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BPO Industry – What makes it possible?

by on Dec 28th, 2011 in BPO (3 Comments)

This is one very interesting question and if answered correctly would create enormous amount of faith in the strength and longevity of the industry. I have attempted to answer this in this post.

Every era has seen an industry take shape and move on to become very big. In the 60′s it was manufacturing since it was a supplier driven market where there were very few manufacturers and many takers. The 80′s saw the birth of the IT industry in our country the biggest names in the industry took birth then. The 90′s saw a major shift. The market became consumer centric. We had to access a larger variety of products with better features and at a better price. Thus distribution became the new money spinner giving birth to Walmart and Fedex as huge.

Towards the end of the last decade the world was faced with new challenges and every time there is a technology to overcome great challenges, new opportunities and trends are born, Let us understand which challenges emerged:

  • Product quality stopped being a market differentiator, hence creating price and freebies the only tool to sell. For example ten years ago very few PC manufacturers advertised price but today it is a norm.
  • Western companies went truly global by entering Asian markets hence becoming behemoths where each department became an organization in itself.
  • This created problems of focus on core competencies for all organizations.
  •  Skilled labor pool in the west reduced and hence became more expensive.
  • Customer loyalty reduced hence increasing churn

At the same time in our country something was drastically changing. We had access to new technologies like improved communication system and the Internet, which if used to address the above problem would create an opportunity and Yes it certainly did. A whole new trend called the BPO industry. India with its massive base of skilled manpower which largely studied in English used this opportunity to its best and the rest is history. The benefit it created for the western companies is as given below.

  • Focus on company’s core competencies
  • Achieve cost reductions
  • Improve service quality
  • Maintain competitive edge
  • Obtain outside expertise
  • Meet changing customer demands
  • Gain access to advanced technology
  • Achieve Revenue Enhancements

This has made it a process which is truly irreversible and has lest the west with no other option but continuously outsource more business and become more competitive. This is the reason that during worst times of the world’s economy, the process did not stop and hence the BPO industry kept growing. This is therefore also the reason that this industry would continue to grow hence creating the massive opportunity it promises.

3 Responses

  1. Thi Samway says:

    This is my first time visit at your site and i am genuinely impressed to read everything at a single place.

  2. I think you have remarked some very interesting details , appreciate it for the post.

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