Revenue generated by Indian domestic BPO services to touch $1.6 billion by 2014
A report released by global technology research firm Gartner has projected that the revenue generated by the Indian domestic business process outsourcing (BPO) services segment will be around $1.6 billion by the turn of 2014. This is a whopping rise considering the fact that revenue generated by this sector in 2009 was to the tune of $521 million. Gartner has also predicted that revenue generated by the BPO services in the domestic market is expected to rise by 31.1 per cent during the corresponding period. The research firm said that the growth would be steady and steep from $521 million in 2009 to touch $683 million in 2010 and then peak to $1.6 billion by 2014.
Quoting the Gartner report, a financial website reports that elevated fiscal growth, competitive force, alertness, time to market, novelty and acceptance across verticals and span of services is expected to drive such soaring pace of growth in this segment. It said that major outsourcing of process management would establish the subsequent growth wave in the country’s domestic IT and ITeS industry. According to Arup Roy, senior research analyst at Gartner, during 2010, IT services spending will keep on shifting from isolated spending to outsourcing. According to him, new ways of growth will commence in the mid-market as well as in up-selling.
Roy further stated that several new hybrid service providers who will enter the market would obscure the divide between IT services and product and the latest offerings are likely to be on pay-per-use form. The Gartner report says that currently the business process outsourcing services are confined to basically the banking and financial and telecom services segments, in future it will probably be implemented by other verticals like healthcare, utilities, retail and the government departments having high growth rates. As a result, outsourcing such processes to third party experts would increase the benefits of competence, effectiveness as well as cost providing a competitive edge. According to Roy, currently voice-based services still greatly control the country’s domestic market.
Elaborating further, Roy said that majority of the business process outsourcing work is generally contract or call centre type of job providing customer care as well as sales and marketing services. By 2014, this type of jobs would involve around 65% to 70% of the BPO market. Stating that the BPO industry is still in the emerging phase, he said that in the near future, BPO firms would expand their activities to include services like finance and accounting, HR process outsourcing, analytics and other specialty services. He concluded saying that with the increase in adoption of these niche services, the environment of the vendors would also undergo a change as much bigger, high-tech and professional providers entering the market.