| The outsourcing history of India is one
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| | skilled, English-speaking manpower, which
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| of phenomenal growth in a very short span
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| | is being harnessed even by ITES hubs such
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| of time. The idea of outsourcing has its
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| | as Singapore and Ireland.- Improving
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| roots in the 'competitive advantage'
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| | telecom and other infrastructure which is
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| theory propagated by Adam Smith in his
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| | at par with global standards.- Strong
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| book 'The Wealth of Nations' which was
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| | quality orientation among players and
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| published in 1776. Over the years, the
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| | their focus on measuring and monitoring
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| meaning of the term 'outsourcing' has
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| | quality targets.- Fast turnaround times
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| undergone a sea-change. What started off
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| | and the ability to offer 24x7 services
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| as the shifting of manufacturing to
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| | based on the country's unique geographic
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| countries providing cheap labour during
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| | location that allows for leveraging time
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| the Industrial Revolution, has taken on a
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| | zone differences.- Proactive and positive
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| new connotation in today's scenario. In a
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| | policy environment which encourages ITES
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| world where IT has become the backbone of
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| | BPO investments and simplifies rules and
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| businesses worldwide, 'outsourcing' is
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| | procedures.- A friendly tax structure,
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| the process through which one company
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| | which places the ITES/BPO industry on par
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| hands over part of its work to another
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| | with IT services companies.Outsourcing to
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| company, making it responsible for the
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| | India offers significant improvements in
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| design and implementation of the business
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| | quality and productivity for overseas
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| process under strict guidelines regarding
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| | companies on crucial parameters such as
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| requirements and specifications from the
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| | number of correct transactions/number of
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| outsourcing company. This process is
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| | total transactions; total satisfaction
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| beneficial to both the outsourcing
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| | factor; number of transactions/hour and
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| company and the service provider, as
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| | average speed of answer. Surveys by
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| enables the outsourcer to reduce costs
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| | NASSCOM also revealed that Indian
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| and increase quality in non core areas of
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| | companies are better focussed on
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| business and utilize his expertise and
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| | maintaining quality and performance
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| competencies to the maximum. And now we
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| | standards. Indian ITES/BPO companies are
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| can see the benefit to the service
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| | on an ascending curve as far as the
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| companies in India as they mature,
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| | quality standards are concerned.
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| prosper and build core capabilities
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| | Organizations that have achieved ISO 9000
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| beyond what would generally be possible
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| | certification are migrating to the ISO
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| by the outsourcing company.Since the
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| | 9000:2000 standards and companies on the
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| onset of globalization in India during
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| | CMM framework are realigning themselves
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| the early 1990s, successive Indian
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| | to the CMMI model. Apart from investing
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| governments have pursued programs of
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| | in upgrading their CRM and ERP
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| economic reform committed to
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| | initiatives, many Indian ITES companies
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| liberalization and privatization. Till
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| | are beginning to acknowledge the COPC
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| 1994, the Indian telecom sector was under
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| | certifications for quality and are
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| direct governmental control and the state
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| | working towards achieving COPC
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| owned units enjoyed a monopoly in the
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| | licences.Despite being a fledgling in the
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| market. In 1994, the government announced
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| | global ITES/BPO industry, the Indian ITES
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| a policy under which the sector was
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| | industry recorded a growth rate in excess
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| liberalized and private participation was
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| | of 50% in 2002-03. Industry experts
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| encouraged. The New Telecom Policy of
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| | consider this a positive indication of
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| 1999 brought in further changes with the
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| | the times to come and a look at the
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| introduction of IP telephony and ended
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| | ranking and the revenue and headcount
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| the state monopoly on international
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| | statistics show the potential of the
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| calling facilities. This brought about a
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| | industry.The global ITES/BPO industry was
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| drastic reduction and this heralded the
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| | valued at around US$ 773 billion during
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| golden era for the ITES/BPO industry and
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| | 2002 and according to estimates by the
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| ushered in a slew of inbound/outbound
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| | International Data Corporation worldwide,
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| call centres and data processing centres.
