BPO sector must gear up for role changes: study

Technology and market research firm Forrester Research has predicted that the growth in offshore activity and services has seen the business process outsourcing (BPO) industry enter its third phase of evolution.

The growing complexity and nature of deals for services, requires suppliers to change their market and account management practices.

Sharing the highlights of a soon to be published report, John McCarthy, vice-president (Asia Pacific Research), Forrester Research Inc said, "In the past five years, the BPO services industry has started maturing. The nature of services being ofshored are more complex."

Pointing out to the increase in the number of clients for IT companies and complex nature of services being offshored, McCarthy stressed, "Companies will now have to change to cater to the specific needs of each verticals and sub verticals. They can no longer have a generalised marketing strategy."

He outlined the new offshore success mantra for IT companies as, "product marketing, real account management (an increase in client servicing and marketing executives handling a particular account), making strategic choices (focusing upon 3-4 verticals) and becoming specialised service providers."

Noting that consolidation, acquisitions and mergers would continue across the industry, "Only the big three would survive to be multi-line global delivery service providers," said the study, warning that the rest, if they did not adopt any key differentiation strategy, would be at the bottom.

The research has also brought to the fore a few disturbing facts. Citing key trends in the offshore services space based on a survey carried out on 227 IT executives on several parametres like overall satisfaction, industry expertise, perception of communication and professionalism, McCarthy said, "As offshoring companies are growing, the satisfaction levels have dropped almost 50 per cent for quality advantage and communication and professionalism. In 2003 communication and professionalism was 27 per cent and its reduced to 18 per cent in 2005, whereas the quality advantage has diminished from 27 per cent in 2003 to 19 per cent in 2005."