September 22, 2011: Is Indian Business Process Outsourcing (BPO) sector to drop the crown of top offshore BPO destination?
Ovum report says it may happen in another five years.
According to the latest survey conducted by ovum, the most leading research analyst that has always generated valuable research information for the BPO and IT industry has reported that in another coming five years Indian will be pulled down in the BPO business as the growth rate of China, Taiwan and Hong Kong is expected to be in a higher phase.
The report came earlier this week as a result of the study conducted by ovum on the future trend in the Asia-Pacific BPO sector which concluded that between 2010 and 2015 China will perform high in the sector to generate an over whole growth rate of 16.1 % (CAGR). It is also expected that countries such as South Korea and India might share the second and third position with a growth rate of 15.7 percent and 14.6 percent.
The growth rate of South Korea is again considered as a big threat for India. Report also included that while considering the developed economies in the region, the Australia and New-Zealand BPO sector is also to grow at the rate of CAGR of 7.4 percent. Over whole the Business Process Outsourcing (BPO) industry in Asia-Pacific is region is about to generate revenue up to 17.47 billion US dollar in 2015. The growth rate will be 9.3 present every year, the report added.
Ovum also spoke about the reason for the uptrend, according to which Indian BPO sector has matured enough when compared to the Chinese sector. The growth potential in China is high as the sector deals with outsourcing services such as financial and telecom services that have a huge demand in the current scenario. Moreover there is also high demand in the services related to retail segment. But, when considering Indian outsourcing service providers they are much into Human Resource outsourcing and talent management which does not has enough demand in the global outsourcing industry.
In the past two to three years, offshore market such as Philippines and near shore market such as South Africa has emerged as preferred destinations for many global players who find it comfortable to depend on these markets and has already shifted from India. Today service buyers are very conscious in selecting the vendors and look into many factors such as price, easy access and other facilities. Meanwhile Indian BPO industry has already lost the tag line of the cheapest destination for Business Process Outsourcing (BPO) and Information Technology (IT) business.