BPO – trends and opportunities for offshore outsourcing to India

Outsourcing IT services such as call centres, human resources and accounting to third party service providers in India can be extremely beneficial in terms of reducing costs and saving precious management time and resources.

According to figures seen by the BBC, India exports some $25 billion worth of business process outsourcing (BPO) services per year and this figure is expected to rise to $60 billion by 2010 as more businesses come to realise what they are missing out on.

Telecommunications in India have vastly improved over the past few years and the level of English fluency in the country today is excellent. Indeed, the country produces the largest number of graduates in the world and as a result it has an extremely large pool of highly educated English speaking workers who are skilled in mathematics, IT and engineering.

Also, the wages paid to professional IT workers in India are around one tenth of those paid to workers in Europe or the US, meaning businesses can save substantial amounts on labour without losing service quality.

These reasons alone make India an obvious choice for BPO, but it is not just cheap, high-quality labour that attracts companies to India. There are a host of other reasons why outsourcing white collar tasks to the country can help businesses succeed in the global marketplace.

As well as saving money on labour businesses can also cut their costs by managing their finances more efficiently. Establishing fixed costs for outsourced business practices means that companies can better predict their future costs and as a result set realistic budgets.

Choosing to outsource IT operations to India can also allow companies to focus on core competencies. Without having to deal with payroll operations, accounting or human resources tasks, managers are able to concentrate on what they do best, such as making plans for the long-term growth of the company, looking towards expansion and making sure they are meeting their customers' needs every step of the way.

Aside from its highly skilled workforce, India also has many unique advantages that make it an ideal place for BPO. Being in a different time zone gives companies a huge amount of flexibility when it comes to working hours, essentially allowing them to operate 24 hours a day.

The Indian government is also extremely supportive of IT developments as it understands the potential of the IT sector to contribute to economic development. For this reason companies looking to outsource their IT tasks to India face few barriers and benefit from constructive government policies.

The list of business processes being outsourced to Indian is constantly growing, however back-office processing and customer interaction services are some of the fastest growing areas in the Indian BPO market. Other significant areas are content development, revenue accounting and medical transcription.