Sunday, July 09, 2006

Maturing of the Indian BPO industry

The last 5 years have all been gung ho stories of how companies in the US & Europe and shifting their back office operations to India. Movies have been made on the subject and Westen legislators have even tried to pass bills blocking offshoring to India. All the while Indians have had a glow on their faces about how India has arrived and how they are going to win all the jobs from the West.

Now comes the reality check, with three hi-profile BPOS shutting shop in India: PowerGen UK, Apple Computer, and Belair UK. There have also been stories of how some UK banks have been advertising that they take their calls "at home" and have won customers as a result.

These are all signs that BPO activity in India is maturing. Like every story there are two sides to it and the second side is now emerging. Naturally offshoring to India is not for everyone; and India is a 3rd world country with massive red tape problems and infrastructure shortages. The BPO story that was built on the backs of massive undersea communication cables and India's large English speaking population, is now running into India's legendary red tape and infrastructure shortage reality.

So, its not going to be all gung ho stories from now. Good. Better to have a real picture than a rosy one. It'll stop Western companies from foolishly rushing into India and they'll now take a more serious calculated approach, by doing a better study and deputing better managers.

Will BPO growth stall? Does water ever not find its own level? As long as there are cost efficiencies to be achieved, companies in the West will continue to offshore to India. Then will come a time, when due to sheer practice, like in software, Indian companies will posses competencies ahead of their Western counterparts and will become essential to offshoring.

Further, all parts of the BPO industry are now maturing, from the attitude of workers to the attitude of the government and the infrastructure requirements. BPO outfits too are maturing. Going are the <500>

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