'Indian BPOs must move on higher value services'
By agencies   |   Tuesday, 04 April 2006, 19:30 IST
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NEW DELHI: Offshore Indian BPO players must expand their geographic presence not only to match the footprint of large enterprise customers but also to leverage emerging low-cost locations themselves, says a latest Forrester report. The Forrester Research study titled ‘Offshore India BPO leaders emerge’ says, “A host of alternate geographies are emerging — including Romania, Panama, and Vietnam in addition to the oft-cited example of China. But sizeable, reputable providers based in these geographies remain few. The threat posed by these geographies, rather, is that other global outsourcers will harness these geographies more rapidly and effectively.” Many customers require services delivered at least in part from their domestic geography — something many offshore Indian BPO players still do not offer. Although the offshore Indian BPO firms are expanding their geographic presence rapidly, they still lag the multinationals in their reach and therefore are not yet a perfect match for very large customers. "But these offshore firms are emerging as a good fit for the next highest rung of the large enterprise segment and the larger end of the mid-market," Forrester said. Taking stock of the BPO market, the study noted that the Indian offshore industry continued its impressive growth despite a change in its principal emphasis from voice-based, contact center solutions, to transaction-based and knowledge-based services. Cautioning that offshore model using only labor arbitrage value proposition would cease to be viable in the next 18-24 months, Forrester said that India’s players were therefore redefining themselves to pursue broader global reach, higher-value services, and platform-based solutions. The report said that offshore BPO players must ultimately become known more for their process and technology expertise than for their labor arbitrage. “In doing so, they will outgrow the very thing that made them attractive in the first place. But increasing buyer sophistication means providers must learn to say no to low-value transactional services such as data entry and commodity voice services — a temptation few existing players can yet resist — unless higher value services are attached,” it pointed out.

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