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Home > Business > Special


The milch cow for Indian KPOs

Arati Menon Carroll | March 08, 2006

Kami Narayan and Kapil Vishwanathan, MBAs from Harvard, rejected stock career opportunities to start their own publishing outsourcing firm in Chennai in 2005.

Narayan, co-founder, PMG Beacon says, "We were clear about two things - we wanted to be part of a start up and we wanted a cross-border business that would leverage our experiences in both countries." Publishing outsourcing was just getting noticed in 2005. The duo, who are also siblings, decided this was the perfect opportunity.

Publishing services that are offshored today range from editorial and project management, to illustration, proofreading, page composition and layout. Sourav Mukherjee, CEO, Netscribes, prefers to call it content management. "Publishing indicates a media or publishing client. However, you could be compiling a report for an FMCG, or managing web-based content for a glass manufacturer," he says.

According to Mukherjee the bulk of the outsourced work is still pagination, data tagging and conversion, but Naveen Seshadri, marketing head, Overleaf publishing, says: "Earlier we seemed to get nothing but pagination jobs in India, but now we do our own content development as well as copy editing."

An Evalueserve report reveals that the Indian KPO sector, with revenues of 0.72 billion in 2003, accounted for 56 per cent of the global KPO sector. This share of the Indian KPO sector is expected to increase to 71 per cent of the global KPO sector, with revenues of $ 12 billion by 2010. The remote education and publishing vertical is expected to account for 12 per cent of the estimated opportunity.

For Datamatics Technologies, revenue from the content vertical - which includes the publishing vertical - has risen from Rs 389.93 million in FY04 to Rs 636.89 million in FY05. "The value potential of the vertical is astounding," says Mahesh Zurale, president and COO, DTL.

Robin Lloyd, vice president, Worldwide Solution Development of the $400 million Lionbridge technologies that set up Mentorix - its publishing outsourcing platform in India in 2003 - says the international market for e-learning is expected to grow to from $6-7 billion today to $20 billion by 2008-09.

Alok Shende, ICT Practise, Frost and Sullivan, says, "The investments in publishing outsourcing are inclined more toward conversions in case of smaller firms and more in e-learning development in case of large publishers."

In three years, Hurix, an e-learning company, has cornered $ 1.25 million in revenue from its education and publishing vertical. Harish Iyer, associate vice president, Business Development states, "Clients are consolidating their vendor lists so we're putting resources and infrastructure in place to gear up to provide end-to-end solutions."

PMG Beacon, which merged with Beacon Publishing Services late 2005, is able to offer a production centre in Ohio and Chennai, managed equally by Americans and Indians. "There are certain services that are better done onshore, like editorial work and project management, and certain services that are better done offshore like composition and layout. We wanted to offer a seamless complete service," explains Vishwanathan.

Evalueserve estimates the number of jobs in the KPO space will increase from the current 25000 to more than 250000 by 2010. However, it's not always easy finding skilled employees. A recent NASSCOM release quoted Ranjit Singh, President and CEO, Techbooks, a major player in the e-learning and publishing vertical, as indicating there is a chasm between the demand for people proficient in programming languages like Quark and XML and the number available.

Mukherjee corroborates, "Kiran Karnik's prediction of a knowledge-based labour shortage in 2008 is not off the mark."

Vishwanathan indicates that in hubs like Chennai, attrition is high. There are a few innovative ways of handling this. Datamatics, for instance, pre-empted the labour shortage and distributed its workforce across geographies. Out of a 2000-strong workforce, almost 50 per cent are part-time home workers.

However, most are forced to use remuneration to retain. According to Viswamitra Hariharan, chief operating officer, Hurix, salaries across the company have been hiked above the 15 per cent indicated by NASSCOM.

By FY 2010, it is estimated that India might become too costly to provide low-end, volume driven services at competitive costs and therefore, which may move to relatively cheaper locations in Eastern Europe, Malaysia and China. Sustainability will lie in bridging multiple domains and offering a matrix of services.

Hurix is exploring the potential in animation, stimulation and media services. Techbooks has acquired Maximize Learning an e-learning company in Pune. Hariharan explains, "Ultimately, clients are looking for long term partners with depth of business, a strong balance sheet, and established infrastructure."

According to Mukherjee the industry will witness large consolidation activity over the next three years - between small and large KPO players, between till now separate verticals like IT-ITES and KPOs to integrate services, and also internationally, to create a global presence.

Eventually though, according to Ashish Gupta, COO and country head (India) Evalueserve, front-end and back-end operations - BPO and KPO as we define it - won't exist anymore. It will all be about integrated services and global delivery platforms.

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Sub: KPO .

Hi, I am Ilyas khan . Prsently working in infosys BPO,Bangalore. I have done my post graduation in biotechnology.Its always great to know that KPO ...


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