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| | it is expected to grow at a Compounded
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| Although the IT industry in India has
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| | Annual Growth Rate (CAGR) of 9% during
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| existed since the early 1980s, it was the
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| | the period 2002-2006. NASSCOM lists the
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| early and mid 1990s that saw the
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| | major indicators of the high growth
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| emergence of outsourcing. One of the
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| | potential of the ITES/BPO industry in
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| first outsourced services was medical
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| | India as the following (Source During
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| transcription, but outsourcing of
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| | 2003-04, the ITES-BPO segment is
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| business processes like data processing,
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| | estimated to have achieved a 54 percent
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| billing, and customer support began
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| | growth in revenues as compared to the
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| towards the end of the 1990s when MNCs
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| | previous year.- ITES exports accounted
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| established wholly owned subsidiaries
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| | for US$ 3.6 billion in revenues, up from
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| which catered to the process off-shoring
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| | US$ 2.5 billion in 2002-03.- The ITES-BPO
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| requirements of their parent companies.
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| | segment also proved to be a major
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| Some of the earliest players in the
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| | opportunity for job seekers, creating
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| Indian market were American Express, GE
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| | employment for around 74,400 additional
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| Capital and British Airways.The ITES or
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| | personnel in India during 2003-04.- The
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| BPO industry is a young and nascent
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| | number of Indians working for this sector
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| sector in India and has been in existence
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| | jumped to 245,500 by March, 2004.- By the
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| for a little more than five years.
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| | year 2008, the segment is expected to
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| Despite its recent arrival on the Indian
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| | employ over 1.1 million Indians,
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| scene, the industry has grown
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| | according to studies conducted by NASSCOM
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| phenomenally and has now become a very
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| | and leading business Intelligence
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| important part of the export-oriented IT
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| | Company, McKinsey & Co. Market research
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| software and services environment. It
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| | shows that in terms of job creation, the
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| initially began as an activity confined
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| | ITES-BPO industry is growing at over 50
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| to multinational companies, but today it
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| | percent.
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| has developed into a broad based business
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| | Surveys of the Indian ITES/BPO industry
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| platform backed by leading Indian IT
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| | in 2004 expected it to follow the trends
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| software and services organizations and
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| | given below:Customer care: Customer care
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| other third party service providers. The
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| | and support services will continue to
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| ITES/BPO market expanded its base with
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| | lead in terms of revenue generation, with
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| the entry of Indian IT companies and the
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| | a turnover of around US$ 1200 million in
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| ITES market of the present day is
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| | 2003-04., up from last year's turnover of
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| characterized by the existence of these
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| | US$810 million.Finance: With the
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| IT giants who are able to leverage their
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| | financial services segment moving into
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| broad skill-sets and global clientele to
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| | value added domains like insurance claims
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| offer a wide spectrum of services. The
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| | processing, financial management services
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| spectrum of services offered by Indian
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| | and equity research, this segment is
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| companies has evolved substantially from
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| | expected to clock the highest growth,
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| its humble beginnings. Today, Indian
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| | with estimates of US$820 million in
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| companies are offering a variety of
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| | revenue in 2003-04, up from US$510
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| outsourced services ranging from customer
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| | million in 2002-03.HR services: HR
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| care, transcription, billing services and
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| | services are also expected to grow and
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| database marketing, to Web sales
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| | revenues are expected to touch US$70
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| marketing, accounting, tax processing,
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| | million during 2003-04, thereby providing
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| transaction document management,
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| | latent opportunities to the industry's
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| telesales/telemarketing, HR hiring and
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| | dominant players.Payment services: This
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| biotech research.Looking at the success
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| | segment has also been identified as a
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| of India's IT/software industry, the
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| | high growth area within the industry, and
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| central government identified ITES/BPO as
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| | is expected to generate revenues of
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| a key contributor to economic growth
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| | around US$430 million for 2003-04, up
