As the cost pressure rises in the US, it only means better business prospects for Indian BPO industry
Uncle Sam’s plight has implications for a range of sectors,
and one would quite obviously agree that the Business Processing Outsourcing (BPO) sector would be among the most affected. As they are already awake for most part of the night, it’s now time for them to wrack their brains even during the day – all to minimise the devastating impact of the crisis.
Affirms Sunil Kant Munjal, Chairman Hero Corporate Service Ltd., “If our clients get affected so do we…” No doubt, the $11 billion Indian BPO industry, which according to NASSCOM, accounts for approximately 40% of the Global Business Process Offshoring (further expected to grow by whopping $50 billion by 2012), is under the scanner. The worst ones being thrashed by the blow of this merciless subprime crisis are the mortgage and banking firms, which ironically are the second largest outsourced vertical, next only to IT. In fact, IndyMac Bancorp, one of the largest independent mortgage lenders in the US, has already cut down its staff (primarily based in India) by 27%. If that’s not enough, the slowdown has also forced Parsec Interact Inc., a California-based mortgage firm into bankruptcy. It has closed down its shop in India – Parsec Loans.
Rajesh Mokashi, Executive Director, Credit Analysis and Research Ltd, is also of the opinion that “this crisis has adversely affected the mortgage, property and other related markets. This is leading to slowdown of some of these businesses and as Indian BPOs are dependent on these clients they will also get affected. However, bigger BPO’s won’t feel it much because of their diverse portfolio.” Undoubtedly, businesses are getting affected but then there are some who sense an opportunity to be tapped even in this nightmare. Yes, the subprime crisis is getting them more business. And if you look at what Wall Street is doing, you too get the feel! The more cost pressure these financial firm face, the more they would look towards outsourcing as a measure to save cost.
This could mean additional business for many BPO firms operating in India. “Two key reasons why clients outsource to India are cost and availability of talent. And no doubt the subprime crisis is enhancing the cost pressure on the global financial services industry, but the talent is still there,” agrees Joydeep Datta Gupta, Executive Director, Deloitte and Touche Consulting, India.
Raman Roy, CMD, Quatrro voices, “Less than 5% of the total opportunity in this BPO sector has been tapped till now, which is indicative of the enormous growth potential available to the industry”. Although the present may look dark and bleak for some organisations but surely this is not the end of the road in terms of business prospects. But Indian BPO’s will have to be particularly careful to ensure that they lap up this opportunity or they could lose it to aggressive competition from Philippines, Vietnam or even for that matter China.
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Source : IIPM Editorial, 2008
Uncle Sam’s plight has implications for a range of sectors,
and one would quite obviously agree that the Business Processing Outsourcing (BPO) sector would be among the most affected. As they are already awake for most part of the night, it’s now time for them to wrack their brains even during the day – all to minimise the devastating impact of the crisis.Affirms Sunil Kant Munjal, Chairman Hero Corporate Service Ltd., “If our clients get affected so do we…” No doubt, the $11 billion Indian BPO industry, which according to NASSCOM, accounts for approximately 40% of the Global Business Process Offshoring (further expected to grow by whopping $50 billion by 2012), is under the scanner. The worst ones being thrashed by the blow of this merciless subprime crisis are the mortgage and banking firms, which ironically are the second largest outsourced vertical, next only to IT. In fact, IndyMac Bancorp, one of the largest independent mortgage lenders in the US, has already cut down its staff (primarily based in India) by 27%. If that’s not enough, the slowdown has also forced Parsec Interact Inc., a California-based mortgage firm into bankruptcy. It has closed down its shop in India – Parsec Loans.
Rajesh Mokashi, Executive Director, Credit Analysis and Research Ltd, is also of the opinion that “this crisis has adversely affected the mortgage, property and other related markets. This is leading to slowdown of some of these businesses and as Indian BPOs are dependent on these clients they will also get affected. However, bigger BPO’s won’t feel it much because of their diverse portfolio.” Undoubtedly, businesses are getting affected but then there are some who sense an opportunity to be tapped even in this nightmare. Yes, the subprime crisis is getting them more business. And if you look at what Wall Street is doing, you too get the feel! The more cost pressure these financial firm face, the more they would look towards outsourcing as a measure to save cost.
This could mean additional business for many BPO firms operating in India. “Two key reasons why clients outsource to India are cost and availability of talent. And no doubt the subprime crisis is enhancing the cost pressure on the global financial services industry, but the talent is still there,” agrees Joydeep Datta Gupta, Executive Director, Deloitte and Touche Consulting, India.
Raman Roy, CMD, Quatrro voices, “Less than 5% of the total opportunity in this BPO sector has been tapped till now, which is indicative of the enormous growth potential available to the industry”. Although the present may look dark and bleak for some organisations but surely this is not the end of the road in terms of business prospects. But Indian BPO’s will have to be particularly careful to ensure that they lap up this opportunity or they could lose it to aggressive competition from Philippines, Vietnam or even for that matter China.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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