BPOs Tap Domestic Geographies to Expand
By Priyanka Akhouri
Mumbai, Jul 24, 2008

In India, the slowdown has presented the Indian BPOs an opportunity to tap new geographies and user segments within the country; diversifying risks and adding to growth and profitability.

According to Sanjay Mehta, CEO of MAIA Intelligence, "The ongoing rapid expansion of the IT and BPO industries beyond the five metros hinges on the timely creation of basic infrastructure in the tier II and tier III towns and cities of India."

The other areas where the companies are looking at saving costs include communication (IP Telephony, unified communication), energy (green solutions), recruitment and training processes, reducing Total Cost of Ownership (TCO), etc. This also includes travel and transportation costs where companies are looking at effective collaboration solutions including video, Web and audio.

The BPOs are also looking at the domestic market in recent years. Datamatics, a BPO company has invested in developing its own products and in creating reusable components in its solutions.

According to Brian Lobo, VP of Datamatics, "A more plausible reason is that the domestic user industry has matured to an extent where it can outsource non-core functions to external partners."

"Focusing on new cities or smaller towns to build delivery centers is one new trend that BPOs are looking for. Nashik for instance has most of what a BPO needs in terms of infrastructure and people, available at far lower rates than cities like Mumbai and Bangalore," said he.

The outsourcing companies are adopting new cutting costs formulas and techniques to fight competition. They are being extra flexible with pricing, delivery, besides taking a solution-centric approach, building domain expertise in new verticals, improving internal processes, etc.

Ritesh Jayswal, director, (industry solutions) at Avaya said, "IT companies will have to forge partnerships with their customers to create higher value proposition, directly impacting customer's business priorities.

B. Ramaswamy, president and MD of Sonata Software said, "Indian companies should now focus on providing high and differentiated offerings with strong business impact on their customers."

Springboard estimates the enterprise IT outsourcing is expected to increase by $7.2 billion by 2011. According to the latest NASSCOM figures, domestic IT spending on hardware and software had crossed $8.2 billion in 2006-07 and $11.6 billion in 2007-08. These reports and other reports show that India will continue to be "Outsourcing Capital" of the world.


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