India Intelligence Report

India to Dominate BPO, off shoring


An AT Kearney study predicted a continued 9% growth in Business Process Outsourcing (BPO) and 47% growth in outsourcing netting an estimated USD 28 billion and said India will reap most of this business. It further predicted that while other low-cost competitors such as China, the Philippines, and Malaysia may emerge in the next 3 years, India is likely to corner most of this market.

Benchmarking three parameters such as financial costs, people skills and availability, and business environment, the survey found Chennai to rank way above competitors such as Bangalore, Hyderabad, NCR, Mumbai, Kolkata, Pune, Kochi, and Jaipur. Thanks to crumbling infrastructure from political apathy, so-called Information Technology capital of India has been dethroned and is no longer the most attractive. Hyderabad, benefiting from many years of investment by former Chief Minister Chandrababu Naidu is the runner-up.

Confirming statements by many eminent educationalists and businessmen, the biggest challenge for India to meet this growing demand will be the availability of skilled and employable workforce. Many Indian critics say that while Indian educational institutions churn out labor that are generally smart, they do not impart the skills required for working in a global and multi-national environment.

However, the Kearney report is optimistic saying that business requirements and needs will bring that change. Already, companies invest heavily in training of their employees on basic soft-skills such as language, communication, accent elimination, ownership and responsibility assumption, etc. Continued movement of business from developed nations to developing nations and from Indian first tier cities to second tier cities will make this issue even sharper in the coming years.