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BPO market in India still very young, says Unctad

BS Economy Bureau in New Delhi

The business process outsourcing market in India is still in its infancy despite recent efforts to capture a greater share of the world market, according to the United Nations Conference on Trade and Development (Unctad) report on E-commerce and Development, 2002.

While the industry was projected to grow from about $300 billion to close to $1 trillion by 2007, the report says that Indian players should caution against excessive dependence on a single market (the US) and reduced margins once newer market entrants like China and Philippines join in the fray.

The report also points out that while India is building heavily on its already well-established software and IT-enabled service industries, the initial phase of such services was dominated by customer call centres and transaction intensive services like back-office operations, data processing, medical transcription, content development and administration that form the lower end of the value chain.

"Indian companies are planning to improve the quality of their BPO services by applying a new business framework created by Carnegie Mellon University. This eServices Capability Model employs best practices for measuring and improving the value of outsourcing relationships such as better productivity, reduced cycle time, decreased transaction costs and improved time to the market," the report says, lauding the reputation of Indian players in the global BPO market.

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