INTRODUCTION TO BPO

India became familiar with Business Process Outsourcing only in the early and mid 1990s, but now the entire country seems to be quivering with the BPO fever'. The Foreign direct investment (FDI) in the country owes a lot to this sector, which is progressing at a break-neck speed. .The cheap labour costs and the pool of skilled, English-speaking Indians have always been the two foremost factors contributing to the BPO boom in the country, The motivating factors include strong quality orientation among players, ability to offer round-the-clock services based on the country's unique geographic location, positive policy environment which encourages investments. There is so much euphoria about the BPO business that it almost seems too good to be true. New customers land in Bangalore every day, new companies are opened every month, and existing ones are growing at an unbelievable pace. BPO has been the latest mantra in India today. As the current sources of revenue face slower growth, software companies are trying new ways to increase their revenues. BPO is in the top list today. Its services are making a quick entry into the BPO space on the strength of their existing set of clients.

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MEANING
BPO means business processing outsourcing. BPO is a broad term referring to outsourcing in all fields. A BPO differentiates itself by either putting in new technology or applying existing technology in a new way to improve a process. It is the contracting of a specific business task such as payroll to a third party service provider. Usually BPO is implemented as a cost saving measure for tasks that a company requires but does not depend upon to maintain its position in the market place. BPO is often divided into 2 categories: 1. Back office
2. Front office. a) Back office outsourcing includes internal business functions

such as billing or purchasing.

b)

Front office outsourcing includes customer related services such as marketing or tech support. BPO is in our blood. Its 40-plus-year heritage of business and

technology solutions transformed through process improvement and the application of technology. Outsourcing can be defined as - an organization entering into a contract with another organization to operate and mange one or more of its business processes. BPO is one way of increasing their profits. The most common examples of BPO are call centers, human resources, accounting, etc.

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THE TOP 15 RANKERS

Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 2005 TO 2006 WNS Wipro BPO Hcl BPO services IBM Daksh EXL services Mphasis BPO Intel net global ICICI one source GTL Progeon 24/7 customer Datamatics technologies Hinduja tmt Transworks Tracmail 2006 to 2007 Genpact WNS Wipro BPO HCL BPO services ICICI one source IBM Daksh Progeon Aegis BPO services EXL services 24/7 customer Mphasis bpo Intel net global GTL TCS BPO Transworks

The basis of ranking is the revenues generated by the BPO companies in 2005-06, as per US GAAP. The parameters for the survey was: employee size, percentage of last salary hike, cost to company, overall satisfaction score, composite satisfaction, company culture, job content, growth, training, salary and compensation, appraisal system, people, preferred company i.e. percentage of respondents of a company who named their own company as the preferred one, dream company i.e. percentage of respondents in the total sample who preferred a particular company.

ADVANTAGES

Creation of urban infrastructure that has fostered several it centers in the country. A conducive business environment including several favorable policy interpenetrations

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 Growth in domestic it sector that provides enabling infrastructure and develops a broad based skill base. The average Indians attitude towards life has undergone a drastic change in the last few years. Business Process Outsourcing helps free up a firms capital and reduce costs. Operational excellence that has delivered cost and quality leadership in service centers

The changing lifestyles demand for luxury is possible only because the BPO industry that is call centers is providing good working conditions and environment attractive packages, and many other benefits. The people who are uneducated like ssc or hsc passed can easily get job if they have a proper control on their English. there will always be opportunities for pretty much most college graduates who want a job, have some aptitude, and are willing work hard The impacts of BPO industry in the longer-term effects which are more profound and have the potential to bring about very deep and fundamental socio-economic changes in India. The Indian BPO industry is focusing on the process of brand building with a view to create respect and awareness of the job among the people.

The new entrants into the BPO sector, who are consistently on the look out for trained youngsters, offer higher remuneration.

The BPOs provide efficient services, access to resources that may be beyond the organizations ability and increased cash flow. In the recent past BPOs have ramped up safety procedures to ensure the security of women employees who are working in night shifts BPOs contribute a fair share in the national economic development.

