BPO industry still needs nurturing

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: Say BPO and usually the first set of images that flash through the mind are Gen-X youngsters working in swanky hi-tech offices, with lavish canteens and a fleet of air-conditioned cabs ferrying them around town and the outskirts at odd hours. It is easy to think BPO-owners are quite like King Midas of our times. After all, if they can offer all those facilities and pay packets to entry-level employees, it’s not hard to imagine them making big profits. Right? Wrong. Contrary to general perceptions, the BPO industry is at an inflection point from where it is about to tip down. A large number of entrepreneurs have closed shop because of huge operational losses.

It happens with almost every industry that in a nascent stage, a large number of players jump onto the bandwagon. As the industry matures, some of them survive while the rest eventually die out in the cut-throat competition. That has happened to the BPO industry in India as well.

Added to this is a long list of woes: over- dependence on North American and European mid-rung markets, crippling effects of the sub-prime mortgage crises, rupee volatility, rising inflation, soaring fuel prices, intra-industry attrition, looming taxes, global warming and an ill-informed and non-sensitised government machinery.

What rub salt into the wound is that outsourcing has not been allowed to mature into an industry. It has always been viewed as a part of IT and termed as “ITeS”—an acronym for IT-e nabled Services. This ITeS is a funny term, as in the 21st century there is hardly any business that is not ITeS. Even households are ITeS today with everyone extensively using phones, computers, laptops, the Internet, broadband and so on, both for work and play. It is beyond explanation why BPOs have been given this exclusive (dis)privilege of being called as ITeS?