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Operations Article | Key Operational Challenges in ITES-BPO Industry

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Key Operational Challenges in ITES-BPO Industry

- by Vibhor Mittal & Surya Kiran Sharma *

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Competitive Prices

Cost of qualified personnel is amongst the lowest in the world in India. Data monitor, a leading UK-based business information company, research indicates that 67-72% of costs to call centers operating in the US/UK are directly linked to man power costs. India, on the other hand spends only 33-40% of costs on man power. This includes training, benefits and other incentives for labor. The cost advantage can be better illustrated through the following table:

Comparative Cost per Employee

US $ FTE (Full-Time Employee) United States India India as % of US Costs
Personnel 42,927 6,179 14%
G&A Expense 8,571 1,000 12%
Telecom 1,500 2,328 155%
Property Rentals 2,600 847 33%
Depreciation 3,000 1,500 50%
Total Expenses 58,598 11,854 20%

* Source: Industry Sources, Merill Lynch 2003 (From the Nasscom Strategic Review 2003)

Excellent Infrastructure & Technology Support

India has got a robust infrastructure (telecom, power and roads). The Government of India has realized that telecom facilities are an important pre-requisite for the success of the software industry and has taken several steps to ensure that telecom remains a priority area. Similar attention has been laid on providing regular, reliable, uninterrupted power.

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* Contributed by -
Vibhor Mittal & Surya Kiran Sharma ,
2nd Year Students,
Shailesh J Mehta School of management, IIT Bombay.


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