The BPO Industry --Are we Ignoring Threat from China and India

The BPO Industry –
Are we ignoring the threat from China & other countries?

BPO stands for Business process out sourcing which is nothing but contracting out a business task to a service provider that is a third party. The parent company out source business on the basis of certain factors like, Cost of service, quality of end product. Once the business is out sourced the contracted company will be responsible for the results.
BPO industry is basically divided into two categories.
1] Back office--- Internal Business functions like, Billing.
2] Front office--- customer Related services like, Marketing, Tech support.

BPO industry is also called as ITES [Information Technology Enabled Services] as it is dependent of Information technology BPO includes the Software, The Process Management and the people to operate the service and it also means that a certain amount of risk is transferred to the company that is running business on behalf of the outsourcer.

The Main outsourcer is The United States of America and United Kingdom and the other countries are Canada and Australia. Now the question arises of why and where these countries out source. As in above mentioned lines these countries or the private companies from these countries look for the specific skill set such as The Process Management and the people to operate the service and their language skills.

Now the question comes in ones mind which are the countries with this specific skill set .
There are countries like India, China, Philippines etc.

India as a favored BPO Hub for the world:

India as largest populated country after china leads on certain frontier. Such as the largest of English Speaking human pool, Talented and creative and cheap skilled manpower.
As India has become a Information Technology super power in the world this skill has helped India to grab most of the business from the out sourcers since 1990. India also has good Intellectual Property laws and government is supporting in every possible manner.

China also has surged ahead to grab their pie of the cake but the minute difference between India and china is less percentage of English Speaking people the fact of the matter is china is leading in other frontiers on part of economic boom and product Manufacturing say engineered and IT products because of their Infrastructure .China also has a complex structure of laws because of which doing business here is a bit complex.

Some facts where India leads china.

In 2006 India was around $30billion where as china was standing at $12 billion. This is because of the talented Manpower which is around 30000 engineering graduates coming out of the colleges every year and IT professionals around 100000 per annum this talent has wide spread through out India and they are opening up their own BPO units and providing effective knowledge of BPO, India also has advance business skills in connection with western countries like America United Kingdom Latin America and Europe and China as well.

If we look at this facts certainly we can say that India is leading on BPO sector but we still needs to improve on our English speaking segment of society, More skilled graduates should come out of the institutes per annum . BPO is changing drastically to specialized knowledge based industry like KPO, PPO, RPO, LPO etc. China is preparing to improve on English capabilities and software skills look how they are preparing “The Chinese Government is Stressing on English Language learning as Beijing city is all set to host the 2008 Olympics this will create an impact on Business and IT sector globally and removing the language barrier will enable the Chinese companies to work in a wider range of markets and segment while English will become the preferred language of business. Said Dion Wiggnis, Vice president and Research director at Gartner.

The other countries;
The other countries like Canada and Mexico where near shoring can be done as companies don’t get cost saving here, companies only save 15% to 18% comparing to another countries where they can save up to 40%. Coming to Western Europe countries like Ireland and Scotland offer the same culture and can save cost up to 40% with skilled manpower at the same time claiming low property cost and attrition rate than in India. These countries are competing with India. Coming to Russia India might lose some share of IT business over next decade as it has a pool of engineers and scientist suitable for product development and testing. Coming to Eastern Europe countries like Romania Hungry Poland and Czech Republic offers close proximity to USA with low wages and English speaking pool but they can not go ahead as their wages are increasing and they have a small pool of talent. Now South East Asia consists of Malaysia, Singapore, Thigh land and Vietnam and Philippines, they offer English speaking talented work force but they have less labor work force.


Conclusion:
India should innovate newer ways to lower the cost and increase the quality of work.
India also has a largest pool of youngsters attending school in comparison with other countries where population is ageing. So ultimately India will be the final choice for outsourcer in a long run. Cheer India Cheer India Cheer India.


The Article is written by:
Pathan Mohammad Naveed Khan
[B.pharmacy and Bachelor of Journalism and Media Sciences]
For further information you can contact him at pathan_naveed@yahoo.com .
Call me at 00919890146190.