BPO lags behind IT sector

BPO revenues are not growing like earlier times. Top tier IT companies are growing at an average of 20-25% this year (2010-11). Most analysts believe that the industry will not rise to the pre-recession growth levels at least for the next couple of years.

India pioneered the BPO industry two decades ago. Today, a lot of BPO work, particularly voicebased, is being shipped to countries like the Philippines and South Africa. The revenue ratio in India is around 43:57 between voice and non-voice services. Higher labour and setup costs in India have been cited as the major reasons why India is losing out.

Jan – Sep Revenue
Growth Rates YOY (%)
BPOs 2008 2009 2010
Firstsource 40.79 19.1 3.83
Genpact 28.30 8.45 11.45
Infosys BPO N/A -3.2 15
Jul – Sep 2010 Quarter
Revenue Growth Rates YOY (%)
BPO Companies IT Companies
Firstsource 3 Infosys 24.2
Infosys BPO 12 TCS 25
Genpact 13 HCL 27.6

Last modified: December 23, 2010

A recent IBM Global Locations Trend report reported that Philippines offers a similar business environment to India at lower operational costs. The Philippines will earn $5.7 billion for call-centre work this year from the US, Europe and Australia, compared with the $5.5 billion generated by India, according to the Everest Group .

The worst hit have been pure-play BPOs which are said to be losing orders to more integrated players that offer IT services as well.

Source: Economic Times

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