Indian BPOs are building capabilities in several European languages including German, French, Swiss, Swedish, Italian and Norwegian. This geographical diversification has suddenly gained in urgency for Indian BPOs, given the rapidly depreciating dollar against the rupee, coupled with worries about the sub-prime crisis.

There are already several Indian vendors that have entered the non-English speaking markets, and many others are trying to capture the latent yet huge potential of non-English speaking markets. Several KPOs primarily in the publishing and research & analytics space are also working on developing multi-lingual capabilities.

Vendors are exploring different methods such as setting up centers, acquiring companies, hiring expatriates and foreign language professionals in India.

Hiring Indian foreign language professionals and expatriates: Some companies are hiring candidates proficient in foreign languages including German, French, Japanese, and Italian to take care of back office work. There has been an increase in demand for these professionals, though the supply base is not very large.

Several mid-sized vendors hire Indian foreign language professionals or expatriates. However, the problems of scalability and quality are major deterrents in this case especially while looking for talent within India. In India, English is a mainstream language and has been the medium of instruction for several years, as against the 'foreign languages', which are merely additional subjects taught in schools. Hence the level of proficiency in languages other than English is very low.

Setting up base in the foreign locations: Large vendors such as Genpact, EXLService, Wipro BPO and Infosys BPO already have centers in Europe and Latin America and are currently looking to strengthen their multilingual capabilities.

• Genpact has opened a new facility in Mexico increasing its existing capacity two-fold. The new facility is the outcome of the enthusiastic response of North American and worldwide clients. With this, the Company will be able to expand into Latin American regions Genpact plans to open its second BPO centre in Romania in October.
• EXLService intends to set up multi-lingual capability. It is keen on acquisitions in Eastern Europe. Offering services in German, French, Spanish and Italian is part of the company's plan to make this region the centre for clients needing finance & accounting services.
• Evalueserve has set up a center in China that focuses on the Chinese and Asian market.

Locations like Budapest and Warsaw have emerged as favored destinations primarily because of the available multilingual talent including German, French, and Italian to service clients in Europe and US. Alternately, several Indian vendors are also looking at China to target the Japanese and the Korean markets.

Typically, the larger vendors are investing in a setting up/acquiring a center in these foreign locations. While this comes with a separate set of challenges such as, drop in margins, cultural issues, etc., it provides the company with the advantage of a backup location to de-risk the business and a 'multi-location/global' tag.