Apr 11 2008
Threats To The Indian BPO Sector
India which has been an unrivaled force in the BPO domain will face stiff global competition. Russia, China, Australia, South Africa, New Zealand, Mauritius, Fiji, Malaysia, Philippines and Ghana are the countries that top the list as potential threats to the Indian BPO market. Where the Philippines focuses on voice services, Malaysia has zeroed in on transaction processing and South Africa on other BPO operations. Certain countries are even relying heavily on their proximity towards the US.

Despite the boom and support that BPO sector has fetched, there are certain grass-root level setbacks too. These setbacks are strongly propagated to be threats resulting into backlash to the BPO activity in India.
Hear I am discussioning these setbacks :
- Lack of maturity in service line, increasing competition among e-logistics providers and management resistance are the main deterrents to the outsourcing in the logistics sector.
- Discretionary cuts in budgets, low growth due to industry maturity and decentralised nature of facilities management are the main deterrents to the outsourcing in the facility & operations management sector.
- Privacy concerns and technical nature of subject matter are the main deterrents to the outsourcing of legal services.
- If all above is not enough, the companies which are outsourcing non-core processes from third party service providers are literally placing their fate in the hands of another company, which appears to be a normal setback of BPO at the outset.
- Some companies which jumped BPO market in India are now looking to sell their assets being unable to scale operations upto the required level. As per the NASSCOM report, recently there were about 200 Indian companies offering BPO and related services looking for buyers.
- Companies rush into BPO market without understanding the kind of operational and marketing issues they would have to cope with, and the kind of gestation periods to be expected before profits can start flowing in consistently. As a result, many facilities that were set up are lying vacant, and the failed enterprises have to either close down or get acquired, as they have neither funds nor clients.
- The rapid growth of India’s ITES-BPO industry, has not been taken too well in developed countries from where jobs are coming to India. Recently, in the US, bills have been tabled in five states namely; New Jersey, Maryland, Connecticut, Washington and Missouri that sought to ban the transfer of state data processing contracts to developing nations. In the UK, three of the country’s biggest trade unions have come together to fight the loss of jobs to India.
One of the factors spurring BPO expansion in India is the healthy competition between cities. The top five cities are Chennai, Bangalore, Delhi, Mumbai and Kolkatta, with Bengaluru targeting the IT market, Chennai and Kolkatta focussing on accounts and Delhi and Mumbai taking up follow-up of payments and high-end job analysis, respectively. Quite understandably, Bengaluru leads the pack, with its professional approach to attracting and retaining clients. These threat can be avoid to make the India number one in the Call Center Industry. Today’s India is a land of huge opportunities for global investors. The reforms process that the nation embraced a decade ago is now paying off. India’s economy is sizzling and is one of the fastest growing in the world. It has also seen a surge in foreign investment lately.
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Having made an indelible mark in the global local business, Indian IT and ITeS sector is thriving much more in the BPO sector by maintaining their work Quality. India’s economy is sizzling and is one of the fastest growing in the world which also seen a surge in foreign investment lately. Indian market is keeping its position in the outsourcing sector. Government of India has introduced various policy concessions and initiatives to accelerate the growth of the IT-enabled outsourcing market. Data security, lack of product/domain expertise and inability to deliver results consistently pose major threats to the growth of the Indian BPO.