Indian process management service market to grow by 31% in 2010

by CXOtoday Staff    Aug 18, 2010

In 2009, the Indian IT Services/business process outsourcing (BPO) market showed resilience with greater interest from corporate level executives in outsourcing decisions. Prioritization for outsourcing spending aligned with organizations’ agility, scalability and cost focus. Cautious buyers, cost containment were evident in mature verticals.

As a result, this year the India domestic process management services market is expected to reach $683 million, a 31.1 percent increase from 2009 revenue of $521 million, according to Gartner. The market will experience steady growth through 2014 when process management services revenue in India will reach $1.6 billion.

Large scale outsourcing of process management will bring in the next wave of growth in the Indian domestic IT/IT-enabled services (ITES) industry. High economic growth, competitive pressure, agility, time to market, innovation and adoption across verticals and breadth of services will be driving this high growth rate in this segment.

“IT services spending will continue to shift from discrete spending to outsourcing in 2010. New avenues of growth will open in the mid-market and in up-selling,” said Arup Roy, senior research analyst at Gartner. “The entry of new hybrid providers will blur the lines between product and IT services and offerings will move from traditional to utility, ‘as-a-service’ to cloud-based delivery models.”

Currently process management services are restricted largely to telecommunications and banking and financial services sectors. However moving forward it is likely to be adopted in verticals such as government, utilities, healthcare and retail. These are high growth verticals with high degree of transaction processing work requirement. Such transactional processes, although crucial, are not core to the activities of those organizations. There are high degrees of inefficiencies built into the system. Hence, outsourcing of such processes to third party specialists would bring in advantages of efficiency, efficacy and cost thereby increasing the competitive edge.

“From a service line perspective, India domestic market is still heavily dominated by voice-based services. Most of the BPO work is around contact center type of work catering to customer care and sales/marketing services. This would comprise almost 65-70 percent of the market, “said Roy. “However this is likely to expand into other service lines such as HR process outsourcing, finance and accounting, analytics and other niche services.”