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Big BPOs not lured by the domestic market
Published on Thu, Sep 04, 2008 at 23:18, Updated on Thu, Sep 04, 2008 at 23:35 in Business section
Tags: BPO, Business Process Outsourcing , Mumbai
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Mumbai: With the Rupee playing spoilsport and the US and Europe reeling under the sub-prime crisis, Indian b-p-o companies are tapping the domestic outsourcing opportunity in different ways.
Despite the bumps, the Indian economy is growing.
And so is the opportunity to outsource.
But for most companies into the Business Process Outsourcing (BPOs), the demand is to cut costs in a difficult environment.
So one would expect global BPO biggies like Infosys and TCS to go all hammer and tongs to grab a slice of the $ 16 billion plus domestic outsourcing pie.
Not true, say companies like Infosys BPO.
“We have been very clear, it has to be profitable growth. We do want growth but it has to be profitable. Also, we don't want to stretch our model too much by getting into the India business. That is because we know if we get into the India business it will be easy to generate the revenue, but how do you generate the profit?” asked CEO of Infosys, Amitabh Chaudhary.
Experts say, that question arises from the absence of wage arbitrage and the lack of Indian companies fully appreciating the benefits of outsourcing.
However, Tata Consultancy Services (TCS), which ventured into China and South America long before it became a trend, begs to differ.
“See, we have a small presence in BPO in domestic market. And when I say small, it is in single digit. We believe that if we put our mind to it, if we find the right solutions, then the scope is very large. So growth can be there but as I said, the important thing is that we need a resolve equations like cost and margins and other things like,” said Head, BPO Services at TCS, VK Raman
Sharing the view are BPOs like Genpact and WNS who recently announced efforts to concentrate on the Indian market.
There seems to be a clear difference in opinion between old rivals Infosys and TCS on the Indian outsourcing opportunity.
While Infosys won't get going unless it is profitable from day one, TCS is willing to invest in the long term despite not seeing immediate profits on the table.
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