India’s BPM Industry To Clock 21% Growth By 2020

by CXOtoday News Desk    Apr 18, 2016


The Business Process Management (BPM) industry in India has witnessed unprecedented growth over the years and now it is heading towards high end services and global competitiveness. According to the latest report of NASSCOM, the domestic BPM market is expected to grow at a compound annual growth rate of 21 percent over the next five years to worth Rs 50,000 crore.

The ‘Domestic BPM Market 2016″ report states that the third party BPM providers would generate over three lakhs additional job opportunities as tier-III and tier-IV cities would emerged as the new market places for third party BPM service providers. NASSCOM, however, emphasized on the need for greater involvement and support from the government. “We believe that the government can play a crucial role in unlocking the true potential of the domestic BPM market over the next five years,” Economic Times report said while quoting the survey report. 

According to the latest market research report published on ResearchMoz, the global business process management (BPM) as a service market is expected to grow at a CAGR of 37.18 percent during the period from 2015 to 2019. According to the report, titled “Global Business Process Management (BPM) as a Service Market 2015-2019,” the global BPM as a service market has been segmented on the basis of geographical distribution. According to the report, America, APAC, and EMEA are the key regions of the global BPM as a service market with the U.S., U.K., and Germany expected to be the leading countries in the market during the period from 2015 to 2019.

India has been widely considered as the key marketplace for its global BPM industry and the country will continue to be the leader of this space. The largest sectors serviced by the BPM industry last fiscal were BFSI and telecom, each constituting approximately 35 percent of the revenue, while travel and leisure constituted around10 percent, retail 6 percent, and government 5 percent respectively. At present, the top 15 BPM players account for around 80 percent of the total domestic third-party BPM market, and one fourth of the domestic BPM market is serviced by third party BPM companies, the ET report stated. 

Though growing at a fast pace, domestic BPM industry faces certain challenges that create barriers in the growth of the industry. The report noted that knowledge process outsourcing was still not happening much as it requires premium skills that require skilled talent, and hence expensive workforce which come at a premium price that domestic buyers are not willing to pay, at least in the short term.

It is to be noted that government in its Economic Survey published recently, had noted that increasing protectionism was adversely harming the growth of the domestic BPM industry. According to the report tabled in Parliament by Finance Minister Arun Jaitley, increased protectionism has resulted in barriers to free movement of skill and data.”The IT-BPM sector is increasingly being challenged in its global journey… misconstruing mobility of skilled people as an immigration issue is a deterrent to the growth of this global business,” the survey said. 

The Indian BPM industry has come a long way in the last decade. Leveraging on business prospects, several Indian BPM organizations have already entered this space and are offering these higher end services to global clients. However, these efforts require additional push from the government. According to the NASSCOM report, the government has a key role to play in the expansion of the BPM sector into smaller cities. Infrastructure development, skill development, building policy frameworks to encourage employment and better infrastructure, and also help build confidence in the sector through awareness campaigns and setting up State level BPOs are the key priorities of the government to boost the industry growth, the report said.