Indians seem to want foreigners to validate business models for them before they take the plunge and soon take things over.

It happened in the IT industry and now, it is happening in the information technology enabled services and business process outsourcing sector.

That it is working, even in voice-based BPO, is demonstration that Indian talent has been up to the task, even if the businesses are still largely run by multinational firms.

Outsourcing and India: Complete Coverage

Even mainland Europe, culturally diverse and "less sophisticated at global outsourcing," as one Nasscom official put it, is on the radar.

A Gartner analyst joked, "Italians are quite similar to you... they honk their horns a lot, they make the same gestures for a drink...," at a session on "operational excellence" at the Nasscom ITES-BPO Strategy Summit in Bangalore on Wednesday.

American Express and later General Electric may have started the trend, setting up "captive" centres in India, but Indian firms have followed suit. On Wednesday, Nasscom announced the top 15 "third party" (non-captive) ITES companies for fiscal 2005.

While the list is topped by WNS, started by British Airways and acquired by investment bank Warburg Pincus, the rest of the list comprises several owned-and-run-by-Indians firms.

WNS is "closely followed" by Wipro [Get Quote] BPO, and in third place, based on a survey the industry lobby conducts annually, is taken by HCL Technologies [Get Quote].

The numbers say two things: First, the multinational firms, with their early starters' advantage, dominate the industry in terms of sales from India: Of the $5.2 billion in ITES-BPO exports in fiscal 2005, Nasscom says 65 per cent was from "captive units".

Sunil Mehta, a vice president at Nasscom, says staffing will also roughly reflect this ratio: Of the 3,48,000 ITES BPO employees in the country, two-thirds work for the "captive" units of multinational firms.

Firms such as Accenture, with global reach and deep pockets, not so long ago set up large BPO operations in India that scaled up rapidly and still continue to grow.

Their call centres are rated high by COPC, increasingly the de facto BPO standards setter and certifier, and they are "pushing the envelope" of what BPO can be offshored to India or other low cost high talent locations, including China.

Second, that this is possible is clear evidence of the ability of Indian graduates to adapt to what is needed and do a good job of it. COPC or Contact Operations Performance Centre Inc, found Indian BPO units have "fatal errors" of 2 per cent. That, says, COPC's chairman, Cliff Moore, is "international standard". However, the talent pool will be challenged, with the increasing need for scale.

Romola Nath, a vice president at Next, whose 160 trainers train call centre staff on everything from accent to cultural nuances, says there is a problem. "For every 100 candidates that apply to call centres, only three make it. Through training, we want to at least take it to six."

Independent Indian BPO firms, earned some $1.82 billion in the year to March 2005.

While much of the BPO exports, in India, will still come from captive units, every Indian BPO firm on Nasscom's top 15 has improved its position on that list. The list is put together partly from revenues reported to the Software Technology Parks of India.

The Indian firms are also increasing their engagement with Western Europe. Cathy Tornborh, a principal analyst at market researcher Gartner, says the BPO arms of firms such as TCS [Get Quote], Infosys [Get Quote], Wipro and HCL Technologies all have contracts from Europe.

These contracts contribute a significant portion of their BPO revenues. For instance, in the year to March 2005, Wipro BPO earned 8 per cent of its revenues from European clients.

Wipro BPO has for clients, a large life insurer, a telecom company, a retailer and a credit card company, Tornbohm says. TCS does work for European clients including Austrian Air and Swiss Air.

Infosys' Progeon does work for large banks, and British Telecom, as does HCL Technologies. Intelenet, another Indian BPO firm that moved up in Nasscom's ranking to seventh position, works for the UK's National Rail Enquiry, British Midland Airline and a European retailer.

Gartner forecast, in 2003, the BPO market in Western Europe was worth over $33 billion for fiscal 2005. It would grow at a compounded annual rate of 8.8 per cent.