World Wonders Web

BPO in India

India is internationally recognized as the leading hub of business process outsourcing activities. It is interesting to note that while the major share of outsourced blue collar jobs are handled by countries like China, India is the major player in the outsourced white collar jobs. The well educated English speaking community which is available at a reasonable labor cost is the USP of India.

Not only has the BPO industry has grown in its size but also in the competitive advantage. The expansion of the internet in the sub continent coupled with it becoming so cheap and affordable can be considered the key factor in the growth of BPO in India. The business has boomed to the extent that many people are now BPOs out of their cyber cafes and houses in various urban areas of the country.

Though India has been the preferred outsourcing destination for a long time, the industry witness tremendous investment and boom in 2004-05 when major Indian and MNC players stepped up hiring. The telecom and BFSI segments catalyzed the domestic BPO market which matched the growth of BPO exports. As a results of numerous mergers and acquisitions taking place within the sector, the market experienced maturity and consolidation. There are over 500 companies working within the Indian BPO sector and together they process a $275 million business a year.

Figures from a recent survey carried out by PricewaterhouseCoopers
Global BPO Market by Industry
Information Technology 43% 
Financial Services 17% 
Communication (Telecom) 16% 
Consumer Goods/ Services 15% 
Manufacturing 9% 

Global BPO Market by Geography
United States 59% 
Europe 27% 
Asia-Pacific (incl. Japan) 9% 
Rest of the World 5% 

Size of Global Outsourcing Market
2000 USD$ 119 Billion 
2005 USD$ 234 Billion 
2008 (est.) USD$ 310 Billion 

Size and Growth of BPO in India
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)
Call Center Employee cost
USA US$ 19,000 annually 
Australia US$ 17,000 annually 
Philippines US$ 9,050 annually 
India US$ 7,500 annually 

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.
and together they process a $275 million business a year.

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.

The major sectors which are getting outsourced to India comprises of call center industry, medical transcription industry, software and application development industry, finance, logistics and accounting development industry and animation industry.

Cities that are leading BPO-ITES hubs in India today:
Bangalore, Chennai, Hyderabad, Mumbai, NCR (Gurgaon, Noida, Faridabad, Greater Noida), New Delhi, Pune.
and together they process a $275 million business a year.

With rising infrastructure costs in these cities, many BPO’s are shifting operations to cities like: Ahmedabad, Amritsar, Chandigarh, Indore, Jaipur, Kanpur, Kochi, Kolkata, Mohali and Nagpur.

The Government of India has recognized the importance of BPO sector and its economic & social implication and in partnership with private infrastructure giants is committed to bringing all around development and providing robust infrastructure all over the nation.