BPO industry may clock 12-15% growth in FY14

Written by Debojyoti Ghosh | Debojyoti Ghosh | Mumbai | Updated: Feb 16 2013, 19:39pm hrs
The $20-billion Indian business process outsourcing (BPO) industry is expected to clock a double-digit growth, around 12-15%, for the financial year 2013-14, driven by high-end transformational services, according to industry experts. BPO companies are betting big on areas like banking, financial services and accounting, supply chain and healthcare to drive its next phase of growth.

In the global BPO sourcing market, Indias share is pegged at about 37%. The sector employs close to a million people currently. Outsourcing majors like EXLServices, WNS and Genpact are confident of growth in the range of 12-16%, surpassing Nasscoms 12-14% forecast for the IT-ITes industry.

According to Rohit Kapoor, CEO of Nasdaq-listed EXL Services, the industry will record a mid double-digit growth, between 12-15%, in the next fiscal. Our business growth over the last 5 years has been in excess of 25% per annum on a CAGR basis. Going forward, we will be looking at growing our business both organically as well as inorganically. We are trying to grow our business 15% organically and then complement that by another 10 percentage points of inorganic growth, said Kapoor on the sidelines of the Nasscom India Leadership Forum 2013.

Pramod Bhasin, non executive vice-chairman, Genpact, feels the growth in the Indian BPO sector should be in the range of 13-16% as the demand for the industry will continue to grow. We are delivering a level of expertise now that companies value. Penetration level of this industry among customers is still low.The sector might have some ups and downs, but demand will continue to grow, he added.

As the business dynamics of the outsourcing industry is changing, experts point out that companies have managed to articulate the differentiation of services and positioned themselves as high value-added services provider. We are in the BPO business for years and know the right way to do it. We just need to scale up and better our services. We employ 1,500 chartered accountants, underwriters and analytics professionals and no automation can take those jobs away, says Bhasin.

According to experts, companies are taking the buyout route to acquire capabilities. EXL Services, for instance, acquired Landacorp, a healthcare technology solutions provider with over 50 million customers. Its flagship suite integrates policy administration platform integrating insurers internal and external data. Similarly WNS, the Mumbai-based NYSE listed firm, last year acquired a South Africa-based BPO firm, Fusion Outsourcing Services.