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BPO provides a very flexible market environment they are able to upgrade or stop operations as per market requirement

DISADVANTAGES
It is true that the Indian BPO sector is witnessing an unprecedented boom but the flip side of the industry cannot be ignored.

The Indian BPO industry has been battling certain complex problems such as labour attrition, poor infrastructure and lack of data protection laws.

The high attrition rate in the industry is primarily due to the restricted career options or growth opportunities for the youngsters.

Fear of stagnation is a major factor that forces the employees to quit the industry. Some leave their career mid-way in pursuit of higher education, others are drawn in by the higher pay packages offered elsewhere

Another key problem is the stressful work schedule, particularly night shifts, which may create both physical and mental disorders in the long run.

Other problems include misguidance by the company, non-conducive policies and procedures; mental strain brought about by reclusive lifestyle difficult relationships with peers or managers is also a problem. The BPO industry was initially built around the model of cost effectiveness. In recent times with wages continuing to rise around 10-15 per cent coupled with shortage ok skilled manpower the model no longer holds well.

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As business processes are distributed across the globe through diverse complex and increasingly mobile networks and fast growing industries, imperatives and challenges of creating a secure environment becomes principal. The BPO industry is capital intensive and requires huge amount capital infusion to fuel its growth. The most critical is the scarcity of the appropriate skills gained through the education system which is low on quality and relevance this is the constraint factor for the long term growth of industry. BPO jobs involve working on a computer or talking on the phone for long periods which creates mental stress.

TRENDS IN THE BPO INDUSTRY

India is in the phase of industry evolution highlighted by the greater degree of depth, specialization and competition. Outsourcing in traditional areas like customer care, financial services, manufacturing, IT, ITES is growing. Outsourcing is becoming more sophisticated. Customers are looking for business process excellence, speed to market, improvement in quality, benchmarking to world-class standards. CEOs are involved to ensure the long-term success of strategic off shoring decisions. On their part, suppliers understand that they must compete globally and that outsourcing will play a more transformational and strategic role for the client.

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Indian companies displayed increasing maturity as companies deployed innovative employee retention strategies which include employee recognition schemes, career planning services, etc. Indian ITES-BPO companies are acquiring companies in the U.S. and other locations with several objectives which include ready resources, clients and revenues, access to a new set of skills, access to a new technology and greater credibility with target clients by having a strong local presence. There is increasing global competition and pressure on margins from emerging lower-cost outsourcing destinations. Risk factors for outsourcing like terrorism and war, disaster and disease make contingency plans a necessity. Large multinational companies are investing in captive BPO units in supplier countries in multiple locations, to reduce risk and control quality. The IT industry will see roughly 10 to 15% of its jobs move overseas during the next ten years, inviting more political debate. For the past two decades, China has been growing at an astounding 9.5% a year and India by 6%. They are impacting the global economy and leading the outsourcing revolution. This growing trend's further highlights the transformation of outsourcing to global sourcing.

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CRM IN THE BPO SECTOR

BPO's feel the need to manage every single interaction with their customer and maintain a database of the same. In such a situation the best option for any Business Process Outsourcer is a Customer Interaction Management Solution (CIM). A CIM Solution integrates insight and optimizes customer interaction across multiple channels. Handling these multiple functions is a tough task and BPOs face various issues with their end customers. They are also, facing increasingly stiff competition throughout the world. The Indian ITES-BPO industry is entering Phase II of evolution (i.e., moving from potential to performance). Indian ITES-BPO organizations have now started looking beyond contract fulfillment to identify opportunities for delivering high quality service to end-customers. They are aligning internal systems to ensure high customer satisfaction. These steps will serve as the building blocks for future success. The cost of acquiring a new customer is five times the cost of retaining an old one. And hence it is important that every customer interaction is managed in the best possible way. A CIM solution is a required component of any customer relationship management strategy as it is a new hybrid of the traditional CRM technologies that have been adapted to the Internet and the growing number of personal communication devices. CIM is comprised of parts of the previous generation of CRM solutions with the addition of Web-based interaction solutions and wireless device transaction management.

