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So long as a cheap workforce with the requisite language abilities and skills can be found or created, this is an opportunity waiting to be exploited by developing countries.

It is true that a developing nation like India has certain specific, historically determined advantages, such as English language abilities that serve it well in the principal outsourcing market, the US; a large pool of educated and, in many cases, professionally trained manpower; and, above all, an autonomously evolved software services industry base.

However, even in countries without these advantages, other capabilities can, if combined with national government and international support, be used to win them a slot in the BPO-ITeS space. The hiving off of large chunks of crucial business process to be outsourced is a real, as opposed to a hypothetical, possibility in so many industries that one can expect the market to grow to a size that is large enough to benefit a reasonable number of developing countries.

The core BPO market, as per predictions will grow to only $145 billion by 2008. This is because firms looking to outsource core business processes such as human resources, and finance and administration because of significant cost savings, are not only reporting inability to find a single vendor who can manage such complex offerings, but also as being stalled by inflexible contracts, difficulty managing vendors, and a lack of performance metrics.

As a result, the market is likely to fragment into four segments: simple bulk transactions, such as credit card or stock trade processing (estimated $58 billion in 2008); broad shared services, such as finance and administration, indirect procurement, and HR ($57 billion); high-volume vertical processes, including policy administration, claims, and loan process applications ($6 billion); and, niche vertical applications, such as environmental data reporting and chemical process control monitoring ($24 billion).

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* Contributed by: -
Priyanka Ghosh & Alvika Derhgawen,
PGDIM, IM-11,
NITIE, Mumbai.