BPO deals from Japan are seeing good traction

Business process outsourcing (BPO) firms in the country are seeing increasing demand for their services from large automotive and engineering firms in Japan.
The Japanese BPO market is estimated to be worth $100 billion.

Hitherto, Japanese firms were seen by information technology and BPO service providers as orthodox and difficult to crack, due mainly to cultural issues. But things appear to have changed somewhat following the market downturn.

“We are seeing massive interest from Japanese firms in the automotive, high technology and banking sectors to reduce cost of operations by outsourcing business processes. They are now opening up in a big way,” Pradip Mukherjee, India head of BPO consulting firm Avassant told DNA Money.

And cost reduction isn’t the only driver. Japanese firms are also seeking near-shore support in various geographic locations where their operations are spread.
“The Japanese firms have begun to shed their centralised approach towards business,” Mukherjee said.

According to him, Avassant is currently engaged in structuring at least three big BPO deals involving some Japanese automakers and BPO firms in India. “All the major BPO players, like Genpact, IBM, Accenture and WNS, are already talking to Japanese firms. IT service firms with BPO capabilities such as Infosys BPO, TCS BPO, Wipro BPO and others are also in the fray, but the pure play BPO firms seem to be very aggressive currently,” Mukherjee added.

Anurag Mehrotra, chief marketing officer of Mumbai based BPO firm WNS, confirmed the growing interest from Japanese firms. “Discussions are going on with about three firms currently. We have thus set up a separate sales team for the APAC region that will cater to Japan, Australia, New Zealand, Middle East and other areas. The firms that we are talking to in Japan are from logistics, shipping, high-tech, entertainment sectors,” he said.

While he did not reveal the size of the deals WNS is pursuing with Japanese clients, Mehrotra did concede that “the deal sizes are similar to those we normally get in US and UK.”  Still, these may be early days for outsourcing from Japan.
“Apart from merger and acquisition related work, our firm has not seen much of a traction from Japan,” said Raman Roy, founder of New Delhi based Quatrro.