Revenue from BPO to touch $1.6bn in '14

India's domestic business process outsourcing services segment is expected to achieve a revenue of $1.6 billion by 2014 from $521 million in 2009, according to research firm Gartner.

Gartner has forecast that revenue from BPO services within the domestic market will grow by 31.1 per cent from $521 million in 2009 to reach $683 million in 2010 and experience steady growth through 2014 to touch $1.6 billion by 2014.

"High economic growth, competitive pressure, agility, time to market, innovation and adoption across verticals and breadth of services will be driving this high growth rate in this segment," a Gartner report said.

Large scale outsourcing of process management will bring in the next wave of growth in the Indian domestic IT/IT-enabled services industry.

"IT services spending will continue to shift from discrete spending to outsourcing in 2010.

"New avenues of growth will open in the mid-market and in up-selling," Gartner Senior Research Analyst Arup Roy said.

"The entry of new hybrid providers will blur the lines between product and IT services and the new offerings will be on a pay-per-use model," he added.

While BPO services are at present largely restricted to the telecommunications and banking and financial services sectors, going ahead, it is likely to be adopted in verticals such as government, utilities, healthcare and retail, the Gartner report said.

"These are high growth verticals with a high degree of transaction processing work requirement.

"Such transactional processes, although crucial, are not core to the activities of those organisations. Hence, outsourcing of such processes to third party specialists would bring in advantages of efficiency, efficacy and cost, thereby increasing the competitive edge," it added.

Roy said the Indian domestic market is still heavily dominated by voice-based services.

"Most of the BPO work is around contact centre type of work catering to customer care and sales/marketing services. This would comprise almost 65-70 per cent of the market," he said.

"This is likely to expand into other service lines such as HR process outsourcing, finance and accounting, analytics and other niche services," Roy added.

"BPO is in the emerging stages. As adoption increases, and it becomes adolescent, the provider landscape would also change with much larger, sophisticated and specialist providers playing in the space.

"This would further drive the expansion of the service lines within BPO," Roy said.