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| prioritized the attraction of FDI in this
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| | from US$210 million in
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| segment by establishing 'Software
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| | 2002-03.Administration: Revenues from the
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| Technology Parks' and 'Export Enterprise
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| | administration services segment are
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| Zones'. Benefits like tax-holidays
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| | expected to increase from US$ 310 million
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| generally enjoyed by the software
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| | in 2002-03, to US$540 million during
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| industry were also made available to the
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| | 2003-04.Content development: The content
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| ITES/BPO sector. The National Telecom
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| | development services segment which
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| Policy (NTP) introduced in 1999 and the
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| | includes engineering and design services,
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| deregulation of the telecom industry
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| | digitization (GIS), animation, network
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| opened up national, long distance, and
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| | management and biotech research, is
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| international connectivity to
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| | expected clock a turnover of around
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| competition. The governments of various
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| | US$520 million in 2003-04.The
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| states also provide assistance to
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| | availability of technically trained and
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| companies to overcome the recruitment,
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| | skilled manpower in India is making
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| retention, and training challenges in
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| | companies across the world look at the
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| order to attract investments to their
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| | country as a profitable base to shift
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| region. The National Association of
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| | their high-end support services.
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| Software and Service Companies (NASSCOM)
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| | Companies like COLT Technology Services
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| has created platforms for the
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| | are considering outsourcing their
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| dissemination of knowledge and research
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| | technical back-office support work to
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| in the industry through its survey and
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| | India. Other areas are high-end network
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| conferences. NASSCOM acts as an 'advisor,
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| | engineering/management support. Another
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| consultant and coordinating body' for the
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| | field which is showing immense potential
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| ITES/BPO industry and liaisons between
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| | is that of digital content creation and
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| the central and state government
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| | animation. Animation studios like Walt
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| committees and the industry. The ardent
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| | Disney, MGM and Warner Brothers are
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| advocacy of the ITES/BPO industry has led
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| | already outsourcing low-end work like
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| to the inclusion of call centers in the
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| | clean-ups, tweening and modelling to
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| 'Business Auxiliary Services' segment,
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| | India. The availability of skilled and
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| thereby ensuring exemption from service
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| | trained manpower and India's ability to
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| tax under the Finance Bill of 2003.These
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| | keep in step with the latest
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| measures have led to a steady inflow of
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| | technological advances in the industry is
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| investments by large foreign companies
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| | prompting foreign studios to consider
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| such as Reuters, for establishing large
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| | India as a base to shift other high-end
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| captive ITES/BPO facilities across India.
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| | animation work like storyboarding and
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| Moreover, the existing ITES/BPO
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| | developing original content for animated
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| operations of major multi-nationals are
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| | films ad TV series. Tele-radiology is the
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| also being ramped up to cater to the ever
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| | next segment that holds great promise,
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| increasing demand for better and speedier
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| | mainly due to the time zone differences
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| service. Almost all of India's top ITES
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| | and the availability of highly skilled
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| BPO giants have announced some form of
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| | radiologists and companies like
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| expansion and are in the process of
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| | Teleradiology Solutions have been
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| hiring manpower to fill the additional
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| | offering their services to US and
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| seats. India's competitive advantage lies
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| | South-East Asian hospitals for the past
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| in its ability to provide huge cost
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| | two years. Engineering services like CAD
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| savings thereby enabling productivity
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| | CAM 2D, 3D and CAE modelling and design
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| gains and this has given India an edge in
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| | automation are the latest additions to
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| the global ITES/BPO marketplace. NASSCOM
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| | the ever increasing list of processes
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| studies pinpoint the following factors as
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| | being outsourced to India.For more
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| the major reasons behind India's success
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| | reading on outsourcing, log on to
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| in this industry (Source: Abundant,
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| | outsource2india.
|
