Indian BPOs now spot onsite avenues in U.S.

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Indian BPOs now spot onsite avenues in U.S.
Mumbai: U.S. is still reeling under the impact of recession. Lower retail prices and cheap labour is attracting Indian back-office processing firms to expand their presence. The industry, which traditionally followed the offshoring model, is now looking to open facilities and hire locals in low-cost locations in the U.S.

IT services industry is now contemplating on whether to change their business model from offshore-revenue model to an onsite-offshore model. "We see the BPO industry changing. Based on the availability of skill and cost, about 15-20 percent of work will eventually be done in local geographies," said Sanjiv Kapur, Senior VP and Head of BPO at Patni Computer Systems, reports Economic Times.

Compared with the IT industry, which hires technology workers, BPO firms have more diverse manpower requirements. Knowledge of local regulations in a specific industry or process too would be handy here. Unemployment in the U.S. is around 10 percent now and this has ensured cheap and plenty of manpower, which in turn is helping the BPO firms.

"In the BPO context, about 95 percent of the work is done offshore and only 5 percent onshore. These firms have started thinking about nearshore and onshore delivery centres," said Arup Roy, a Senior Technology Analyst at research firm Gartner.

Opportunities such as those emerging from the U.S. Healthcare Bill may mandatorily require sensitive information pertaining to patient records to be within the country, and if BPO firms don't have onshore facilities, they could risk losing the business. Reasons such as these and concerns about job losses are guiding BPO providers decisions to start onshore facilities.

"Even if some revenue is high cost, it drives long-term growth. So it is okay," said Keshav Murugesh, CEO of WNS Global Services, while commenting about the potential impact onshore hiring would have on profit margins of BPO firms.

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