Economic downturn will drive in more business to Indian BPO

The failing world economy is a matter of concern to the global business. Leaders of small and large business are struggling hard to weather the storm of economic uncertainty. The headlines of a recent article in The Wall Street Journal shows "Executive shift to survival mode" as the strategy for this economic downturn. The economic pressure has raised the demand for Business Process Outsourcing. The Research and advisory firm, Gartner, in one of its reports shows that by 2010, the Indian BPO companies are expected to double its market share. Indian BPO players, like, WNS, Genpact, Aditya Birla, Minacs have proved themselves as powerful opponent to Western BPO.

By the end of 2008, the leading 20 Indian BPO reported a revenue of $4 billion, which is 5 per cent of the $80 billion revenue of the major 150 BPO companies. Another report by IDC provides an in-depth analysis of the current trends and opportunities in BPO, with special emphasis on Finance and Accounting BPO. According to this report, the customer trend shows a clear preference for supplier consolidation that are found in multi-function full scale BPO, like Accenture, or IBM or the Indian counterparts, like Infosys, HCL or Wipro.

If properly used, BPO can be a great tool in helping company survive the economic downturn and then thriving when the climate calms. Let us take a look at the benefits of BPO and why it is sure to bring in more business during the economic downturn:

• Decrease in the pricing structure: With right scope and service level, a business can attain a significant reduction in its cost structure within two to three quarters by outsourcing to third-party outsourcing providers. The savings can be 30 to 60 per cent of the current cost base.
• Changes fixed cost to variable: During periods of economic uncertainty, the volumes of business changes and the key to better management is to align the volume of your business to its cost. An important feature in many of the BPO is Unit Transfer Pricing or UTP. In this kind of approach, transactions are priced on per unit basis.
• Retain Customer Focus: It is the customers that suffer the most when it comes to any kind of change; merger, down-sizing or change in market focus. Reduced employee headcount should not mean a drop in customer care service. Losing customers can create a problem of survival and existence for an outsourcing company. BPOs actually aims in improving customer care service, not only by maintaining customer loyalty, but also shaping customer revenue. By facilitating customer interaction, BPOs can add as much as 50 per cent increase in your total revenue.
• Transparent Cost Structure: Information is a valuable asset. This is all the more true for economic downturn. Knowledge of the actual cost of delivering business processes is important. The very nature of the work, eliminates guesswork providing clarity to the components of cost.
• Put more focus on knowledge: In challenging economic times, the knowledge of identifying the right fact is necessary. Who is the customer, what will he buy, when will he buy, how much will be the cost of production-these are all essential knowledge that distinguishes a survivor.