BPO in India

India became familiar with Business Process Outsourcing? only in the early and mi
d 1990?s, but
now the entire country seems to be quivering with the BPO fever'. In spite of its
fresh arrival on the Indian picture, the industry has grown-up and become a ver
y significant part of the exportoriented IT services and services model. While i
t originally began as a facility targeted at multinational companies, today it h
as developed into a broad based business stage backed by leading Indian IT softw
are and service organizations and third party service providers. The foreign dir
ect investment (FDI) in the country owes a lot to this sector, which is progress
ing at a break-neck speed. The different kinds of services offered by BPO's incl
ude Customer Support, Technical Support, Telemarketing, Insurance Processing, Da
ta Processing, Internet/Online/Web Research and so on. The cheap labor costs and
the pool of skilled, English-speaking Indians havealways been the two foremost
factors contributing to the BPO boom in the country. As the National Association
of Software Services and Companies (NASSCOM) points out, the other equally moti
vating factors include strong quality orientation among players, ability to offe
r round-the-clock services based on the country's unique geographic location, po
sitive policy environment which encourages investments and a friendly tax struct
ure, which places the ITES/BPO industry on almost equal footing with IT services
companies. Part of the growth in the ITES/BPO industry is due to the National T
elecom Policy (NTP), which was introduced in 1999, which deregulated the telecom
industry and opened the industry to national and international competition. The
governments of various states also provided help to companies to overcome recru
itment, retention, and training challenges in order to attract reserves
to their region.
Seeing the success of India?s IT industry, the central government recognized the
ITES/BPO sector as a key provider to the economic growth and prioritized FDI at
traction into this segment by establishing Software Technology Parks? and Export E
nterprise Zones?. Incentives previously enjoyed by the software industry, such a
s tax holidays, have also been made available
to the ITES/BPO sector. Additionally, the National Association of Software and S
ervice Companies (NASSCOM), which
acts as an advisor, consultant and coordinating body for the ITES/BPO industry and
liaison between the industry and central and state government committees, has p
rovided keen support of the ITES/BPO industry has led to the addition of call ce
nters in the Business Auxiliary Services? segment, thereby ensuring exception fro
m service tax under the Finance Bill. The national business development goal for
2020 includes constructing a US$225 billion ITES/BPO industry. To encourage FDI
, the Indian government permits full (100 percent) equity foreign direct investm
ent (FDI) in ITES/BPO companies and allows ITES/BPO companies duty-free import o
f capital goods (under the Export Promotion of Capital Goods scheme). Such incen
tives in this sector have led to a stable investment inflow by large overseas co
mpanies such as Reuters to establish large captive ITES/BPO facilities across In
dia.
The existing ITES/BPO operations of major multi-nationals are also being shaped
up to provide to the ever increasing requirement for improved and speedier servi
ces. Approximately all of India?s biggest ITES/BPO giants have announced some fo
rm of growth and are fast tracking recruitment to plug in the extra vacancies.
?

ROLE OF BPO SECTOR IN GENERATE EMPLOBLITY

Today, companies seek to capture the full value that global outsourcing offers.
While more and more of the developed markets are coming in the fold of BPO offer
ings, domestic markets as well as some of the emerging markets are beginning to
use these services as well. Businesses are defining the core of their businesses
more sharply than ever, and are open to outsourcing everything else. Another tr
end is the emergence of BPO services relating to industries which may not have e

xplored this option or have done so to a lesser extent, for example media, adver
tising, and education. Another area is knowledge process outsourcing (KPO), whic
h includes activities that require greater skill, knowledge, education and exper
tise to handle.
There are no estimates on the potential size of the KPO market, but consulting a
lone is worth $140 billion annually. Even if a small percentage of this can be o
utsourced, it runs into billions says Mr Subinder Khurana, President of marketRx
, a KPO company. Some companies such as GE, Amex and McKinsey have already start
ed to outsource work to India. According to a Confederation of Indian Industry (
CII) study, India is all set to emerge as the global KPO hub and is set for expl
osive growth. By the year 2010, India will dominate close to 70% of the global K
PO sector. Apart from education, the other areas are engineering design, biotech
and pharmaceuticals, basic data search, integration and management.

Skill requirement of the BPO Industry

The ITES industry comprises BPO and operations. The huge range of job roles offe
red are thus either voice based or non-voice based. The industry, be it voice or
nonvoice,by its very nature requires a great deal of communication with custome
rs offshore and on shore and hence skills in general abilities such as written a
nd spoken English,are desirable and mandatory. The voice based processes such as
customer service; tech support; telesales, and collections require a person to
be good at spoken English in addition to the general abilities, whereas the skil
ls required for a non-voice based process such as order processing, financial tr
ansaction, and medical transcription would require more emphasison typing skills
and quantitative ability rather than spoken English