Now, NASSCOM, the industry trade body, in association with Everest Group, a research and consultancy outfit, has predicted that the industry will grow to as much as $50 billion by 2012 and create around two million direct jobs in the country.
Despite these impressive statistics, Roy, now Chairman & Managing Director, Quatrro, a BPO start-up, is among the first to sound multiple notes of caution for this industry.
“This industry could be a game changer for India, but there are several hurdles we need to overcome,” he admits. These problems are spread across areas that range from a lack of employable talent to issues over taxation, inadequate infrastructure and perhaps, most worryingly, increasingly competent competition. “There isn’t a single college course in India teaching US GAAP; it’s a mandatory course in the Philippines,” says Roy. “We have created perhaps the largest base of educated unemployable people inthe world.” Already, the Philippines’ BPO industry employs 300,000 people and it has a 15 per cent share of the market. China is the other big threat, with its massive infrastructure and aggressive English adoption. At the same time, countries like Canada continue to be preferred for many sensitive tasks, due to the geographical proximity to the US.
BPO five-fold path
But there will be hurdles.
Experts say that the continuedgrowth and success of the industry will hinge on its ability to re-invent itself and will involve close co-ordination between industry, government and other stakeholders. “The government needs to be more proactive with taxation norms and proactive labour laws,” says Gaurav Gupta, India head of Everest Group. Despite these issues, industry players are optimistic because of the sheer potential in the market.
“We have just scratched the surface and may have covered 5 per cent of the addressable market,” says Som Mittal, the recently-appointed President of NASSCOM.
Rather than just an India presence, Gupta says a multi-locational approach will be key to a firm’s continued success in the market. “It’s not just about a large India presence anymore; a dispersed delivery base is critical in the market both to mitigate risk and provide more options to clients,” he explains. Before they can go overseas, Indian operators need to address some critical shortcomings at home. The Everest study, for example, estimates a shortfall of up to 1 million graduates (at entry level) under the current system. Then, there is also an acute shortage of specialised skills (actuaries for insurance processing, for instance), which could further hamper growth.
Critics say the biggest challenge it faces is one of perception. While BPO has opened new employment opportunities, it has also brought with it its own set of social ills. A fast-paced lifestyle and near-impossible deadlines have resulted in the creation of a parallel night life, often blamed for an upsurge in crime.
Then, issues of data theft at Indian BPOs have given naysayers in the West plenty of ammunition to protest job losses and movement of work to India. “We need to aggressively promote the skills of Indian companies and the safety of India as an outsourcing destination,” says Mittal.