India's Value Proposition

With IT budgets facing a major squeeze in these tough economic times, global companies are focusing on reducing costs, cutting IT investments and outsourcing certain processes that allow them to concentrate on their core competencies.
In such an environment, where outsourcing by overseas companies is becoming the need of the hour, India 's prospects in this emerging opportunity segment are getting brighter.

Unmatched value proposition

The country's unmatched value proposition for customers-based on the factors such as cost savings, productivity gains and quality improvements have given India an edge in the global ITES-BPO marketplace. India is taking the lead in this environment on account of the following factors :

- Abundant, skilled, English-speaking manpower, which is being harnessed even by ITES hubs such as Singapore and Ireland
- Improving telecom and other infrastructure which is matching global standards
- Strong quality orientation among players and their focus on measuring and monitoring quality targets
- Fast turnaround times and the ability to offer 24x7 services based on the country's unique geographic location that allows for leveraging time zone differences
- Proactive and positive policy environment which encourages ITES-BPO investments and simplifies rules and procedures
- A friendly income tax structure, which places the ITES-BPO industry on par with IT services companie

Broadening services spectrum

In terms of outsourced services too, the Indian market has witnessed a substantial evolution. The ITES-BPO market is segmented along the lines of customer care, finance, HR, payment services, administration and content development. ITES-BPO companies are offering customers a range of outsourced services including customer care, Web sales/marketing, billing services, database marketing, accounting, transaction document management, transcription, telesales/telemarketing, tax processing, HR hiring and biotech research.

Growth

The mantle of high momentum--a virtual prerogative of the IT software services industry in the years gone by--appears to have fallen on the shoulders of the country's key ITES-BPO (Business Process Engineering) players. In the past 24 months alone, the ITES industry has recorded blazing growth, in excess of 50 percent. Even though it is on a smaller revenue base (as compared to the larger IT services market), the growth is a positive indication of the times to come.

The following facts point to the developments taking place in the ITES-BPO space :

- During 2003-04, the ITES-BPO segment is estimated to have achieved a 54 percent growth in revenues as compared to the previous year.
- ITES exports accounted for US$ 3.6 billion in revenues, up from US$ 2.5 billion in 2002-03.
- The ITES-BPO segment also proved to be a major opportunity for job seekers, creating employment for around 74,400 additional personnel in India during 2003-04.
- The number of Indians working for this sector jumped to 245,500 by March, 2004.

By the year 2008, the segment is expected to employ over 1.1 million Indians, according to studies conducted by NASSCOM and leading business Intelligence Company, McKinsey & Co. Market research shows that in terms of job creation, the ITES-BPO industry is growing at over 50 percent.

India 's quality initiatives : achieving maturity

According to the more recent annual NASSCOM study on the Indian IT industry, Strategic Review 2004, the following factors define the quality environment existing across the ITES-BPO sector :

- Indian ITES-BPO companies are on a ascending curve when it comes to quality.
- While organizations that have certified to the ISE 9000 family are migrating to the new ISO 9000:2000 standards, organizations assessed on the CMM framework are aligning their QMS to the new CMMI framework.
- Organizations working "end-to-end" quality are continuing to invest and upgrade their CRM and ERP initiatives.

Many leading Indian ITES-BPO companies have received recognized quality certifications such as the COPC.

India 's quality edge

The ITES-BPO sector's focused attention on quality has enabled it to offer the following advantages to outsourcing customer organizations :

- Access to highly skilled personnel, who are even more qualified than personnel working for shared services centers in the existing parent location
- Access to service facilities by all divisions of a company (in the case of in-house providers) and across different companies (in the case of third party providers), facilitating the transfer of best practices across all of them
- Dramatic improvements in process quality and productivity compared to those in the parent location

Continuous quality and productivity improvements-a year-on-year improvement in the process metrics