KPO firms dont lose heart despite Wall Street woes

Written by Rupsa Ray | Mumbai, Sep 28 | Updated: Sep 30 2008, 04:14am hrs
The Wall Street collapse will take the most toll on the knowledge process outsourcing (KPO) business in India , according to industry experts, but firms are optimistic that the meltdown will still create opportunities for outsourcing. The filing of bankruptcy by investment bank Lehman Brothers has hit its KPO services provider eClerx Services, hard. The KPO firm earned around 13% of its business from Lehman Brothers.

Lehman Brothers was one of our top five clients, and their collapse will definitely affect the business in a negative way. But it will be a short-term affect, commented PD Mundhra, executive director, eClerx Services.

Mundhra also added that the fall of such investment firms are more like to affect KPOs rather than the business process outsourcing firms (BPOs).

Since investment banks are more likely to work with KPOs. In such a cenario, KPOs are more likely to get affected, said Mundhra. However, according to an industry analyst, things are not as gloomy as they seem to be.

The service providers dealing with the investment firm will definitely be affected. But on the other hand, if the company gets taken over by someone else, the same businesses would need to be dealt with.

Hence, the KPO and BPO services will be required as before. Whether the projects stay with the same service provider or go to competition is a different issue, commented the analyst. The outsourcing work will stay, only it might go to some other provider, he added.

eClerx is hopeful that the buyer of the US business of Lehman Brothers will continue with eClerxs services.

We are hoping that the buyer of Lehmans US business will continue with our services. Well come to know about the situation in a couple of weeks, said Mundhra.

Industry experts are also hopeful that during such a financial meltdown, outsourcing assignments are more likely to increase as the companies overseas are keen about cost cutting.

During such a financial turmoil, companies will be looking at every opportunity to save cost, since this is the time where more and more work should be outsourced, commented an analyst.