Capital International Services). Raman
for the first time tried out voice operations out of India, the India operations also was the
Beta site for GE Six sigma enterprise. The results made GE ramp up their Indian presence
and look at other locations. In 2004 GECIS was spun off as a separate legal entity by GE,
called Genpact. GE has retained a 40% stake and sold a 60% stake for $500 million to
two equity companies, Oak Hill Capital Partners and General Atlantic Partners.

[edit] Third party BPO's

Till G.E most of the work was being done by "captives"- a term used for in house work
being done for the parent organisation. In 2000 Raman Roy and some team members
from GECIS quit , and with VC funding from Chrysalis Capital started Spectramind. At
the same time an organisation called EXL started in Noida and Efunds started in Mumbai
and Gurgaon, and Daksh in Gurgaon. However, recently most of the Indian BPO's even
smaller and mid-sized ones are actually setting-up their onshore presence. Most of the
serious players are actually improving the outsourced business processes by leveraging
on years of experience and now some of them are directly competing with their own
older clientbase by marking this transition to KPO 's.

[edit] Entry of IT majors

In 2002 Spectramind was bought by software major Wipro, and BPO by then had become
mainstream like the IT Industry in India. The team that had setup Spectraming went on to
start Quatrro in 2006, a BPO specialising in high end BPO/KPO services. By 2002 all
major Indian software organizations were into BPO, including Infosys(Progeon),
Inforlinx, HCL, Satyam( Nipuna)and Patni. By 2003 Daksh was bought out by IBM, and
later in 2006 MphasiS was acquired by EDS. Even international 3rd party BPO players
like Convergys and Sitel had set up shop in India, swelling the BPO movement to India.
Then service arms of organizations like Accenture, IBM, Hewlett Packard, Dell too set
up captives in India.

[edit] Size of industry

The industry has been growing rapidly. It grew at a rate of 38% over 2005. For the FY06
financial year the projections is of US$7.2 billion worth of services provided by this
industry. The base in terms of headcount being roughly 400,000 people directly
employed in this Industry. The global BPO Industry is estimated to be worth 120-150
billion dollars, of this the offshore BPO is estimated to be some US$11.4 billion. India
thus has some 5-6% share of the total Industry, but a commanding 63% share of the
offshore component. The U.S $7.2 billion also represents some 20% of the IT and BPO
Industry which is in total expected to have revenues worth US$36 billion for 2006. The
headcount at 400,000 is some 40% of the approximate one million workers estimated to
be directly employes in the IT and BPO Sector.

The related Industry dependent on this are Catering, BPO training and recruitment,
transport vendors, (home pick up and drops for night shifts being the norm in the
industry). Security agencies, Facilities management companies.

[edit] From a PricewaterhouseCoopers survey

An Indian call center

Table 1: Global BPO Market by Industry[1]

Industry Percentage (%)

Information Technology 43

Financial Services 17

Communication (Telecom) 16

Consumer Goods/ Services 15

Manufacturing 9

Table 2: Global BPO Market by Geography[1]

Country Percentage (%)

United States 59

Europe 27

Asia-Pacific (incl. Japan) 9

Rest of the World 5

Table 3: Size of Global Outsourcing Market[1]

 Year Size (USD Bn)

2000 119

2005 234

2008 (est.) 310

Table 4: Size and Growth of BPO in India[1]

Year Size (US$ Bn) Growth Rate (%)

2003 2.8 59

2004 3.9 45.3

2005 5.7 44.4

Currently the Indian BPO Industry employs in excess of 245,100 people and another
94,500 jobs are expected to be added during the current financial year (2005-2006)

Table 5: Call Center Employee cost[1]

Country Cost (USD/yr)

USA 19,000

Australia 17,000
Philippines 9,050

India 7,500

Nearly 75% of US and European multinational companies now use outsourcing or shared
services to support their financial functions. 72% of European multinational companies
have outsourced financial functions over the past two years.

Additionally, 71% of European companies and 78% US companies plan to use these
services in the next 12-24 months. Overall, 29% of US and European companies expect
to increase their use of outsourcing of financial functions, with spending expected to be
nearly 16% higher than current levels.

Growth in this sector will get a further impetus as Indian BPO companies have robust
security practices and emphasis is laid in developing trust with clients on this score.
While earlier there were varying quality standards on this aspect, today there is focus on
standardization of security, such as data and IP security.

[edit] Leading BPO-ITes cities in India

Bengaluru, Chennai, Hyderabad, NCR (New Delhi, Delhi, Gurgaon, Faridabad, NOIDA,
Greater Noida, Ghaziabad), Pune, Mumbai and Kolkata are Tier I cities that are leading
IT cities in India.

