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BPO Industry Expands to Nearshore/Onshore Locations

The Business process outsourcing (BPO) services industry in India, a relatively new entrant in the arena, seems to have globalised its workforce more than the information technology (IT) services sector. The BPO revolution in India, which started with the same motto of leveraging offshore markets to a greater extent to enjoy the cost benefits, is now on a path of globalisation. The $17-billion industry, late into the outsourcing arena when compared with the IT services industry, is now spreading its wings and aggressively setting its footprint on global locations.

While earlier the Indian and India-centric BPO players were seen leveraging the strength of offshore locations outside the country, now they are expanding more on onshore locations where a major chunk of their clients are located. India’s top BPO firms, including WNS (Holdings), Aegis, EXL Service, Hinduja Global Solutions (HGS) and TCS are considering opening new delivery centres or expanding existing ones in the US, the UK, Philippines and other global locations. “The primary reason why BPO is more global in service delivery than IT is because we serve global clients and also their back-office operations spread throughout the world. IT services, just the technology bit, is typically centralised. Whereas our operations are decentralised,” said Rohit Kapoor, CEO of EXL Service.

For EXL, almost 95 per cent of is its services workforce is off shore and five per cent is onshore, but it’s increasing. EXL has a presence in six countries outside India — Philippines, Malaysia, Romania, Czech Republic and Bulgaria. The company is exploring the option of having an onshore capability in the US, South Africa and Latin America. HGS prefers to follow the global business model. “We are very big in onshore. We are looking at starting new centres in Milan, Paris and Rome. We are also looking at geographies like China and Latin America,” said Partha Desarkar, CEO, HGS.

Of HGS’ total headcount of 22,000 employees, 14,000 are based in India and rest in Manilla, UK and the US. The company has presence in six countries outside of India. Industry experts and executives of BPO firms feel that onshore is going to be the way ahead as there is a growing demand clients to be offered the service from near-shore or onshore centres.

Via Business Standard


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