Since it became a new industry, back in the early 1990s, BPO has became an integral part of the business management industry globally. It’s had its share of up and downs – 2010 (and a few years after) saw decline in revenues. But then so did everything else – this was soon after the Great Recession. 2015 saw the global BPO revenue fall from $104 billion (2014) to $88 billion which led to many calling it the end of the industry. However, it recovered quickly and was even expected to reach $220 billion by the end of 2020 (this was a pre-pandemic projection, though).
Today, the onset of big data analytics, process automation, and the likes has created more competitiveness in the field of BPO. However, there’s also an increase in the demand for talent in the BPO and IT sectors. The rise of e-commerce and health industries, along with the pre-existing IT industries, has led to creating a high demand for BPOs.
Let’s talk about future of BPO industry in India. India’s outsourcing market is one of the most sought after markets, by some of the world’s biggest organizations. In the early years outsourcing to India was primarily due to the availability of cheap labor, but that has changed. Today, as the undisputed industry leader, India is home to English-speaking skilled talent that no other low-cost country can match. Moreover, the country’s well-developed IT infrastructures in all of its major cities is also a big reason why many multinationals outsource to India. Also, efficient telecom and cellular network allow for the smooth flow in conversation which is a prerequisite in the outsourcing business.
A primary recipient of business process outsourcing industry contracts, the country leads the 2019 GSLI overall country rankings with an index of 7.07 for its combination of skill and value. India leading the index doesn’t come as news, however, as the country has been leading the world market since the measuring of attractiveness for location started. India was hosting more than 1,140 global in-house captive centers in March 2018 allowing almost half of the top 500 global companies to work in India.
Just one sign of the immense amount of talent available is Barclays Global Service Centre, which already employs more than 16,000 people and has announced that it will establish a new facility for up to 8,800 more employees. Recent developments within this sector include Nasscom’s new online platform for upskilling more than 2 million tech workers and educating 2 million others who could learn to do this work. In yet another sign of India’s leadership role in the value chain, Indian IT companies and ITES companies have established more than 1,000 delivery centers in approximately 80 different countries, and about 75 percent of global digital talent resides in the country.
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The BPO industry did take a hit during the early days of the lockdown, with a steep 34% fall in demand in the yearly comparison based on data from the TimesJobs RecruiteX Index. The same data, however, reported a 14% monthly (May 2020 – June 2020) growth in demand in BPO sector during India’s Unlock 1.0. The industry continued its fine recovery in the following month seeing a 15% growth along with IT (10%) and BFSI (7%) as the top three sectors with maximum M-o-M growth in talent demand in July 2020. The latest talent demand of Aug 2020 records rises of 8% M-o-M growth for IT/Telecom and BFSI, both closely related to the BPO industry.
With great infrastructure, cost-saving advantages, and a massive talent pool, the increasing demand for talent in the BPO and the IT sectors only spells well for the Indian outsourcing market that is truly poised to more than hold its place in the coming years.
As more and more businesses go global, the need to cater to customers across different countries living in different time zones, and speaking different languages arises. Deloitte’s Global Outsourcing Survey of more than 500 executives from leading organizations worldwide found that 31% of companies outsource as it enables them to enhance service quality to its customers. The ability to solve capacity issues (47%), focus on core business (57%), and access intellectual capital (28%) are also popular reasons to engage with the industry.
More than half the organizations surveyed were found to be adopting or were considering adopting, disruptive solutions to drive performance, improve speed to market, and increase innovation. While in the early days, outsourcing was about cost-cutting, the trend has changed today and only 9% of companies from the survey cited cost-cutting as a primary reason for outsourcing. Today, with transformation and development in IT, organizations have become dependent on the success of creative applications and extensions that IT could provide. As such, IT has become a key competitive factor for most of many organizations looking to outsource.
Today, a vast majority of organizations are considering or adopting disruptive solutions (cloud and RPA) for their operations and the onus is now on the service providers to provide these organizations with the same. The future belongs to those who are bold enough to ride the challenges that come with developing these disruptive solutions that will be the key to the outsourcing industry in the years to come.
