BPO, Back, Office, Customer, Care, Drive
Back office, customer care drive BPO
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Back office processing and customer care will drive Business Process Outsourcing (BPO) growth in India over the next three years, according to a study.
''India is expected to corner 12 billion dollar share of the above one trillion dollar BPO market by 2006 and among service categories, the growth will be highest in the back office processing,'' the study by IDC has said.Back Office Processing is the fastest growing services segment in the BPO market and is expected to remain major revenue earner for both captive and non-captive operations. In India this segment will show a compounded annual growth rate (CAGR) of 62 per cent from 1,614 million dollars in 2003 to 6,102 million dollars in 2006.
The customer care segment has seen an exponential growth in the number of players and this trend is expected to continue in next 3-4 years. Low entry and exit barriers, presence of a large number of players, shorter transition cycles and heavy prices has badly hit the margins for most players making survival difficult for the entire segment.
The IDC anticipates market chaos to continue for another 3-4 years but sees a fall in attrition rates and utilisation rates to improve once the players in the industry are able to optimise their processes and resources.
The research firm says as the customer care services providers grapple with the problems, this segment in BPO will expand at the CAGR of 56 per cent between 2003 and 2006. The market will grow from 1,330 million dollars in 2003 to 4,819 million dollars.
Digital content development segment of BPO will grow at 30 per cent every year till 2006 to touch 1,220 million dollars in 2006 from 520 million in 2003. Presently, not many players in India provide digital content development services. Given the size of the market opportunity, IDC expects more service providers to enter this space.
Transcription business in BPO will, however, contract at the rate of nine per cent annually from 31 million dollars in 2003 to 26 million dollars.
Strong control wielded by market intermediaries, complex training schedules, low accuracy levels are some of the factors that will contribute to the decline in demand of transcription services from India, according to IDC.
BPO services like market research, remote education and data search is a small segment in overall market but will grow 21 per cent annually from 11 million dollars in 2003 to 22 million dollars in 2006.
IDC estimates that US and Europe will continue to drive BPO industry in India.
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