BPO India: The Offshore Outsourcing Industry

The BPO industry was, initially, firmly in the domain of major multinationals. While the savings were there, the set-up costs of establishing a facility, recruiting staff, and providing ongoing supervision and management meant the option was out of the reach of many businesses
Offshore Business Process Outsourcing (BPO) got its start in India.
Offshore Business Process Outsourcing (BPO) got its start in India.
Published on Dec 28, 2021 06:45 PM IST
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ByHT Brand Studio

Offshore Business Process Outsourcing (BPO) got its start in India. In the beginning, it was largely done as an in-house process. Although a function like customer service might be outsourced to an Indian call centre, the ownership and management of the function remained the same as the parent company. However, it showed how BPO to India could work for the first time. Although there were hiccups, some call centres were the source of communication complaints; they proved that it was possible to successfully offshore an entire service and make significant savings, largely through reductions in the wage bill.

The industry was, initially, firmly in the domain of major multinationals. While the savings were there, the set-up costs of establishing a facility, recruiting staff, and providing ongoing supervision and management meant the option was out of the reach of many businesses. “In the early days of offshore BPO giants like GE and AmEx led the way,” says Ralf Ellspermann, CEO of PITON-Global, an award-winning mid-sized BPO provider. However, it was not long before local entrepreneurs had seen the opportunity. With experienced staff, at all levels, from the captive (in-house) BPO operations, third-party outsourcing providers emerged. It opened the possibilities of BPO in India to another group of businesses, those major multinational and national businesses that were not large enough to establish their own offshore operation. “Now they, too, could outsource things like customer service, leaving them free to focus on their core business. However, this also opened the floodgates. With outsourcing now offered as a practical solution for almost every business, plenty of other countries realised their economy could also benefit from providing offshore BPO services,” says Ellspermann. 

This next phase has been marked by the outsourcing sector maturing. The sector is now open to almost anyone, no longer the province of just a few providers and early innovators. With experienced workers available, and plenty of jurisdictions keen to see the benefits that come from investment in the sector, there are few barriers to entry for new BPOs. The result has been increased competition for providers and increased choice for clients who are no longer restricted to BPO in India. It has arguably resulted in better services for everyone; operators have to keep prices competitive but must also ensure their services stand out.

There are now several countries that have a significant BPO sector. “Perhaps the best example is the Philippines. The BPO industry there grew from almost nothing to the world's second largest within just 20 years. The country has a high level of English fluency, excellent education standards, and strong cultural links with the US, allowing Filipino call agents to converse easily and build rapport,” explains Ellspermann. It means that while India has continued to dominate in areas like ITO and KPO, more companies now choose the Philippines for their call centre and back-office outsourcing requirements. India may have created the modern outsourcing industry and dominated it for many decades. Still, BPO to India is no longer the only option open to businesses from around the world.

 

Disclaimer: This is a company press release. No HT journalist is involved in creation of this content.

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Saturday, January 22, 2022