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BPO industry revenues to touch $12.2 B by 2006
Wednesday, 02 June 2004, 19:30 IST
NEW DELHI: India's money-spinning business process outsourcing (BPO) industry is likely to touch revenues to the tune of a whopping $12.2 billion by 2006 up from $2.4 billion logged in fiscal 2002-03, said a study Tuesday.
According to the study conducted by the Associated Chambers of Commerce and Industry of India (Assocham) and International Data Corp (IDC), the BPO industry has been growing at a fast pace of almost 60-70 percent annually.
"The revenues from the Indian BPO industry have grown from around $565 million in 1999-2000 to almost $2.4 billion in 2002-03," said the report.
"The future projections also look promising and it is expected that the revenues would increase to $12.2 billion by 2006," it said, adding outsourcing to India will rise primarily due to cost savings concerns to the extent of 40-60 percent.
The report said the manpower strength in the BPO industry in the last five years had already surpassed 100,000 and the sector would employ well over a million people in a little over five years.
"India should set a target to raise its market share of the global BPO business from the current two percent to 4.8 percent by 2008. By then Indian export earnings from BPO will likely reach an annual $21 billion to $24 billion."
India has emerged as the preferred destination in the global BPO space. Over 60 percent of Fortune 1000 corporations either already outsource to India or are planning to do so in the near future.
"Cost saving was the primary reason for initial outsourcing, however quality, productivity and efficiency have become equally important parameters for clients to outsource and expand their operations in India," said the study report.
"On this issue there is a definite need for India Inc to move up the value chain," it said, adding the prevailing volume and price pressure in BPO industry has to give way to discovering niches and processes in which companies can excel.
Source: IANS
Source: IANS