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For a BPO / ITES set up, solutions of this nature are preferred as these new communication / interaction channels enable companies to add more customer-facing touch points to create a 360-degree interaction capability and enhance customer communication irrespective of what channel is being used. A CIM solution allows a call centre to evolve into a contact centre which enables interactions through all channels not just phone. A CIM solution has various benefits and they suit a BPO business with utmost efficiency. Some of the benefits of a CIM solution are:

CIM allows operations managers to monitor and improve productivity of employees allows seamless integration.

CIM makes the process of customer service agent-independent, so even if individual agents quit or move onto other projects, the process of customer service is not disrupted Reduced customer support/marketing costs Higher sales conversion rate Enhanced flexibility to manage service peaks and troughs, product lifecycles Homogeneous, clearly defined processes across geographies Greater coverage and number of interactions with customers In order to manage all interactions seamlessly a BPO / ITES business needs to deploy a CIM solution that can create a virtual customer service center to manage customer concerns and queries through multiple channels including voice, e-mail and chat on a 24/7 basis.

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JOB OPPORTUNITIES
The job in the BPO Company is a great option for a quick buck but it is not a long term career option. The BPO offers promising job prospects and a very rewarding career. The job in the BPO Company is very useful to the trainers because the employee oriented human recourse structure enables them to climb up the ladder and occupy senior post in a very short period. The BPO companies provide fast track promotion and higher education sponsorship schemes. BPOs offer top class compensation n faster growth in packages compared to other industries. Career opportunities are good in this company because the company r employing people of the age 30s and 40s so it is a good opportunity for them to earn money in their old age. Basically the job in the BPO Company is voice oriented so there is a compulsion of knowing fluent English, without that it is not possible to get a job.

INDIA OUTSOURCING DESTINATION

India's share of the global offshore outsourcing market for software and a back-office service is 44%. Indias premier trade body of the IT software and services industry, technology and IT services exports in India were worth $17.2bn (9.5bn) in the year ended March 2005, a rise of 34.5% over the previous year. A further expansion of 30% in exports is predicted in the next twelve months, to reach $22.5bn. The US accounts for 68% of Indian exports.

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Near-shoring as a business strategy - India can collaborate with other countries to leverage local knowledge of the business environment and language skills while providing its domain knowledge and technological expertise for successful outsourcing. For example, TCS has a Latin American arm based in Mumbai, India which serves an insurance client in Chile with a center in Uruguay as a near-shore location. Outsource2india has collaboration with a company in NE India that leverages the unique talents of the people of this region.

WHY BPO HAS SELECTED THE COUNTRY LIKE INDIA?

The abundant skilled manpower has made India a target destination for multinationals to back end their operations in India. India ranks high in areas such as qualifications, capability, qualities of work, linguistic capabilities and work ethics and thus is ahead of competitors such as china, Ireland, Canada and many more. Indian companies have unique capability and systems to set measure and monitor quality targets. In specific BPO categories Indian centers have achieved higher productivity levels for example number of transactions per hr for back office processing than their western counter parts. Also India is able to offer a 24/7 service and reduction in turn around times by leveraging time zone differences. Many state governments in India are offering incentives and infrastructure to set up it enabled services. The industry is rapidly growing and maturing and India has established itself as a major outsourcing hub. About 1, 00,000 engineers graduates from India every year. Many of these engineers are employed with call centers for trouble shooting and providing technical support at salaries that are dramatically lower compared to the pay
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scales in the US. As India is a country with high intellectual capital, and services are available at affordable prices. It is a strategic & beneficial decision for a business to outsource these services to India.

SOME SERVICES OFFERED BY BPO

Customer support services: - customer service offerings create a virtual customer service center to manage customer concerns and queries through multiple channels including voice, e-mail, chat on a 24/7 and 365 days basis. Example: customer calling to check on their order status. Technical support services:-technical support offerings include round the clock technical support and problem resolution. it also include installation and product and running support, troubleshooting and usage support.example:customer calling with the problem of their software or hardware Telemarketing service:-telemarketing outsourcing services target interaction with potential customers for prospecting like for promote and cross sell to an existing customer base or to compete the sales process online.example: calling to sell credit or debit cards. Employee desk services:-it provides problem resolution and support for corporate employees .example: it operational issues and product usage queries. Insurance processing:-it provides specialized solutions to the insurance sector and supports critical business processes applicable to the industry right from new business acquisition to policy maintenance to claims processing. Example: policy issuance, case management, etc. Data entry services:-the company has a record of every activity performed. Example: business card data entry, receipt and bill data entry.

