I recently participated in a BPO focused event and had some interesting discussions with industry veterans on how this sector has evolved over the past few years and the way forward. I have been a part of the IT and ITeS industry for over two decades now and I must say, the growth witnessed in these sectors has by far been phenomenal.
We can't repudiate the fact that the BPO (business process outsourcing) industry has underwritten the growth of the ITeS sector in India and we are among the pioneers of the world in this space. Our wide offerings portfolio, service quality, language competencies and labor arbitrage led value proposition in the BPO space has resulted in sustained high-growth rates.
If I look at the evolution of the ITeS industry from an Indian perspective, we are constantly moving up the value chain and now many of our services have a direct impact on the topline of our clients. The Indian IT-BPO sector has graduated from just being a cost saving engine to a stage where we are now working on a host of exciting research, knowledge processing and new products development projects helping our clients achieve significant competitive advantage.
However, the fundamental question that arises in my mind is- are we doing enough to sustain and leverage our dominance in this space or are countries like Philippines ready to bolster their position? Sooner than later we need to understand that our clients and potential buyers are looking for more value for their money spent and at the same time variabilize their costs. Therefore, our BPO offerings and pricing structures should align accordingly with the changing needs of our customers. Pricing models are especially relevant in the present era of resource constraints, as our clients seek more pricing flexibility.
Many of our projects with clients are based on risk-reward pricing models and/or profit sharing or share of costs saved pricing arrangements. As we move up the value chain and pursue more risky projects, this would be of particular relevance to our clients and is extremely important in building client confidence in our ability to deliver innovative services. The need of the hour is to focus on developing vertical expertise and competencies that can provide us with a competitive edge over other countries that are challenging our dominant position.
Hence, to sustain our dominance in the BPO industry, it is essential that we have the right blend of resources and infrastructure, vertical expertise, strong governance mechanisms, and innovative pricing models to establish our distinct value proposition.
Is the Indian BPO industry well poised to transform to meet the changing needs and expectations of clients and will it continue its growth story?