'Indian outsourcing firms moving up value chain'

New Delhi: Indian business process outsourcing (BPO) companies are moving up the value chain with an increase in the share of high-end judgement-based work, says a study prepared by leading global information services firm Dun and Bradstreet (D&B).

The fourth edition of D&B's annual study of Indian BPO companies, titled "India's Top ITeS and BPO Companies 2008", was released here Tuesday.

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The study is based on a survey covering 440,000 employees of 177 companies, or 63 percent of the Indian BPO sector's total employee base of around 700,000.

"In comparison to last year's study, conventional BPO services have lost their share by almost 10 percent whereas emerging service lines such as knowledge process outsourcing, legal process outsourcing, engineering process outsourcing and e-Learning have increased their share considerably," the study said.

"In terms of services offered, traditional BPO services continue to be the most popular service line, with a share of 53.9 percent in the total range of services offered pie."

These services include customer care, data capture and management, contact centre, document management, medical transcription, claim processing and technical support.

However, the study said: "Of late outsourcing firms have begun to look at the higher end of outsourcing spectrum."

"Faced with increasing competition and constant margin pressures, judgement-based work (broadly categorised as higher-end and value-added work) provide outsourcing firms the opportunity to offer services at much higher price points," it added.

"Firms are now concentrating on this end of the spectrum as well."

The study found IBM Daksh Business Process Services as the largest BPO firm in India in terms of employment with 29,865 employees, followed by Genpact with a workforce of 25,366, and Intelenet Global with 25,300.

The study found that although the economic slowdown in North America and Europe will have some impact on the Indian BPO sector, most companies believe outsourcing and offshoring are more likely to become an alternate means for survival as they focus on cost rationalisation.

"This would pave the way for long-term growth for the BPO industry," said D&B India's chief operating officer Kaushal Sampat, leader of the research team that prepared the study.

The study also found that a high proportion of companies - as much as 45.7 percent - expect revenues for the BPO sector to grow by 20-35 percent annually as compared to a growth of 31.6 percent in fiscal 2007-08 year-on-year.
Source: IANS