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Looking at a challenging future

India’s English-speaking talent is bagging work from countries like US, the European Union, Australia and New Zealand, not really for cost reason but for value, reports Rahat Bano. Business buzz | 'US recession will not hurt outsourcing'
Hindustan Times | By Rahat Bano, New Delhi
UPDATED ON MAY 12, 2008 10:28 PM IST

Brainy professionals in India are scooping up opportunities from western countries looking for cheaper, quicker as well as quality services.

These knowledge professionals not just do consulting but execution as well. The carrots in the game include working with technology, multi-cultural exposure and, getting to learn.

And, if you are a copy editor or project manager in a content management division, how about seeing your name in a US author’s acknowledgment of your role in materialising his book?

Clubbed under the so-called knowledge process outsourcing/offshoring umbrella, this infantile sector is growing at 30-40 per cent a year, according to Evalueserve, which minted the term KPO in 2003.

It makes for a “pretty” picture.

Says Alok Aggarwal, Chairman and Co-founder Evalueserve, in a telephone interview from California, “India’s getting 75-80 per cent of knowledge services being offshored. By March 2008, India should do a US$4.2 to 4.4 billion worth of work.”

Evaluserve estimates India’s 310 KPO companies – including standalone and captive ones -- employed around 75,000 professionals in 2006. Today there are about 110,000, says Aggarwal, who expects 120,000-125,000 by March 2008.

India’s English-speaking talent is bagging work from countries like the US, the European Union, Australia and New Zealand, “not really for cost reason but for value,” asserts Rajinder Singh, Senior Vice President and Head, Global Analytics Services, Genpact, who says the KPO label doesn’t define it fully and would rather call it value-creation services.

For example, a US publisher can offshore the publishing of a book to a content management solutions company here which supplements the hard copy with an e-book and a website on it as well. Adds Gurvinder Batra, Chief Technologist and President-Publishing, Aptara, New Delhi, “Getting this done in the US is difficult. It’s costlier.

The main gain for publishers is time to market. Those people don’t have (requisite) IT skills. The other reason is English language,” he elaborates. “This is the best time to be in this sphere because you get to learn so much, work with authors from all over the world.”

But rising wages and a high attrition rate is clouding the sunny horizon. Entry-level employees spend about 2.5 years in a job leading to an attrition rate of 20-30 per cent, says Aggarwal. “It hurts the company. It hurts the employee as well in the long run.”

In 2003, Evalueserve projected the global KPO sector worth US$17 billion and India’s worth US$11-12 billion by 2010-11. Aggarwal says, “This number (US$11.9 billion) to be US$9-10 billion.”

The sector's looking at a challenging future.

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