Competition demands global centers from Indian BPO firms
By siliconindia   |   Monday, 21 June 2010, 15:27 IST   |    1 Comments
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Competition demands global centers from Indian BPO firms
Bangalore: As value creation for customers take primacy over cost arbitrage, political pressures mount against offshoring and new offshoring destinations gain traction. Now the Indian BPO firms are tuning in to a global delivery model, reports Chiranjoy Sen & Srividya Iyer from The Economic Times. With newer rivals like Philippines snaring 70 percent of new contact center businesses and onshore BPOs in Brazil and other Latin American locations picking up steam, local vendors are being forced to set up global delivery centres, or look at near-shore options. Wipro BPO's Senior Vice-President Ashutosh Vaidya said that they have set up 15 overseas delivery centres and parked 3,000 people there to neutralise near-shoring by global outsourcing firms like Accenture and CapGemini. The latter, in fact, has a major hub in Guatemala City, which also houses delivery centers by Indian BPO firm 24X7 Customer. To boot, TCS Iberoamerica employs over 6,000 people in Latin America across eight centers spanning Colombia, Ecuador, Brazil, Argentina, Uruguay and Chile. "If you are going to be a significant player, you will have to have near-shore as well as offshore solutions," said Deepak Patel, CEO, Aditya Birla Minacs. "A notable development in 2010 has been the increasing focus on Indian IT majors strengthening their onshore footprint by setting up delivery centres in the U.S. Demand arises as a lot of work may not be completely offshorable, so it is good to have a delivery center in the U.S. The other factor is the proposed U.S. legislation around work permits and H1-B visas that may impact suppliers' offshore delivery mix," said Salil Dani, Senior Research Analyst, Everest Research Institute. The move to onshore or near-shore locations is gaining momentum because BPOs have graduated beyond the low-cost model, say industry honchos. "The next-generation business models are no more about cost, but value. Just because something is cheaper does not mean it has value," added Deepak Patel. Ashutosh Vaidya said that the firm is convincing clients to go for outcome-based business savings, not merely man-hour cost reductions.

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