ICMR (IBS Center for Management Research).
The 'International' Issue
The latest addition to the basket of woes of the BPO players is the hue & cry on outsourcing to India by the labor unions in the UK and the politicians in the USA. In the UK, the call center industry employs nearly 800,000 British workers and is a vital part of their economy. Labor unions are playing the card of 'patriotism' to stop UK based companies from outsourcing their back-office operations to India. The fact that it is election time in the USA and perhaps in the UK too, has added fuel to the fire. The media, the unions and the politicians in these countries have jumped on the 'backlash' bandwagon and have been making strong statements on outsourcing to India. However, there have been some rational-thinking bigwigs who have been opposing this backlash. The issue is expected to cool down slowly, with the elections getting over and better business sense prevailing over the outsourcing companies. The Indian BPO industry can also launch a friendly and soft campaign against the backlash, explaining the advantages of outsourcing, especially to India.
Many competitors like Philippines, Ireland and even China are expected to catch up with India in the future, but they have their own constraints. China, which is being forecasted by some as the biggest threat to the Indian BPO industry, for example does not have English-speaking populace who can meet the requirements of a primarily English clientele. India outruns all its competitors when it comes to availability of quality services at the lowest possible rates. However, this does not mean that the Indian BPO industry can sit back and relax. It needs to gear up and prepare itself to face the competition. The strategy of the Indian industry should be to go up the value chain and offer more specialized services that can create a special position for it in the global outsourcing industry. It should not completely bank on the low-end services as they are cost-based and can be transferred to any country that offers the same services at a cheaper rate.
The Indian ITES industry should consolidate its position in the business of outsourcing by strengthening its domain knowledge and becoming more specialized in terms of the services offered. It should aim to go up the value chain without restricting itself to low-skilled jobs. It has to continuously strive to maintain its position of competitive advantage over other countries in the fray, in terms of low costs, quality people and conducive environment. It should also realize that unhealthy practices within the Indian industry can affect its competitiveness in the global BPO arena and therefore curb such practices. With the international business world eyeing India as a hot ITES destination and the Indian industry gearing up to bring in a new revolution, India is bound to become the BPO and ITES hub of the world.
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