Rural BPOs - Next big thing in IT, says Nasscom

Rural BPOs are the next revolution in Indian IT sector to happen, as the industry gears up to achieve $50 billion export target this year, Nasscom member Ashank Desai said.

"The host of rural BPOs that are coming up in the country, is the next revolution in industry to happen, rural BPOs is about creating jobs," Desai, who is also the chairman of Mastek, said at IIM-A confluence.

"Rural BPOs will reduce the cost for Indian IT companies first and later on globally," Desai said, adding, such BPOs are coming up in Karnataka and Haryana.

"Over the last 15 years we have increased the business size of industry almost 800 times, in 1990 our exports were 100 million this year we will do 50 billion, we have created two million jobs in the country directly, and another 6-8 million indirect jobs," Desai said.

source: http://www.indianbpoobserver.com/modules.php?name=News&file=article&sid=1571

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Bangalore's IT, BPO crowd less than 10 percent

Bangalore's IT, BPO crowd less than 10 percent

Bangalore: Employees in IT and BPO industries constitute just 10 percent of the total population of Bangalore. Data cited by The Times of India from various trade bodies and population statics show that these two industries employ just six lack people in Bangalore, in which 3.5 lakh employees are from IT and another 2.5 lakh from BPO/call center industry.

Assuming that each employee has a family of four -which is not the case as almost 50 percent of the industry is made up of singles in their early 20s- then their population in the city would be 24 lakh, which is 34 percent of the total

It was also found that the five jobs that every single IT job creates in the city generally goes to a villager who has migrated to the city in search of better prospectus from within Karnataka.

The findings were made on the ground of the state JD(S) President H D Kumaraswamy's remark on huge traffic jam occurred in the city during a political rally of his party. The rally had affected the movement of lakhs of people in North Bangalore and many people had criticized this act. Responding to the complaints, Kumaraswamy had said, "Sophisticated people and those working in IT/BT are making unnecessary noise."

According to a report in the Times of India, it has become a fashionable for politicians to blame the city's Rs.60,000 crore IT industry for all the ills plaguing Bangalore.

Source: Silicon

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BPOs see a clear advantage over IT

Source: Times of india

Bangalore: Business process outsourcing firms believe they will be less impacted by the global economic meltdown than their IT counterparts because much of what they do involves facilitating day-to-day operations.

BPOs offer services like payroll processing, bill/invoice processing, loan processing and insurance claim processing, as also equity research, business analytics, merchandising, and financial planning and analysis. These are operating expenses for the client company and the return on investment (ROI) for the BPO is mostly real-time. On the other hand, a large chunk of IT investments are capital expenditures — mid to long-term — and are therefore seen to be discretionary and deferrable. So while some analysts think many of the core areas of the IT sector could see declines in revenue of as much as 30% over the next year, they believe it could be lower than 10% for most BPOs.

Avinash Vashistha, MD of technology consultancy firm Tholons, says the slow down impact on BPOs will be limited. “Application support and maintenance and project implementation services of IT are likely to take a dip of over 30%. But BPOs are about core transactions and day-to-day functioning and clients will find it tough to delay these projects or make cuts in them,’’ he says.

P V Kannan, CEO of BPO firm 24/7 Customer, says the flip-side of the recession will work well for the sector. “It opens up huge opportunities for BPOs. The discretionary portion is very small in BPOs. Existing customers are in fact accelerating their offshore plan as they are under huge liquidity pressure. Many customers will adopt the outsourcing model from the first quarter of calendar 2009,’’ he says. Currently, processing services account for 60% of the industry while the rest 40% comes from core services (business analystics, financial planning etc). Last year, the ratio was 70:30 and its likely at 50:50 in 2009. Also, the share of voice based services has come down from 95% (India gets 5% of the global voice market) a couple of years ago to 80% now and is expected to fall further. “All these trends indicate that highvalue deals are likely to grow during 2009 and beyond,’’ says Sabya Sachi Satpathy, senior director of consultancy firm NeoIT. “Everyone’s worried about liquidity. Better management of operational spends saves money for customers. BPOs will cash in on this trend during these tough times,’’ says Partha De Sarkar, CEO of BPO company HTMT Global Solutions. Much of the core processes currently go to the Philippines, Mexico, Brazil and Ireland. Opening near-shore locations is expected to help India capture some of this flow, and Indian companies are beginning to do that.

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