Enterprise spending on BPO services in India is forecast to increase at 5.8 percent CAGR over 2020-2025, forecasts GlobalData.
The spending on business process outsourcing (BPO) services in India will be driven by huge enterprise push for outsourcing knowledge-based and vertical-specific processes, says GlobalData.
The BPO market in India is expected to reach $8.8 billion in 2025. Indian BPO industry faces competition from countries like the Philippines, Malaysia, Mexico, and Canada.
In June 2021, India government liberalized guidelines for Voice-based BPO firms (classified under other service providers (OSP)) by removing distinction between domestic and international service centers and allowing interconnectivity between all types of OSP centers.
This will enable global companies with voice service centers in India to serve domestic as well as global customers with common telecom infrastructure, something that earlier required separate, dedicated infrastructure.
The guidelines allow OSPs to locate their electronic private automatic branch exchange (EPABX) anywhere in the world enabling their remote agents to connect directly with customers’ or centralized EPABX using any technology including wireless / wireline broadband, without the need to connect with the OSP center, avoiding double hop, the report said.
In November 2020, India government simplified BPO and ITES guidelines to ease the compliance burden on service providers and establish the ‘Work-From-Home’ and ‘Work-From-Anywhere’ framework. The changed rules for OSPs were introduced to create a simple regulatory regime for remote operations and remove frequent reporting obligations for such companies.
Among all the BPO service segments analyzed, vertical-specific BPO services will account for largest share of the overall enterprise BPO spending through the forecast period. Enterprise spending on finance and accounting BPO segment, on the other hand, will grow at a fastest CAGR 9.6 percent during the forecast period.
“The country’s expertise in providing knowledge-based and vertical specific services particularly in areas such as healthcare, life sciences, banking, insurance, legal processing, risk management, financial research, research and analytics, and digital marketing, are expected to drive growth,” Pragyan Tarasia, Senior Technology Analyst at GlobalData, said.
IT-Software association Nasscom recently said the BPM sector in India employs over 1.4 million people (excluding domestic and in-house). The IT-BPM sector overall employs 4.5 million people as of March 2021.
Around 33 percent of the total jobs in the BPM sector are related to customer interaction services (e.g. call centre work including mail, chat etc). Most of the customer work from India is now being done in an omni-channel model and involves higher end expertise with technology and automation already built into the processes.