23.4.09

Indian BPO revenue to double by 2010: Gartner

Fear of US protectionist stance towards business due to the economic turmoil notwithstanding, a recent Gartner report says the business process outsourcing (BPO) market share of Indian vendors is expected to nearly double by 2010. By the end of 2008, the top 20 Indiacentric BPO providers accounted for $4 billion in revenue, representing 5% of the $80 billion revenue of the top 150 BPO vendors. This is a significant leap considering just six years ago in 2002 there were few, if any, India-centric vendors in the top 150 BPOs worldwide. North America has been the most successful sales location for Indian BPO providers, where the top-20 India-centric BPO providers generate about $2.2 billion in revenue. Western Europe showed strong growth, mostly in the UK, and accounted for $1.4 billion in revenue for the top 20 Indian BPO providers in 2008. The report also says that Indian BPO providers have proved to be stiff competition to western BPO providers. Further, analysts expect increase in revenue to be evident in the coming days, accelerated because of the economic pressures that are leading to demand for low-cost BPO. From a vertical-market perspective, Indian BPO providers also had more success in telecommunications, manufacturing, insurance and banking than in government and retail, however going forward, analysts believe that government and retail will play an important role in the growth of Indian BPO. “We are expecting that by 2010, the market share of Indian vendors will become something around 10%. Retail, government and services, would become major contributor to this growth, apart from existing major verticals such as banking and financial, manufacturing, telecom, utility,” commented Arup Roy, senior research Analyst at Gartner. “Indian BPO providers are swiftly evolving to balance exposure to vertical industries, currency and legislation issues,” he added. “North America will continue to be the major provider, however, Eastern Europe is also seen as a potential location,” commented Arup. Analysts at Gartner feels that contact centers and analytics services will likely to see the highest growth. “It is highly likely that many new competitors will emerge from India during the next few years. Contact centers and analytics services will likely see the highest growth, having the lowest entry barriers because relatively little technical or specific process expertise is required,” said Cathy Tornbohm, research vice president, at Gartner. However, this should not undermine the high end outsourcing services which are geared to make a dent in this market such as those provided by legal process outsourcing (LPO’s) and other specialised vendors providing medical transcription services and specialised recruitment process outsourcing.

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