The Future of Indian BPO companies-2012 and Beyond

January 2, 2012

Since 2010, Indian BPO companies are in a buying spree. The value of BPO mergers and acquisitions might exceed several billion dollars. The main reason behind BPO industry consolidation is due to the change in customer demand and their business requirements.

The cost arbitrage days are gone for Indian BPO companies; they no longer can win the contract simply by under-bidding their competitors. Following are some the capabilities customers are looking from their BPO vendors:

Unified ITO & BPO Solutions
In this ever changing and hyper-competitive globalized world, companies need both IT and business process solutions to keep their websites up and running 24×7. These customers view their IT and business processes as single intertwined systems that needs to serve their customers all over the world.They expect their BPO vendors to support their IT systems as well. So pure-play BPO vendors cannot bid those projects, as their capabilities are only in BPO.

Managing Business Process Value Chain

Customers are managing their end-to-end business process that spans several time zones and countries. Now multinational companies (MNCs) have manufacturing divisions in China, US, and in other countries. Their customers are located all over the world. They can buy either by visiting their physical store or simply through their website. Now MNCs need their BPO vendors to understand their entire business process value chain and offer localized, country-specific solutions. Small and midsized Indian BPO vendors (vendors with a revenue of less than $100 million) cannot even bid these BPO projects.

Innovative BPO Solutions
Companies are not looking for simple BPO solutions in contract. They are interested in innovative business process solutions that gives them an edge over their competitors. For example, customers interested in financial and accounting outsourcing are not interested in plain “vanilla” solutions like bookkeeping, account receivables, and account payable. In contrast, they are interested in solutions that will reduce their billing cycle, dynamic pricing, and globalized view of their financial and accounting data. Only niche BPO companies like Genpact can play in this market.

Platform-Based BPO
In this cloud computing era, customers are interested in SaaS solutions in which they use their supplier’s infrastructure to get utility based services in accounting, HR, procurement, and business analytics. Only big Indian outsource companies like TCS can offer these type of solutions.

Location-Based BPO Solution
In this globalized world, all the Fortune 500 and midsized companies have research labs, warehouses, data centers, and retail centers located all over the world. They also have employees, vendors, and partners working with the companies on various engagements throughout the world. Companies are looking for an integrated but localized BPO solutions to support their global entities. Only Indian Companies those who have offices in multiple countries can take advantage of their localized presence to win these BPO projects.

Global economy is still recovering in 2012, with current dept crisis in Europe and US election in 2012 will create tough-time for Indian BPO companies to win new BPO contracts. But by understanding the customer’s BPO needs, having a sound marketing strategies and having a good globalized BPO delivery capabilities, Indian BPO companies can still win new BPO projects.


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