Why are Indian BPOs faring better than their big IT brothers?

It is not all gloomy give a positive and rosy picture about the growth potential of this sector. However, this is contrary to the case of IT divisions of these companies. They have reported a decline in revenue growth and delays in cash realization.It is quite intriguing to see how BPO concerns are faring better compared to their big brothers, the traditional IT arms of these Indian giants.

Top BPOs in India

Top BPOs in India

CNBC recently discussed this issue and observed that Indian BPO firms were able to make some adjustments in their operating model to effect this positive outlook. They have taken some bold steps around shifting their conventional operating model around offshore centres. On an interesting note, Infosys BPO has more onsite and onshore centres compared to offshore units. They have twelve onsite/onshore as compared to six offshore units in India. Revenue charts justify why this decision to go for more on shore units has truly turned around things for BPO’s. Infosys BPO reported that now 30% of their revenue is coming from units outside India.

The advantage of a global delivery model is that clients are now willing to trust BPO partners for their high value transformation projects. Earlier since the support was carried out mostly from remote offshore locations, clients were willing only to give transactional projects which purely focused on cost savings and operational efficiency. Global economic instability and market fluctuations are pushing enterprises to focus more on customer centric business initiatives and collaborative business models. They are more of strategic and transformational nature. This is where Indian BPO’s have successfully positioned them to serve these strategic needs of enterprises. Now they offer competent Onsite consultants who have local market and deep domain knowledge to partner with clients for solving their business challenges. This is unlike earlier days when Indian BPO’s only used to serving the processing and operational needs of these enterprises.

Indian BPO’s focus on high value side of business consulting has certainly helped them reap benefits in terms of revenue over the last year. In the days to come we can see that more and more BPO’s focusing on developing capabilities around building up strong global delivery network. They will have the high profile consultants operating out of onshore centres with deep market and domain knowledge.

Indian BPO’s are not just growing organically by having more onsite centres, but they have also focused on growing inorganically bringing in firms with local business consulting experience, hoping that it would certainly increase the value of customer engagement.

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