Outsourcing business to India is witnessing a transition with rising numbers of knowledge process units being set up. Seen as a move to climb up the value chain, outfits in India have begun to exploit the opportunity gaps in the market place and provide end-to-end consulting and research-oriented services.
From B to K
"When we started five years ago. We had to differentiate from ourselves from the BPOs and had to explain that a 100 seater didn't mean expert services. It was a challenge to explain to clients that high value services could come from India.
Today, there is a dramatic change in attitudes," says Ashish Gupta, Country Head and COO, Evalueserve. The GlobalSourcingNow report seconds the statement. According to the report the Global Knowledge Process Outsourcing industry (KPO) is expected to reach $17 billion by 2010, $12 billion of which would be outsourced to India.
It also estimates the Indian KPO sector to employ more than 250,000 KPO professionals by 2010, compared with the current figure of 25,000 employees. Raju Panjwani, Managing Director and CEO, Epitome Global Services.
Cost effective
KPO services can enable enterprises to reduce the design-to-market lead times; manage critical hardware efficiently; provide research on markets, competition, products and services; enhance organisational effectiveness in business administration; and help in dealing with rapidly evolving business scenarios. Finally, the value proposition for a KPO lies in providing its clients customised and value-based solutions.
{{/usCountry}}KPO services can enable enterprises to reduce the design-to-market lead times; manage critical hardware efficiently; provide research on markets, competition, products and services; enhance organisational effectiveness in business administration; and help in dealing with rapidly evolving business scenarios. Finally, the value proposition for a KPO lies in providing its clients customised and value-based solutions.
{{/usCountry}}A reduction in telecom costs, coupled with the increased digitisation of services, is helping many companies to off shore their services. Cost savings from off shoring even a portion of the patent drafting process can easily save up to 50 per cent of the cost for the end client.
According to a report by Evalueserve, a specialised global research company that offers business, financial and intellectual property research, a firm, by outsourcing its job to India, can benefit in terms of 40 to 70 per cent cost reduction. This saving in costs leads to 'value creation' for the 'clients' of KPO firms.
Money talks
The pay package can range anywhere from Rs. 7.5 to Rs. 15 lakhs per annum. Apart from the monetary package, there is a chance to work with global financial giants such as JP Morgan, Morgan Stanley, Reuters or a Merrill Lynch. According to Panjwani, "Even the research that would be expected from them would be high end data crunching and data support to hedge firm using research as a technical tool and not just a technical service."
Future trends
"We predict that India will capture more than 70 per cent of the KPO sector by 2010," adds Gupta. Apart from India, countries such as Russia, China, the Czech Republic, Ireland, and Israel are also expected to join the KPO industry.
The KPO tide is also expected to have spillover effects on the traditional BPO outfits. Sanjay Kamlani, co-founder and Co-CEO, Pangea3 says, "Transaction processing companies are moving into general research and drafting reports. Since, better margins are expected at the higher end of the value chain, the KPO shift might even act as a deterrent for companies in accepting low-end work."
There are however a few disadvantages as well. The low-brand and low-quality image of lower-wage countries still persists and there is a need for creating a good professional environment. Infrastructure problems (e.g. acquiring land) still persist. Lastly, there is lack of good mid-level management and project management expertise.