The Hindu Business Line : High-end BPO set to grow; may outpace services biz

BACKED by a policy framework to provide impetus to the business process outsourcing (BPO) players and the creation of exclusive space for them to work, more global corporations are now zeroing on Hyderabad to locate their centres, with the latest among them being Bank of America through Continuum Solutions.

Notwithstanding the recent curbs on outsourcing, several American and European corporations continue to look to India to provide back-office work either on their own or under the BOT (build, own and transfer) model.

The trend indicates that the services scope has increased to high-end technical help desk to transaction processing to analytics from the initial call centre work. Significantly, more services firms are taking to BPO.

The Managing Director of ADP Wilco and till recently the President of Hyderabad Software Exporters Association (Hysea), Mr Shakti Sagar, told Business Line that the initial test phase was over and global corporations were taking decisions based on the advantages Indian centres would bring to them.

For instance, a US-based mortgage company gives the option to its subscribers to choose either to send the process work to India or to handle it locally in the US. The catch, however, is if it is in India this could be in real time and if in the US, it could perhaps take up to three days. And about 85 per cent pick the Indian option.

"The other heartening news is from the UK Government's announcement that it was considering moves to leverage India for their back-end work. The message is clear that companies and organisations decide from where to source based on the advantages they bring. The recent announcement by Bank of America, Google and Franklin Templeton reflect this sentiment," he said.

The Andhra Pradesh Government, which had announced a special policy framework for the ITES sector providing for incentives linked to the number of jobs created and reduction on stamp duty, has seen gradual but steady growth of BPO companies here. Given the current pace of growth, the ITES exports could far outpace the IT services business.

What started with GE Capital Services and HSBC Electronic Data Processing about three years ago has gradually caught up with many more global corporations, the latest being the Bank of America, which expects to induct about 1,500 people over the next three years and has begun recruiting. Not just the global MNCs, but several Indian majors are also looking at Hyderabad to locate their operations.

When asked to detail some of the latest trends, a senior State official refused to comment given the fact that the process of installation of the new Government was still under way. While requesting anonymity, he said the growth process initiated for the sector had gathered momentum and Bank of merica was among the latest to join Hyderabad along with Convergys and Google.

With many local players and the Mumbai-based K. Raheja in the process of construction of Mindspace, an exclusive property for the ITES sector, the stage is set for fast paced growth. Research studies by CB Richard Ellis and Cushman & Wakefield point to a more robust growth for realty offtake driven by IT and ITES segments.