Outsourcing

Indian outsourcing's little brother: In decline or just in need of a makeover?

India's business process outsourcing industry seems to be undergoing an identity crisis that some insiders think only a change of image can cure.

India's business process outsourcing sector has long been eclipsed by its big brother, the IT offshoring industry. Photo: Shutterstock

There was a time about a decade ago when India was known as BPO Nation and the call-centre capital of the world. Fresh Indian school and college graduates with aliases and trained accents handled customer-service calls from irate Westerners. They remotely marketed goods and services, and cajoled tardy customers into paying their bills.

Today, the glory days are behind the business process outsourcing (BPO) industry. Neighbouring Philippines has overtaken India as the world's largest call-centre hub. Growth in the BPO services sector is easing off and a talent shortage is squeezing companies. Industry executives are saying India's BPO sector is in need of an urgent makeover.

The BPO industry has long been eclipsed by its big brother, India's IT industry, says Shanmugham 'Nags' Nagarajan, co-founder and chief people officer of [24]7 Inc, a technology-led BPO with sizable operations in India. For a long time the BPO sector was referred to as ITES, or IT-enabled services, a name that conveyed an inferior position compared with the much-feted IT industry.

The lack of a distinct identity and its accompanying status has hurt it in many ways, says Nagarajan. "The government has stopped nurturing the fledgling BPO industry, though it is only half as old as the IT industry," he says.

The industry's problems run deep. For a long time, call-centre jobs have been seen as low-paying, dead-end career options. Yet in fact call-centre companies have brought well-paid global jobs and a world-class working environment to a country that has people with widely varying levels of education, aptitude and English skills.

The dilemma for the industry seems to be about imagining its future afresh. It is an identity crisis.

Individual BPO companies, especially the bigger ones, have moved rapidly up the value chain and are doing a good job of restructuring and rebranding themselves. [24]7 Inc for instance has gone through a recent name change - it was formerly 24/7Customer - and describes itself as a technology-led BPO.

Many companies have evolved from pure-play, voice-based services to high-value, sophisticated offerings. But the industry's image has not reflected this change, says Mohit Thukral, vice president and global operations head at leading BPO company Genpact. At Genpact, for example, revenues from voice-based services have shrunk to 20 per cent of its total.

BPO's struggle with social positioning

Over the past five years, India has slowly transformed itself into a mature BPO destination in terms of experience and capabilities, providing the widest spectrum of services across industries and domains. However, a talent deficiency has frustrated overall growth. The sector has struggled with the social positioning of the BPO employee, a challenge that the IT industry never faced.

More than anything, there is a pressing need to change industry perceptions in the talent market in India, says Rohit Kapoor, vice chairman and CEO of EXL Service, another leading BPO player. The repositioning would help attract high-level talent to newer BPO verticals such as accounting, analytics, under-writing, medical, taxation and legal fields.

To improve the talent pipeline, a potential worker's elderly relatives or extended family will need to see that BPO is not only about night shifts and customer service calls but also about varied roles in specialised fields. By rebranding, the industry is hoping that these changes can be conveyed to potential employees and their families.

Bigger BPO firms such as WNS, Genpact and EXL Service are prevailing on IT industry trade body Nasscom to work on the repositioning.

While these efforts continue, other smaller industry companies are bitter that in their view Nasscom has done little to address the many challenges facing the BPO sector, including visas and taxation. There are murmurs that it is time to break away from the high-profile Nasscom and the wider IT industry and set up a separate, parallel lobby group.

In India there is now a divide in what was once an industry united under the label of outsourcing.

About

Saritha Rai is an India-based journalist and commentator who covers technology, business and society from her ringside seat in Bangalore.

3 comments
kavinjonson
kavinjonson

Outsource in india is growing too fast in BPO services because India has lots of BPO firms in its various cities. outsource in india

chrisl317
chrisl317

Still can't understand either and most of the time I end up teaching them.

edjube
edjube

I ask for a English speaking person I can understand.

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