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EMPLOYEE BENEFITS
Provident fund: The employee is required to contribute a percentage of his basic salary to a common fund. The employer for this fund contributes as well. The employee can use the amount deposited in this fund for various personal purposes such as purchase of new house, marriage etc. Gratuity: Gratuity is one of the retrial benefits given to the employee in which the employer every year contributes a particular amount. Group Mediclaim Insurance scheme:- This insurance scheme is to provide adequate insurance coverage of employees for expenses related to hospitalization on due to illness, disease or injury or pregnancy in case of female employees or spouse of male. All employees and their dependent family members are eligible. Personal accident Insurance scheme:- This scheme is to provide adequate insurance coverage for hospitalization expenses arising out of injuries sustained in an accident. Subsidized food & transportation:The organization provide transportation facility to all the employees from home till office at subsidized rates. The lunch provided is also subsidized. Company leased Accommodation:- The BPO companies under take to pay electricity / water / bills as well as the society charges for the shared accommodation. The purpose is to provide to the employees to lead a more comfortable work life balance. Corporate credit card:- The main purpose of the Corporate credit card is enable the timely an efficient payment of official expenses.

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Cellular Phone / Laptop: Cellular phone and / or Laptop is provided to the employees on the basis of business need. The employee is responsible foe the maintenance and safeguarding of the asset. Personal Health Care {Regular medial check-ups}: Some of the BPOS provides the facility for expensive health check-up can be done once year. Loans: Many BPO companies provide loan facility on three different occasions: Employees are providing with financial assistance in case of medical emergency. Employees are also provide with financial assistance at the time of their weeding. And the new recruits are provided with interest free loans to the assist in their initial settlement at the work location.

FACT SHEET OF INDIAN IT INDUSTRY

FY 2006-07 witnessed a revalidation of the Indian Information Technology Business Process Outsourcing (IT-BPO) growth story, driven by a maturing appreciation of Indias role and growing importance in global services trade. Industry performance was marked by sustained double-digit revenue growth, steady expansion into newer service-lines and increased geographic penetration, and an unprecedented rise in investments by Multinational Corporations in spite of drawn out concerns about gaps in talent and infrastructure impacting Indias cost competitiveness. The sector looks set to close the year at record levels, with the revenue aggregate growing by nearly ten times over the past ten years. Positive market indicators including large unaddressed white-spaces and the unbundling of IT-BPO mega-deals with increasing shares of global delivery, strongly support the optimism of the industry in achieving its aspired target of USD 60 billion in exports by 2010.While India is uniquely advantaged to best address these opportunities, they are not lost to others.
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Timely, coherent and continued action is needed to ensure that India makes the most of these opportunities and maintains its lead.

KEY HIGHLIGHTS OF THE IT-ITES SECTOR PERFORMANCE

IT Industry-Sector-wise break-up (All figures in $ billion) IT Services -Exports -Domestic ITES-BPO -Exports -Domestic Engineering FY 2004 10.4 7.3 3.1 3.4 3.1 0.3 and 2.9 FY 2005 13.5 10.0 3.5 5.2 4.6 0.6 3.9 3.1 0.8 22.6 17.7 5.9 28.4 FY 2006 17.8 13.3 4.5 7.2 6.3 0.9 5.3 4.0 1.3 30.3 23.6 7.0 37.4 FY 2007E 23.7 18.1 5.6 9.5 8.3 1.2 6.5 4.9 1.6 39.7 31.3 8.2 47.8

Services

R&D, Software Products -Exports 2.5 -Domestic 0.4 Total Software and Services 16.7 12.9 Revenues Of which, exports are Hardware 5.0 Total IT Industry (including 21.6 Hardware) Total may not match due to rounding off

Growth in Revenues: The Indian IT-ITES sector (including the domestic and exports segments) is expected to exceed USD 47.8 billion in annual revenue in FY07, an increase of nearly 28 percent in the current fiscal. Contribution to GDP estimated to be 5.4% up from 4.8% last year.

