EMIS Emerging Market Information Service IndiaBPO | Page 4
Outsourcing Sector Highlights
Business Services
With a 36% market share, India is the leading player on the global Business Process Outsourcing (BPO) market, CARE Research estimates show. More than 500 Indian companies offer BPO services to over 66 countries across the globe. Multinational BPO companies (MNC BPO) and Global In-House Centers (GICs), also called captives, constitute more than 50% of India's BPO revenue. The industry employs directly around 880,000 people and indirectly some 3.5 million people. With a 45% female workforce, it also plays a big role in empowering women. Indian BPO has evolved from delivering call center and data entry non-critical and lowvalue services to high-value added work performed by certified professionals. However, newly emerging competitors have snatched market share on the backdrop of internal industry problems such as high attrition rates and wage inflation eroding the competitiveness in the low-value services. The industry is seeking to move up the value chain, move to Tier-II cities, bring in more automation, increase process efficiency, seek incremental business within India or consolidate.
IT Services
Outsourced IT services accounted for some 33% of India's total USD 88bn IT service market in 2011, software industry association NASSCOM said. Total IT service revenues were estimated at USD 101bn for 2012, with an exports-to-domestic-services ratio of 68% to 32%, respectively. The sector accounted for 7.1% of India's GDP in 2011 and was estimated to have generated 7.5% of GDP in 2012. IT-BPO is to account for some 10% of India's GDP by 2020 and bring in 14% of the total services sector revenues. Within Business Process Outsourcing (BPO), IT service exports (IT-BPO) were estimated to have claimed some 47% in total direct employment in 2012. As much as 62% of the IT services outsourced to India in 2012 came from the United States. With a share of 41%, banking, financial services and insurance (BFSI) was the major segment to require Indian-delivered IT services in the year. Manufacturing and Hi-Tech/Telecom followed with 24% and 19%, respectively. Some short-term challenges to the sector include limited development of infrastructure in Tier II/III cities and rural areas, where companies are often moving to reduce costs, and the slow pace of reforms in education, aimed at bringing it closer to what the business needs.
Knowledge Services
India claimed some 65% of the global KPO market in 2012 and is expected to retain its leading position in the near future in spite of competition from Latin American, Eastern European and Asia Pacific countries, consultancy firm Evalueserve said. The market size of the Indian KPO industry, which emerged in the early 2000s, totaled USD 360mn in 2010 and is forecast to reach around USD 1bn in 2014. Early on only low value-added services were outsourced to India, but in recent years domestic vendors have been providing increasingly complex legal support solutions to multi-national clients. With a share of some 70% of the globa ????????%???????????????????????????????????????????????????Q??????????????? ??????????????????????????????????????????????????????????????????????????Q??????????????????????????????????????????????????????????????????????????????????????????????????????????
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