Posted by Hyderabad: Enterprise spending on BPO services in India to grow at a compound annual growth rate (CAGR) of 5.8% between 2020 and 2025. A huge enterprise push for outsourcing knowledge-based and vertical-specific processes is increasing the spending on BPO services as per GlobalData forecasts.
“India’s expertise in providing knowledge-based and vertical specific services in specific areas will drive growth during the forecast period,” said Pragyan Tarasia, Senior Technology Analyst – GlobalData. These areas include healthcare, life sciences, banking, insurance, legal processing, risk management, financial research, research and analytics, and digital marketing
BPO market in India is expected to reach $8.8 billion in 2025, according to GlobalData Market Opportunity Forecasts to 2025: ICT in India.
To ward off competition from countries like the Philippines, Malaysia, Mexico, and Canada, India has made efforts to liberalize regulatory guidelines for the BPO industry in recent times.
For instance, in June 2021 the government liberalized guidelines for voice-based BPO firms (classified under other service providers (OSP)) by removing the distinction between domestic and international service centers. This led to interconnectivity between all types of OSP centres.
Unlike in the past, global companies with voice service centers in India now will able to serve domestic as well as global customers with common telecom infrastructure.
The new guidelines also allow OSPs to locate their electronic private automatic branch exchange (EPABX) anywhere in the world. So the remote agents will connect directly with customers’ or centralized EPABX using any technology including wireless/wireline broadband, without the need to connect with the OSP center. Thus avoiding double hop.
Besides, providing ease of work for their employees who relocated to remote areas after the COVID-19 pandemic and enabling them to work from anywhere will also help BPO firms to improve the scale and speed of services.
Earlier in November 2020, the government had 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 new rules for OSPs were introduced to create a simple regulatory regime for remote operations and remove frequent reporting obligations for such companies.
Tarasia suggested that the new guidelines will go a long way in enabling ease of doing business for the industry and establishing the country as the most preferred hub for BPO services in the world.
“India’s support in the form of India BPO Promotion Scheme (IBPS) under the Digital India Programme to incentivize the country’s BPO/ITES operations, create employment opportunities and drive growth of the sector also augurs well for service providers,” added Tarasia.
Among all the BPO service segments analyzed, vertical-specific BPO services will account for the 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 the fastest CAGR of 9.6% during the forecast period.
“The large enterprise segment (1,000+ employees) will account for largest share of the total BPO spending in India through the forecast period. Given the wider scale and geographically spread-out operations typically, large enterprises are more likely to outsource their key processes to focus on their core business operations,” pointed Tarasia.
“The combined spending from micro (1-50 employees), and small and medium enterprises (51-1,000 employees), on the other hand, will increase at a CAGR of 5.8% over the forecast period,” concluded Tarasia.
(Image source – ICCS BPO)