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Service and software exports remain the mainstay of the sector contributing USD 31.3 billion and beating forecast to register a 32.6% growth. Increasing footage in offshore product development and engineering services is supplementing Indias efforts in IP creation. This segment is growing at 22-23 percent and is expected to report USD 4.9 billion in exports, in FY 2006-07. Multi National Companies investments reach an unprecedented scale; over USD 10 billion announced in FY 2006-07, to be invested over the next few years. Service-line expansion: Aiding service providers to take on larger and more complex deals, and is driving up the average size of contracts awarded to Indian firms. Indian Service Providers have grown their share of contracts of values in excess of USD 50 million dollars from 1% in 2002 to 7% in 2006. High offshore component of delivery and superior execution in multilocation delivery continue to be key differentiators. Broad-based industry structure - IT led by large Indian firms, BPO by a mix of Indian and MNC third-party providers and captives, reflects the depth of the supply-base Even though larger players continue to lead growth, gradually increasing their share in the industry aggregate; several high-performing Small and medium enterprises also stand out. Employment Trends & Initiatives [By NASSCOM] Total IT Software and services employment to reach 1.6 million in FY07. The industry in collaboration with the government and other

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stakeholders has initiated several initiatives to further enhance the availability and access to suitable talent for IT-ITES in India. It has suggested the concept of experimenting with adapting the Special Economic Zone concept (deregulation and removal of restrictions) for education, and creates Special Education Zones. The long term steps that are needed include much higher government investment in education, major education reform and better compensation and research grants for teachers/researchers It has proposed the setting up of a chain of finishing schools for IT professionals to make them more employable with a simple 3-4 months of honing of technical skills and imparting soft skill training, helping bridge the manpower supply-demand gap by at least 30-40%. EMPLOYMENT FIGURES- SOFTWARE AND SERVICES SECTOR Sector IT Services ITES-BPO Engineering FY 2004 215000 216000 Service, 81000 FY 2005 297000 316000 93000 FY 2006 FY 2007E 398000 562000 415000 545000 115000 144000

R&D, Software Products Domestic Market (including organizations)

TOTAL*

user 318000
830000

352000
1058000

365000
1293000

378000
1630000

*Figures do not include employees in the hardware sector Domestic Market Matures: Complements the continued growth in IT-ITES exports and for the first time ever in FY 2006 showed signs of breaking out of the hardware led growth and the trend of software and services gaining share is expected to continue.
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The total size of the domestic market is expected to cross USD 15.9 billion in FY 2006-07, a growth of 21 percent over FY 2005-06 Traditionally, this segment has been led by MNCs. However, Indian firms are gradually gaining ground. Overtime this segment could become a larger SME play, as the mid-sized firms increase their levels of IT adoption Global Markets: While US and UK remain the dominant markets for ITITES exports, revenues from newer markets are growing rapidly FY04 Americas 69.10% Europe 22.20% Rest of 8.70% the World Growth Verticals: BFSI, Telecom and Hi-Tech continue to account for approximately 60% of the pie. Other verticals such manufacturing, retail, transportation, healthcare and utilities are also growing rapidly. Emerging Locations - As global delivery matures, newer locations are emerging; however India is expected to remain the undisputed leader

FY05 69.40% 22.60% 8.00%

FY06 68.30% 23.10% 8.60%

FY07 67.18% 25.13% 7.69%

Going forward: For India to fully capitalize on the opportunity and sustain a disproportionate lead in the global IT-ITES space, stakeholders need to continue working towards timely and coherent execution of initiatives to address supply-side concerns across the following areas: o Augmenting Talent Supply o Creating world-class infrastructure

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o Strengthening information security o Enhancing operational excellence o Providing regulatory support o Catalyzing domestic market development o Fostering an ecosystem for innovation

GROWTH OF IT SECTOR IN INDIA

Domestic demand for IT in India is witnessing a gradual transformation from being predominantly hardware driven towards a solutions oriented approach resulting in a growing emphasis on services. In fact, revenue growth in the services segment alone has reported faster growth than that for the overall domestic IT market (including hardware, software and services) over the past few years. As depicted in the following chart, this trend is expected to continue over the forecast period.

