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Small BPOs seek business online

March 28, 2008 09:54 IST

Indian business process outsourcing firms are making their presence felt through the Internet. Consider this: Asfaq Shiliwala, Managing Director, Transform Solutions, has never travelled to the US to sell the Indian IT success story.

But his Surat-based company has worked with over 250 clients in that country. Shiliwala serves all his clients online and has grown from five employees in 2000 to almost 190 today. His company earns revenues of around Rs 600,000 a month.

"We provide administrative services to customers in the US. If the project is on an hourly basis, depending on the work, the minimum charges range between $3 and $4 per hour," says Shiliwala.

Transform Solutions is just one of the 4,000 Indian service providers on Elance.com -- a business-to-business work-on-demand portal that caters to small- and medium-enterprises (SMEs) across the globe. It acts as a site on which people who have work post their projects and service providers bid for them. It primarily caters to the SMEs across the globe.

About half the service providers are from the US, and the other half are from the rest of the world. Of this, India is one of the largest-growing service providers at least in terms of payments. Elance's payments to India were 40 per cent of the total pie.

Other than Elance, Indian service providers are also present on sites like Guru.com and Odesk.com. Both the sites boast of over 14,000 Indian service providers.

About 140,000 projects were posted on US-based Elance in 2007 -- a 54-per cent rise on an annual basis. For instance, Guru.com has 4,972 active Indian freelancer profiles on their site.

"The trend of the market has shifted to include larger numbers of non-US based freelancers. In 2004, only 15 per cent of freelancers on Guru.com were non-US based. In 2008, nearly half, 43 per cent are located outside of the US. Indian Freelancers have maintained a similar growth pattern on the site. In 2004, Indian freelancers made up for 8 per cent of the total amount of money transacted through Guru.com. In 2008, they make up 19 per cent of the total money," says a spokesperson from Guru.com.

Agrees, Josh Breinlinger, director marketing, Odesk.com, "On an average, about 1,400 new providers from India are added every month. We have witnessed concentrations of providers in certain cities where there are a high number of providers." India tops the list in the number of assignment, with 4,994, being done on Odesk.com.

Another success story in this business is Mumbai-based Grey Matter India (GMI), providing software services. While the company had a few Indian clients, it wanted to cater to customers in the overseas market but didn't have enough funds to do so.

Initially the company would get projects in range of $500 to $1,000. "Today we only bid for projects in the range of $70,000 to $150,000 and charge $20 to $25 an hour," says Chintan Shah, CEO and President, GMI. The company is a subscriber on Elance.

While 30 to 35 per cent of the business still comes from Elance, the company has been able to establish relations with earlier customers who choose to continue work with GMI and contribute 20 to 25 per cent in revenues.

Fabio Rosati, President and CEO, Elance, is bullish about the way Indian service providers have taken on the web.

"The US has about 25 million SMEs, and it is a market with a potential opportunity of $250 billion. If you look at countries like Germany, almost 70 per cent of the economy is SMEs."

Rosati feels that a lot of work will happen in the virtual systems. Moving ahead, Elance will focus in creating a university catering to next generations of service providers and buyers; create testing tools and a community development for increased usage of Elance services.

All these sites charge a subscription fee. While Elance charges a monthly fee that ranges from $10 to $30 per month, Guru.com freelancers pay 5 or 10 per cent of the total project payment value, and Odesk takes 10 per cent of the total charge that it facilitates.

Shivani Shinde in Mumbai
Source: source
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