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India tops in offshore BPO service

July 10, 2003 15:40 IST

India has been named as the top country for delivery of offshore Business Process Outsourcing services among large companies, by market research company Gartner, who went on to predict that India's revenue from BPO will grow from slightly less than $1 billion in 2002 to $1.2 billion in 2003.

That would represent 66 per cent of the offshore BPO market, Gartner added.

Online CNET specialising in technical information reported that the amount that American companies spend on farming out business tasks to foreign countries, including India, will jump 38 per cent to hit the $1.8 billion mark this year.

The market for Business Process Outsourcing in 2003 will see better growth from the $1.3-billion mark it touched in 2002, the report quoting data from Gartner said in New York on Thursday.

Still, the offshore BPO market will make up just 1.5 per cent of the total BPO market this year, Gartner predicts.

CNET quotes Gartner analyst Sujay Chohan as saying countries including Poland, Russia, the Philippines and Sri Lanka are also gunning for a share of the BPO business.

"Although India dominates the market today and for the near future, Indian service providers should not get too complacent as other English-speaking nations across the world are ramping up their delivery capability and putting into place aggressive investment-friendly policies to attract BPO investment," Chohan said.

Another analyst Rebecca Scholl says "If enterprises that have been developing offshore sourcing strategies over the last few months successfully conclude pilot projects, the growth in offshore BPO during the next couple of years will be significant, as a result of contract expansions and new adopters."

Moving work overseas has appealed to some corporations, partly because of low salaries in countries such as India, the Philippines and Mexico, CNET said. 

US-based organisations that offer information technology services, such as Electronic Data Systems and computer sciences, have been eager to take on BPO work as IT spending has flagged.

According to Gartner, more than one-third of companies with more than 1,000 employees obtain offshore BPO services from US-based BPO providers.
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