INDIA
BPO services in India began to accelerate rapidly. Since then, India has become a powerhouse in the offshore ITES and BPO industry
BPO in India first began to take shape in the late 1980s. However, it wasn't until a few years later, in the wake of the country's economic liberalization plan, that IT and BPO services in India began to accelerate rapidly. Since then, India has become a powerhouse in the offshore ITES and BPO industry. The country's enormous pool of labour, extremely talented workforce and low costs are some of the factors driving this continued growth. The BPO sector in India is now a US$47.5 billion industry, and it is expected to grow at a compound annual growth rate (CAGR) of over 10%. "India currently accounts for nearly 60% of the global offshoring market for BPO services. In terms of jobs, the BPO sector employs nearly 4 million people in India - and this number is only expected to grow in the years ahead," says Ralf Ellspermann, CEO of PITON-Global, an award-winning BPO provider.
An important component to the success of India's BPO industry is the country's vast labour pool. India has a population of over 1.3 billion people, making it the second-most populous country in the world. This large population enables India to draw from an immense labour pool for its BPO sector. The country also has a very young population, with nearly 65% of the population below the age of 35. This youthful population is important for the growth of BPO in India, as companies look to hire workers with the latest skills and technology. "Related to this is the fact that India's BPO workforce is so highly skilled. As a leader in the global IT outsourcing sector, India has a very large number of engineers and other technical professionals. This has given the country an edge over other offshore destinations in the important BPO and KPO sectors," says Ellspermann.
Over the last twenty years, the cost of utilising an offshore workforce has fallen significantly. Insofar that India's labour is concerned, the country has always been one of the most cost-efficient destinations for outsourcing. As globalisation increased the popularity of offshore outsourcing, India became the preferred destination for IT and BPO services due in part to its affordability. Costs for BPO services in India are still significantly lower than those in developed countries. In fact, the cost savings for companies that outsource to India are estimated to be as high as 60%. India's large pool of available labour has helped contribute to its cost advantages, but so too has the ongoing improvements in technology and infrastructure within the country. As a result, BPO in India has maintained a competitive advantage over many other outsourcing providers across the globe, and especially within Asia itself.
BPO in India over the last two decades has truly been a success story. The country has positioned itself as a global leader in the IT and BPO industries. With that being said, it is not a time for the country to rest on its laurels. There are challenges that India must navigate to maintain its position as a go-to offshore outsourcing destination. One of the most conspicuous of these is the rise of the Philippines as a legitimate outsourcing destination. Despite India's early start and clear dominance in the IT and BPO sectors, the Philippines has experienced its own impressive growth in the last two decades.
The country has become the world's largest and leading call centre outsourcing destination. "The Philippines' dominance in voice-related BPO services has been the result of a few factors. These include a close cultural affinity with the US (itself the world's largest buyer of BPO services), an extremely high rate of American-English proficiency, and the country's familiarity with US business practices. India still maintains a clear advantage in terms of being the world's largest and leading offshore IT and BPO destination. Still, it would do well to understand some of its competitor's advantages, to remain a global leader in the offshore BPO industry," explains Ellspermann.
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