The act of contracting business process functions to a
third party, more commonly known as business process
outsourcing or BPO is an increasingly popular trend.
Today, many of the world’s biggest companies have
outsourced some of their activities, and most of them
find their way to the cities of India.
Business Process Outsourcing in India The BPO industry
in India continues to grow. Now known as “the back
office of the world”, India is home to outsourcing
firms of numerous Fortune 500 companies.
In the 1980’s, a number of European airlines had
established back offices in India, and this arguably
built the roots of what’s now one of the world’s most
active business process outsourcing industries.
Other companies soon followed. In the same decade,
American Express brought over its Japan-Asia Pacific
branch into New Delhi. In the 1990’s, General
Electrics also came to set up its back office in
India. Other well-known corporations that had
outsourced their various business needs to India
include Motorola, Standards Chartered Bank, Yahoo,
Dell, Cisco, and Delta Air Lines.
Cities with high BPO activity include New Delhi, the
country’s capital, Chennai, and Bengaluru. Due to
increasing infrastructure costs however, other cities
are slowly being developed to match the resources
provided by Tier I cities. Tier II cities include
Jaipur, Mysore, and Kochi.
Advantages of Business Outsourcing in India There are
various benefits that companies can enjoy if they
choose to outsource several of their activities to
Human Resources Labor is comparatively cheaper in
India than in Western regions like the United States
and key cities in Europe. The Indian labor force is
also well-educated and with varying skills and
talents. Neither does it hurt that Indians had long
been educated to speak English.
Pioneers in Software Development India is one of the
world’s pioneers in software development.
Multinational IT firms wouldn’t find it terribly
difficult to procure competent resources for their
needs in India.
Technology and Infrastructure The country’s government
is very much aware of the economic benefits offered by
the growing BPO industry. As such, they have been more
than willing in recent years to improve infrastructure
and technology in order to make their cities
well-equipped to handle just about any call center
need of multinational companies.
Problems Encountered by the Business Process
Outsourcing Industry in India Of course, the BPO
industry, just like other industries, isn’t free from
problems. One major problem is the high rate of
attrition. Many BPO firms are keen on addressing the
high rate of attrition in their operations. There are
various reasons why many employees are choosing to
leave their relatively high-paid jobs.
Many jobs in the BPO sector require employees to work
at night and while they are certainly well-compensated
for their efforts, this doesn’t negate the fact that
they’d have to stay up late for work and suffer
possible health problems due to their unusual work
Stress and pressure during work isn’t something to
scoff at either, and this is another reason why people
prefer to leave their jobs in the BPO industry.
Business Process Outsourcing in India Today Recent
news have predicted India to generate approximately 8
million jobs over the next decade from the BPO
industry alone. One-fourth of this figure will be
immediately taken up by Tier II and III cities in
Today, ninety percent of the BPO industry’s labor
force is situated in the country’s top seven BPO and
ITO cities. This however has produced problems like
oversubscribed universities, rising infrastructure
costs, and overburdened roads.
It is the country’s hope that Tier II and III cities
will soon be able to provide the requisite resources
so as not to put the growth opportunity in BPO to