With rising infrastructure costs in these cities, many BPO's are shifting operations to Tier
II cities like Mangalore, Mysore, Hubli-Dharwad, Belgaum, Coimbatore, Madurai,
Hosur, Nagpur, Kochi, Trivandrum, Chandigarh, Mohali, Panchkula, Ahmedabad,
Bhubaneshwar, Jaipur, and Vishakapatnam.

Tier II cities offer lower business process overhead compared to Tier I cities, but may
have a less reliable infrastructure system which may hamper dedicated operations. The
Government of India in partnership with private infrastructure corporations is working on
bringing all around development and providing robust infrastructure all over the nation.

Source : dqindia.ciol.com/dqtop20/2007/sas&bpo07/

[edit] Captive

• Motorola
• Nokia
• Option One
• Prudential
 • Principal Financial Group
• Reuters
• Siemens
• Standard Chartered Bank
• Tesco
• UBS AG
• United Health
• Yahoo
• aMarketForce

Bootstrap Technologies Pvt Ltd.,

[edit] Companies Outsourcing to India

This is a list of companies sending work to 3rd parties in India, or having partners to run
their centers.[citation needed]

• Aetna
• Alcoa
• Aviva
• Barclays
• BBC (in planning stages)
• Blue Cross and Blue Shield Association
• BT Group
• Capital One
• Cisco
• Delta Air Lines
• Experian
• Helion-prime
• Hewitt Associates
• HSBC (HSBC Data Processing India Pvt, Ltd)
• Mercer
• Norwich Union
• Verizon

[edit] References
1. ^ a b c d e "The Evolution of BPO in India" (PDF). PriceWaterHouseCoopers (April 2005).

uhc (united health care)

[edit] See also

• Globalization
• Software Technology Parks of India
 • Nalini by Day, Nancy by Night — 2005 documentary on outsourcing in India
• Business process outsourcing in the Philippines
• Call center security
• Tidel Park
• HITEC City
• InfoPark, Kochi
• Technopark Kerala
• Silicon Valley of India
• Azim Premji — Father of the Indian Outsourcing phenomenon
• Jack Welch — Pioneer of Outsourcing to India
• Medical Transcription

[edit] Further reading

• Friedman, Thomas L. (2005). The World is Flat: A Brief History of the Twenty-
First Century. ISBN 0-374-29288-4.
• Kobayashi-Hillary, Mark. Building a Future with BRICs: The Next Decade for
Offshoring. ISBN 978-3-540-46453-2.
• Kobayashi-Hillary, Mark. Outsourcing to India: The Offshore Advantage. ISBN
3-540-20855-0.
• Kobayashi-Hillary, Mark. Global Services: Moving to a Level Playing Field.
ISBN 978-1-902505-83-1.
• Sengupta, Arunabha. Labyrinth - A Novel about the Software Industry. ISBN 0-
595-39697-6.
• Sengupta, Arunabha. Big Apple 2 Bites. ISBN 8-188-81198-X.

• Davies, Paul. What's This India Business?: Offshoring, Outsourcing, and the
Global Services Revolution. ISBN 1-904838-00-6.
• Aalders, Rob. The IT Outsourcing Guide. ISBN 0-471499-35-8.
• Das, Gurcharan. India Unbound: The Social and Economic Revolution from
Independence to the Global Information Age. ISBN 0-385720-74-2.
• Brown, Douglas. The Black Book of Outsourcing: How to Manage the Changes,
Challenges, and Opportunities. ISBN 0-471718-89-0.

[edit] External links

• NASSCOM (National Association of Software & Service Companies)
• Ministry of Communications & Information Technology, Department of
Information Technology, India

Articles

• "Middletons looks forward to an Indian free trade deal", by Chris Merrit, Legal
affairs editor, The Australian, May 23, 2008
 • "India being Bangalored by China", by Venkatesan Vembu, Daily News &
Analysis, 27 May 2007
• The Rise Of India, Business Week Online
• Inside Outsourcing in India, CIO.com
• India's New Faces of Outsourcing, The Washington Post
• Outsourcing: Silicon Valley East, MSNBC
• Where the Good Jobs Are Going, Jyoti Thottam, Time.com
• Out Of India, CBS News
• Some U.S. hospitals outsourcing work: Shortage of radiologists spurs growing
telemedicine trend, Associated Press
• U.S. homework outsourced as "e-tutoring" grows, by Jason Szep, Reuters
• BBC Will Outsource Accounting to India, Associated Press
• Strategic application of Offshoring in a CPA Practice , by Dev Purkayastha
• Radiology Outsourcing In India: IMC Breaks New Ground,
medicalnewstoday.com

Videos

• The Other Side of Outsourcing, Discovery Times Channel

• Exporting IT: Austin to India, News 8 Austin
• Will India's outsourcing boom ever bust?: Infosys Chairman N.R. Narayana
Murthy talks outsourcing, News.com
• India 101 on eweek Video Seminars hosted by Stan Gibson
• 30 Days - Outsourcing In India
• The Rise of India, ABC News

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