GROWTH OF IT SPENDING IN INDIA

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The liberalization of Indian economic policy, de-regulation of key sectors and progressive moves towards further integrating India with the global economy has been a key driver of increased IT adoption in the country. This is best reflected in the fact that most indigenous players in telecom and banking, two key sectors with significant multinational corporation (MNC) participation, have significantly upgraded their levels of IT adoption to offer best-in-class services comparable to those offered by the global competition and these two sectors together account for approximately 35-40 percent of the domestic spend on IT services.

CONTRIBUTION OF BPO COMPANY IN NATIONAL ECONOMIC DEVELOPMENT

Small scale industries occupy a place of strategic importance in Indian economy in view of its considerable contribution to employment, production
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and experts. However since 1991 small scale industries in India find themselves in an intensively competitive environment due to globalization, domestic economic liberalization and dilution of sector specific protective measures. This paper probes the implications of globalization and domestic economic liberalization for small scale industries analyses its growth performance in terms of units, employment, output and exports. The paper concludes with policy recommendations to ensure the sustenance and competitive growth of small scale industries in India. Call centre contribute $1 billion to economy.

The BSP is completing its survey on the sunrise industry, which includes medical and legal transcription firms, call centers and other BPO firms. The governments attempt to capture the economic benefits from this sector, as well as its impact on the countrys balance of payments position. BPO inflows are currently recorded in the services a/c, which is one of the main drivers of the economy. Studies are made whether BPO inflows will be treated as a separate item or included in the BPO payments a/c. it must be ensured that there will be no overlapping or double entry. It is difficult tracking the transfer of funds to the local BPO sector, as transfers are made through private a/cs & not through intercompany accounts. The National Economic and Development Authority (NEDA) is conducting a separate survey to determine the BPO sectors contribution to the economy.

At present the industry growth is measured through the aggregate number of seats generated.
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 In a related development, the government plans to include the retirement and medical tourism industries in its investments priorities plan (IPP) for the next year, a Board of investments official said.

REVENUE FORECAST FOR FIVE YEARS

The several large e-governance initiatives launched by the government under the National E-Governance Plan (NEGP) are expected to provide sustained growth in domestic demand for IT services over the next few years. Over the next five years, domestic spending on outsourced IT services is projected to more than double, from INR 103 billion in 2004 to over INR 238 billion in 2009.

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Five Year Revenue Forecasts for Key Service Lines in the Domestic Market (INR Million) Break Ups IT Consulting System Integration Application 2005 5669 42979 17115 2006 6775 51900 19852 10247 25819 32907 5609 2007 7774 62065 22586 12343 31401 37651 6534 2008 9109 72960 25113 14344 36262 42510 7260 2009 10674 85399 27924 16850 41509 48186 8067 CAGR 17.4% 20.2% 14.8% 21.6% 19.9% 15.3% 14.3%

Development End-to-End 8221 Outsourcing Discrete 21055

Outsourcing Deploy and 28321 support IT education 4879

and training Grand Total 128239 153109 180354 207559 238607 18.2% Source : IDC, 2005

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Revenues by DOMESTIC IT SERVICES

Systems integration and network integration make up a high growthlarge size category within the IT services engagements. These services will continue to be prime drivers of the domestic IT services market in the enterprise segment due to the increasing growth in the enterprise application implementation and increased demand for network integration from telecom & banking verticals. Domestic IT Services Revenues by Key Vertical Markets (2006)

The financial services, communications and media, and manufacturing verticals accounted for over 3/4th of the revenues earned by service providers in the domestic IT services market in 2006. A significant portion of the domestic corporate IT spends still lies in-house, predominantly driven by a perceived lack of focus by service providers on the domestic market and a perceived absence of value generated by outsourcing.

