|
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.
|