BPO: India gets $89 mn publicity

Indian BPO's have received free advertising worth about $89mn because of anti-outsourcing campaign

The anti-outsourcing campaign in the US has started working in favour of Indian Business process outsourcing (BPO) outfits as it has substantially increased awareness amongst US corporates about the benefits of offshoring.

A report under preparation by New York-based market research firm Evalueserve, BPO to KPO ""Business Process Outsourcing to Knowledge Process Outsourcing, has estimated that the Indian BPO companies have received free advertising worth about $89 million because of the anti-outsourcing campaign. The report is likely to be released in July.

Confirming the trend, more than one BPO company told Business Standard that there is a longer queue of American companies in front of their offices than ever before wanting to outsource work to India.

According to Exlservice, Inc president & CFO Rohit Kapoor, the company has had 15-20 per cent more visitors in the last quarter as compared to the same period a year ago. "This will translate into more business for 2005 and 2006," he said.

Senior BPO industry executives say that the anti-outsourcing campaign in the US has broadened the market as several smaller companies have come alive to the benefits of outsourcing.

"After the big companies, we now see smaller companies willing to outsource work," said Kapoor. "The second rung companies are now better aware of outsourcing," added Nasscom president Kiran Karnik.

According to Inductis, a market research firm, outsourcing to India has helped US companies to save a much as $8 billion in the last four years. Employing 810,000 people, the Indian BPO sector did a turnover of $3.6 billion in 2003-04.

Nasscom has said that the US economy could lose upto $2 trillion worth of growth opportunities due to a massive labour shortage by 2010 if it did not take appropriate measures like outsourcing and immigration to bridge this gap.

The last one year has seen a heightened campaign in the US against outsourcing of work to India on the grounds that it led to a transfer of jobs to India.

Though some contracts have been terminated in the past over issues related to the quality of service, Indian BPO companies have been arguing that the campaign is being orchestrated more with an eye on the coming presidential elections in the US.