Indian domestic BPO market will grow into a $1.2 bn business in 2011: Gartner

Barack Obama's tough stand against outsourcing has not been able to have much impact on Indian BPOs that are being poised for an impressive growth.

A latest report by the research firm, Gartner, predicts that the Indian BPO market will be growing at 19% through 2013. The research also says that due to the economic uncertainty, which led to some price and volume pressures, the domestic market could only grow by 7.3% y-o-y.

Change in business strategies will be the main mover of the BPO industry. TJ Singh, research director, Gartner comments, “In the short term, market trends such as changing demographics and affluence levels, consumption of value based services, increasing focus on service quality and continued momentum of mergers and acquisitions (M&As) bear watching, as their impact is certain to influence shifts in buyer needs and behavior”

Many reasons have been sited by the research firm for the expected growth. Says Singh, “In the last two years, many established Indian BPO providers and some of the multi-national corporation (MNC) service providers-focusing primarily on the international offshore services market-have shifted greater focus and investments to the Indian domestic market.” Gartner estimates the Indian domestic BPO market will grow into a $1.2 bn market by 2011, and up to $1.8 bn by 2013.

Indian BPOs are already providing stiff competition to western BPOs. The study sees positive reasons for the growth. The changing demographics, focus on service quality and increasing affluence in Asia/Pacific continue to drive shared services and BPO adoption, especially in Australia, China, India, and Southeast Asia

Research analysis firm also says that there will be a major shift in CEO priorities from early 2009, with top focus shifting from cost-cutting to customer retention, and also in enhancing the present relations. Taking proper steps to counter the downstream effects of recession, the top level management is ensuring RoI with improved productivity.

According to a previous report by Gartner, half of the top twenty global BPO providers now operate local US and European sales and delivery centers.

Union Budget 2010 has also put in focus the growth of the BPO industry in the country. It has provided direct tax benefits for income levels below Rs 8 lakh, which is likely to benefit many employees and others in the industry as they will now have more disposable income which will boost domestic spending. Constant evolution and experimentation have also played a determining role in boosting the Indian BPO industry.

archanasi@cybermedia.co.in