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BPO business set to grow five-fold in 5 years

BANGALORE: A five-fold growth in five years might seem like a tall order — but for the buoyant Indian business process outsourcing (BPO) industry, it is an ‘achievable’ target, feels the National Association of Software and Service Companies (Nasscom). Worth $11 billion today, the outsourced services sector is all set to cross $30 billion by 2012, even at current trajectories of growth. But with some key factors falling into place, there is no reason why that number should not be $50 billion. Nasscom’s confidence is bolstered by a study it has commissioned by global services strategy consultants, Everest Group, key findings of which were released here on Tuesday.

“India is now part of the global delivery chain — and niche players, captive units and third party BPO providers, cover the full gamut of outsourced services,” said Som Mittal, who took over from Kiran Karnik as Nasscom’s President this month, “But while monitoring our tail light to see how far we have come, we also need to watch the headlight to see where we are going.”

Presenting highlights of the “Roadmap 2012” study, Gaurav Gupta, Head, Everest Group, suggested that the India’s delivery footprint had grown beyond a few metros to encompass some 250 delivery points in 30 locations. The $50-billion target would still represent just five per cent of the addressable market — “There is a lot of headroom,” he said, “In the process, it will create two million direct jobs and three times that number in indirect ancillaries.”

Raman Roy, Chairman and Managing Director of Quatrro, and one of the pioneers of the Indian BPO saga, cautioned that “we have to do it just right,” if the projections were to become real. “We want to be become the accounting ‘back office’ to the world, but the implication is a dramatic six fold growth in delivery centres which means creation of both social and physical infrastructure in the Tier 2 and 3 cities.”

“The Customer is the biggest ‘Oliver’, he always asks for more,” Mr. Roy added, reminding that places like Philippines, East Europe, South America, South Africa — even Sri Lanka — were aggressively competing by offering a variety of fiscal and other incentives to their BPO industry.

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