BPOs dial local numbers as West faces trouble

With their mainstay international markets in shambles, domestic business process outsourcing, or BPO, firms are focusing on servicing clients within India where new opportunities such as from the government are coming up.

“We see domestic clients as an engine for growth,” said Sanjay Venkatraman, executive VP & head of Asia business unit for Firstsource.

This is a far cry from the time when the industry used to cater to clients mainly in the US.

Susir Kumar, CEO, Intelenet Global Services, said growing demand for goods and rising income levels have led to the growth in the domestic sector.

“As the consumer market in smaller cities increases, we see a great potential of growth in the domestic language segment that is bound to surpass the requirement for people who have a command over English.”

The domestic market is also seeing a strong demand from sectors such as banking, insurance, telecom, financial services, retail and infrastructure, said Vilas Kanyal, senior VP & head, business development, India, at MphasiS, where 30% of employees cater to local clients.

The government and public sector units are also providing firms with new opportunities. Experts say with the government rolling out the Adhaar scheme, there will be more direct government to citizen (G2C) initiatives, which will open up more opportunities for the BPOs.

“Various government services and departments such as income tax, passport, railways, municipalities, electricity, post and telegraph have started outsourcing,” said Anantha Radhakrishnan, vice-president and head - business transformation services, Infosys BPO.

Thus BPOs have started operating in 15-17 vernacular languages apart from Hindi and English to service local customers.

Kris Lakshmikanth, co-founder and CEO, HeadHunters India, a Bangalore-based executive search firm said domestic clients are like a risk mitigation strategy to cushion against the impact of any turmoil seen in the international markets.

“There is some security net which local clients, especially government services, offer BPOs when the western economies are facing challenges. However, the currency advantage which the US dollar or euro gives against the Indian rupee cannot be compensated by just focusing on India,” said a BPO sector veteran.

Radhakrishnan said though India is a key market, about 70-75% of revenues still flow from the US and EU.

For Intelenet and Firstsource, about 25% and 12% of revenues, respectively come from the domestic segment.

Intelenet has about 26,000 employees servicing domestic clients, while Firstsource has 15,000. On the other hand, Aegis has 25,000 catering to local clients, while Infosys BPO has over 500.

All players are planning to increase headcount.

“In the last six months itself we added over 2,800 employees to cater to our domestic clients,” says Venkatraman. Infosys BPO is looking at growing its headcount 3-4 times in the next few years.