Business process outsourcing in India

The business process outsourcing industry in India refers to the Services Outsourcing Industry in India, catering mainly to Western operations of MNCs (Multinational Corporations).
The sector witnessed considerable activity during 2004–05, including a ramping up of operations by major multinational corporations players and Indian organizations stepped up hiring. The domestic BPO market, catalyzed by demand from the telecommunications and BFSI segments, matched the growth of BPO exports. The market experienced maturity and consolidation, a result of numerous mergers and acquisitions taking place within the sector. There were over 400 companies operating within the Indian BPO space, including captive units (of both MNCs and Indian companies) and third-party services providers. The key enabler for this has been cheaper bandwidth leading to low telecom costs for leased lines and availability of educated English speaking workforce in India.
The Indian BPO industry remains on a growth path, emerging as one of the key investment markets in the country.
It is also referred to as Information Technology Enabled Services or ITES, and high end work with specialisation is referred to as Knowledge Process Outsourcing or KPO. There are other variants in use such as Legal Process Outsourcing (LPO).
NASSCOM is a chamber of commerce that represents this body and lobbies for it, as well as creates a platform for members to take up common issues. NASSCOM services both the Indian Software and the Indian BPO industry.

History

Airlines

In the early 1980s several European airlines started using Delhi as a base for back office operations, British Airways being one among them. The BA captive was finally spun off as a separate organisation called WNS in the current millennium.

Amex

In the second half of the 1980s, American Express consolidated its JAPAC (Japan and Asia Pacific) back office operations into New Delhi. This center was headed by Raman Roy, and has been a source of several leading names in the Indian BPO Industry.

General Electric

In the 1990s Jack Welch was influenced by K.P. Singh, (A Delhi based realtor) to look at Gurgaon in the NCR region as a base for back office operations. Pramod Bhasin, the India head of G.E. hired Raman Roy and several of his management from American Express to start this enterprise called GECIS (GE Capital International Services). Raman for the first time tried out voice operations out of India, the India operations also was the Beta site for GE Six sigma enterprise. The results made GE ramp up their Indian presence and look at other locations. In 2004 GECIS was spun off as a separate legal entity by GE, called Genpact. GE has retained a 40% stake and sold a 60% stake for $500 million to two equity companies, Oak Hill Capital Partners and General Atlantic Partners.

Third party BPO's

Till G.E most of the work was being done by "captives"- a term used for in house work being done for the parent organisation. In 2000 Raman Roy and some team members from GECIS quit , and with VC funding from Chrysalis Capital started Spectramind. At the same time an organisation called EXL started in Noida and Efunds started in Mumbai and Gurgaon, and Daksh in Gurgaon. However, recently most of the Indian BPO's even smaller and mid-sized ones are actually setting-up their onshore presence. Most of the serious players are actually improving the outsourced business processes by leveraging on years of experience and now some of them are directly competing with their own older clientbase by marking this transition to KPO's.

Entry of IT majors

In 2002 Spectramind was bought by software major Wipro, and BPO by then had become mainstream like the IT Industry in India. The team that had setup Spectraming went on to start Quatrro in 2006, a BPO specialising in high end BPO/KPO services. By 2002 all major Indian software organizations were into BPO, including Infosys (Progeon), Inforlinx, HCL, Satyam (Nipuna)and Patni. By 2003 Daksh was bought out by IBM and later in 2006 MphasiS by EDS. Even international 3rd party BPO players like Convergys and Sitel had set up shop in India, swelling the BPO movement to India. Then service arms of organizations like Accenture, IBM, Hewlett Packard, Dell too set up captives in India.