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TOTAL REVENUE GENERATED

Total Revenue Indian IT Industry (Including Hardware) (where on X axis: numbers 1 to 4 represents FY 2003-04 to FY 2006-07E respectively) The Total IT Industry including Hardware is expected to cross US$ 47.8 bn in 2006-07, as compared to US$ 37.4 bn in 2005-06 an anticipated growth of about 28%. With progressive deregulation and rising competition, companies are increasing their focus on the domestic market; especially on emerging sectors such as retail, logistics, telecommunications and SMEs. There is still significant untapped potential exists in the domestic market. The rapid adoption of IT services and small base likely to result in high growth (rate) in domestic BPO as well.

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SHARE OF INDAIN NATIONAL GDP

(where on X axis: numbers 1 to 10 represents FY 1997-98 to FY 2006-07E respectively) The industries contribution to the national economic estimated to increase from 4.8 per cent in the year 2005-06 to 5.4 per cent in 2006-07. Indeed, the phenomenal growth of the Indian IT Software & Services and ITES-BPO sector has had a perceptible multiplier effect on the Indian economy as a whole. In addition to the direct positive impact on National Income and Employment generation, the sector has spawned the mushrooming of several ancillary industries, triggered a rise in direct-tax collections and propelled an increase in consumer spending, thanks to the significantly higher disposable incomes.

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The rapid expansion of ITES-BPO services, and the IT industry as a whole, has had a profound impact on the socio-economic dynamics of the country. The sector has grown to become the biggest employment generator with the number of jobs added each year almost doubling, has catalyzed the growth of a number of ancillary businesses such as transportation, real estate and catering, and has created a rising class of young consumers with high disposable incomes.

FUTURE OUTSOURCING TRENDS WORLDWIDE

Outsourcing expenditure will continue to rise. More countries will find outsourcing attractive, creating a multi-

polar world. Following the lead of the US and UK, the European Union markets will expand their off shoring programs, while Japan will increasingly look to China for its needs.

Customers will take greater control in driving and designing deals. The interlinking of the supply chains brought about because of

outsourcing will create stability as companies will put pressure on governments to avoid wars.

Risk factors and unexpected occurrences like war, terrorism,

disease, natural disasters and economic upheavals can throw a wrench in the works.

The rising price of oil will put increasing pressure on companies to

both utilize technology and outsource to remain profitable. The rising price of oil will cause oil consuming countries like the USA to be less competitive resulting in more outsourcing to India and China.

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 India will show excellence in Services that require advanced English like Knowledge Process Outsourcing (KPO), Content and Medicine.

Technological power will shift from the West to the East as India

and China emerge as big players in the global outsourcing market. The two countries have the size and weight to transform the 21st global economy.

By 2015 China will be No. 1, India No: 2 in the global top five Vendor focus will shift from basic skills, costs and processes to

outsourcing destinations.

domain knowledge, transition challenges, change management, HR issues and governance.

Regional outsourcing hubs will develop as companies will take

strategic near-shoring initiatives to minimize risk and leverage cultural and linguistic compatibility. The supplier countries are in the same time zone as their customers.

The large diverse Indian companies will face stiff competition

from new focused smaller companies. Because these companies are able to focus and become excellent in one are they will be able to provide a higher level of service. In 2007 there will be a flood of companies targeting niche services.

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POINTS GIVEN BY MISS PRAJAKTA HR MANAGER AT IBM DAKSH

IBM- Daksh is a multi-national company, ever growing over the years.

It is an internet service provider outside India.

Its customers are mainly in U.K, London. Working environment:o The employees get good promotions as per their work and efforts. o They enjoy competitive packages as the company is growing. o They enjoy additional facilities at work e.g. Pick up and drop facility for staff working in shifts, Contribution to National Economic Development:o Rise in standard of living of an individual o Generating revenues for the economy o Job opportunities o Inflow of foreign exchange to the country.

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