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Sunday, 12 February 2012
Domestic market: A perspective on outsourcing drivers
Wednesday, 24 September 2008
Indian domestic BPO opportunity is estimated to be over INR 200 b for 2007, but very little of this has been actualized. This gap can be largely attributed to the diverse yet largely diffused range of "business needs" for outsourcing across various industry verticals. Differing maturity levels of individual companies within each industry vertical makes it further difficult to realize the huge outsourcing opportunity. Indian companies are increasingly leveraging outsourcing to focus on core competencies, enhance productivity and reduce time to market. However, outsourcing drivers for individual buyer groups vary substantially

Sectors  
Industry Drivers for outsourcing
Opportunity areas (FY08-FY12)
Banking

Implementation of the third phase of reforms
Increasing competition from private banks
Increasing centralization/ computerization

Customer support (inbound, outbound)
Collections
Analytics
 Telecom
 
Escalating subscriber numbers
Enhancing customer satisfaction by providing value added services
Entry of new players
Customer support
Customer analytics
Data services
Government
 e-governance
Emergence of new services
Success stories Government Railways, etc
Digitization
Voice based services
 Financial Services

 Asset management companies growing at rate of 100%
Consolidation in financial services

Customer support (inbound, outbound)
Collections

 Insurance

Increasing competition
Reduced time to market
Customer support (inbound, outbound)
 Retail  Huge investments envisaged
Growth of the organized market

Customer support (inbound, outbound)
Loyalty programs 

 Airlines
 
Rise in passenger volumes
Entry of new airlines
Bookings reconciliation
Revenue accounting
Customer support (inbound, outbound)
 Logistics

 Increase in share of organized market (3PL)
Data entry
Invoice processing
CRM - voice and non- voice
Accounts reconciliation
 Travel & Hospitality
 Increase in outsourcing awareness  CRM - voice and non- voice
Support services
 
  • For example in banking, entry of private and foreign banks has elevated the benchmarks for service quality and delivery. Therefore, 24/7 customer support and aggressive marketing are a given. But traditionally, several of the Public Sector Banks (PSBs), have not focused on building a marketing function. Today, these banks are increasingly using outsourcing to quickly scale up their marketing function to match that of foreign and private players.
  • Over Rs. 1200 b ($30 b) worth investments are planned in the retail sector over the next five to seven years. As several of the large players like Reliance Retail, Bharti-Walmart, Mahindra & Mahindra, Parsvnath, DLF, Jubilant group and foreign retailers like Marks & Spencer roll out their retail plans, they remain focused on maintaining a lean back end to maintain lower operational costs. Focusing on the core has been a prime driver for outsourcing initiative of these companies.
  • With increasing crude prices, aviation companies are under tremendous pressure to cut costs and not increase the price. Airlines thus have no option but to enhance productivity and platform based BPOs like Kale consultants have come to aid.
  • Insurance companies, which are expanding aggressively in new cities and launching new products - time to market is ever more critical. Outsourcing in the marketing and pre-sales activities has helped insurance companies roll out business across multiple locations within a short time frame.

While the opportunity is huge, growth in outsourcing from domestic market will be driven by ability of the vendors to address "pain areas" of these companies. A "one size fits all" approach cannot be applied, as all industry verticals are experiencing rapid growth and are at different phases of maturity with their unique business needs.


 
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