IT and BPOShining Despite Turbulence

In many ways, 2010 has been a watershed year for the IT and BPO industry in our country. The achievement of growth, albeit in single digits, was hailed as a major milestone in an environment where most countries reported significant economic declines. As the year progressed and the threat of double dip recession receded, the confidence of most of the companies picked up. With the exports IT sector reporting double digit growth in the first half of the current fiscal, only a pessimist would worry that 2011 could see anything but a return to the happy days of high growth!

Another positive outcome of the weak global economy in 2010 has been the fact that most companies have taken the domestic market seriously, and made forays into the government and the private sector. This is an investment that will stand us in good stead as the Indian economy expands, and will also give a consulting led project capability that will be essential in the high growth markets of Asia, Africa, China, and the Middle East. The Indian market has also been a higher growth opportunity for BPO this year with mobile phone number portability driving focused marketing campaigns, and shared services opportunities emerging in all the major groups as they seek to sharpen their focus on their core processes and outsource the context. Also, we can expect that the adoption of cloud services particularly, hosted SaaS platforms for SMEs, will happen faster in India than elsewhere given the spurt in manufacturing and retail that is expected in 2011.

Global trends for 2011 also point to opportunities for intellectual property creation in new verticals like healthcare and media while vendor consolidation will create both challenges and opportunities for smaller players. Undifferentiated companies will find it difficult to plough an independent furrow, but nimble players with a differentiated point of view would be well positioned for business from large firms with smaller budgets. With the inexorable move towards cloud computing in all markets, industry players will have to increase their research budgets, and accelerate the creation of new services and value propositions for the discerning customers.

The pace of competitive national activity is also expected to rise in 2011 with the Philippines already laying claim to be the leader in voice BPO processes and mastering the low-end of transaction processing, and China continuing to scale in the outsourcing industry. Watch out for Jordan, Egypt, Mexico, and Chile as the Middle East and Latin America markets become the focus of attention of marketers. The good news is that the search for better, faster, and cheaper offshore outsourcing will continue at a fast clip, and there is a place for all in the outsourcing world.

If at all there are any clouds looming, there is the ongoing mood of protectionism and visa restrictions in the West, and the manpower issues here at home which is more of an internal problem. The high attrition levels and the move towards higher percentage of campus recruits in the employee mix is already creating source and train opportunities for the new breed skills development firms, but there is a real danger of quality dropping if processes are not redesigned and quality systems strengthened to permit the induction of fresh untested talent into customer projects. All in all, there are exciting months ahead for both the IT and BPO industry, in India and abroad and leadership will be tested in the months to come. This is a mature industry and I have no doubt, we will prevail!