The business process outsourcing industry is commonly known as the outsourcing services industry in India. Multinational Corporations or MNCs choose outsourcing for various reasons including cost-effective factor, better services, quality, efficiency & productivity, shared risks, reduced operating costs, and more time to focus on core competencies.
From among the most favourable outsourcing destinations of global companies, India stands in the front due to all the above reasons coupled with its high-end technology and infrastructure.
Outsourcing services industry in India dates back to 1980s when British Airways started its back office operations in Delhi. With American Express bank starting its enterprise GE Capital International Services in 1990s, which later became Genpact, outsourcing industry never looked back in India. Soon the IT majors like Wipro, Infosys, HCL, Satyam etc. entered the sector and BPOs like Spectramind, Daksha, Progeon, Convergys came into being.
The size of global outsourcing market was USD 310 billion in 2008. In India, about 0.7 million people worked in outsourcing sector with annual revenues approximating $11 billion. The global recession, particularly American financial meltdown has affected India's IT and outsourcing business too and it is believed that the growth of India outsourcing sector will slow down a little in future. Both these sectors (IT and BPO) are extremely dependent on USA and if the US dollar depreciates, it can adversely affect the entire sector. Apart from this, countries like China, Mexico and Vietnam are also emerging as competitors of India by expanding outsourcing operations and often providing cheaper services than India. Keeping these challenges in mind, the Indian outsourcing industry today is focusing on value added services like standardization of security (such as data and IP security) along with cost effective quality services.
