India can retain leadership in KPO sector

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Chennai: Knowledge Processing Outsourcing (KPO), over which India's holds the sway with a potential 12 billion dollar market by 2010, is expected to grow despite global recession and the country could maintain its leadership in the KPO sector with stable government policies.

"India has competitive people costs which is sustainable at least for the next seven to ten years. There is an established ITES (Information Technology Enabled Services) sector with good management, plus a reasonable sized talent-pool of human expertise in many areas. All this coupled with fairly stable government policies could help India in its quest to maintain leadership in the KPO sector by a wide margin," Chandu Nair, President and Director of Scope e-Knowledge Centre, a leading KPO company, said.

According to an earlier estimate of National Association of Software and Service companies (NASSCOM), the apex business association, the KPO sector is expected to be worth USD 17 bn by 2010 of which USD 12 bn would be outsourced to India.

'Despite the recession in the US and UK/Europe, NASSCOM still feels that IT/BPO sector would grow in the FY 2008-09. There has been an impact on certain companies, especially those with clients predominantly in certain sectors – financial services – or high exposure to clients which have gone bankrupt,' he said.

Seeking to differentiate KPO and BPO, Nair said BPO is essentially process or rules based while KPO is more expertise or judgment based.

Asked about the competition, he said India's key competitors in the KPO domain are Russia, China, Ireland, Israel, Philippines among others. The competition for India could vary depending on the nature of work.

"For instance for certain kinds of foreign language oriented services, locations in Eastern Europe or South America are favoured. Russia and Israel have scientific talent pool to provide certain specialist KPO services. The major challenge for them as also for say, the Philippines, Ireland is that the talent pool is much smaller while for China and Russia, non-English speaking population is relatively small."

About the scenario five-ten years hence, he said the KPO sector has the potential to grow faster and bigger and create more jobs.

'There is certainly a challenge in terms of availability of certain skill sets and basic employability of fresh graduates which hits small and medium sized companies,' he said.

NASSCOM has embarked on some initiatives with respect to improving the skills and is working closely with the government, he said.