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Is the BPO Era Over...?
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Is the BPO Era Over...? - June 15th, 2008

 Indian BPO players are looking to expand services and increase penetration in select verticals
In the early years, Indian BPO vendors targeted simple BPO processes as an entry strategy. In the recent past, these vendors have matured to an extent and offer a wider range of services (e.g. claims processing, accounting) across verticals such as BFSI, Technology, Healthcare, Telecom, Retailing and Internet.

 BPO is part of the larger IT Outsourcing wave
Offshore BPO and IT services share several common characteristics and similar evolutionary paths. BPO is the next logical step in the overall IT Outsourcing trend.

 BPO has significant wealth creation potential
The current market capitalisation of IT services companies in India is about USD 15b. BPO will be the next wealth creation engine for investors and estimate BPO related market capitalisation will reach to USD 27b by 2008.

 Non-voice BPO yet to be fully established – traction expected in future
A variety of reasons such as apprehensions of clients, long sales cycles and lack of adequate track-record or process expertise have led to non-voice BPO scaling slower than expected. However, Finance & Accounting and Transaction Processing are now witnessing business traction and these segments are going to scale up in the future.

 BPO business models of various players expected to converge to a model with end-to-end services with global service delivery
Currently, the services’ mix and business models of various BPO players are quite distinct. Going forward, there will be an emergence of a class of players providing end-to-end offerings (e.g. IT, CRM, BPO & Consulting services) to targeted verticals based on a global delivery model.

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