Indian outsourcers seek revenues from 'smart work'

September 7, 2011 by Penny MacRae
Indian staff working at a call centre in Gurgaon on the outskirts of New Delhi in 2008. India, known as the world's largest back office with its cheaper, educated English-speaking workforce, is expanding its "knowledge processing outsourcing", offering market research, statistical analysis, legal, health and a host of other services.

For advertising executive Govind Nair, working in India's outsourcing industry for a California telecoms firm means burning the candle at both ends for his customers.

"They try to be considerate. They know there's a 12-and-a-half-hour time difference between India and San Francisco but we still end up getting up early and going to bed late," Nair, 30, says.

Such hours are becoming increasingly routine for many young Indian professionals as they liaise with counterparts in the and other on high-end "smart work" projects.

India, known as the world's largest back office with its cheaper, educated English-speaking workforce, is expanding its "knowledge processing outsourcing", offering market research, statistical analysis, legal, health and a host of other services.

The sector -- familiarly known as KPO -- "is the next wave of global sourcing for India", Som Mittal, head of the National Association of Software and Services Companies (Nasscom) told an industry conference last week.

Performing "value-added tasks" such as writing equity reports and legal work can mean 40 to 50 percent higher billing rates than for lower-value jobs in call centres fielding inquiries about bank accounts, industry officials say.

KPO revenues have been growing at 26 percent annually according to research house Crisil, outpacing the overall expansion of the flagship that has helped make India an powerhouse.

The country now has 70 percent, or $2 billion, of the $2.9 billion global KPO industry, Crisil says. North America provides 65 percent of the sector's revenues, Britain 20 percent and 10 percent.

Nasscom believes the fresh economic troubles in Europe and the United States may accelerate KPO sector growth as Western firms seek to harness the technical and financial expertise of India's supply of university graduates, lawyers, accountants and MBAs.

"India has a tremendous advantage in its technical, analytic and managerial skills," Matthew Vallance, chief executive of one of India's biggest back office companies, Firstsource Solutions, told AFP.

The $2 billion is still a fraction of India's overall outsourcing revenues, expected to total $68 to $70 billion this year. But Crisil forecasts in a new report that revenues from outsourcing knowledge-intensive skills will nearly triple to $5.5 billion by the end of 2015.

"India is moving up the value chain," said Crisil chief executive Roopa Kudva, noting Indian lawyers now research case law and put together arguments to be presented in court in the United States, Britain and elsewhere.

Bankers prepare papers for acquisitions, while nurses monitor the condition of housebound patients in the West.

Doing value-added work has become increasingly important for India as it seeks to preserve its overall global outsourcing dominance, especially after ceding its crown as the world's leading call centre hub to the Philippines.

Last December, the Philippines, which also has a trained, English-speaking workforce with a strong service culture, edged past India to become the largest call centre operator in the world, logging $5.5 billion in annual revenues compared with India's $5.3 billion.

"India is still ahead (in total offshoring), although other offshoring sites like the Philippines and Indonesia are emerging," said Tervinderjit Singh, a research director at global consultancy Gartner.

"But these countries are still not mature enough in high-level professional work which India can provide," he said.

Explore further: KPO: India's new knowledge business

Related Stories

KPO: India's new knowledge business

November 29, 2005

Patricia Hill lives in Freemont, Calif., and the mother of 14-year old Clark who is preparing to take his math challenge test soon was a harried parent until recently. Clark would often come up to her seeking help for math ...

Challenges ahead for India outsourcing

December 14, 2005

Although the latest Nasscom-McKinsey study on India's information-technology and business-process outsourcing projects a scorching 25-percent growth a year for the next five years, it adds that achieving that growth isn't ...

India outsourcers angered by US job visa hike

August 14, 2010

India's flagship outsourcing industry reacted angrily Saturday to a new US law tightening security at the Mexico border with measures paid for by steep hikes in American work visa fees.

India outsourcers predict 18% growth

August 23, 2011

India's flagship outsourcing sector is still expected to post 16 to 18 percent export revenue growth, despite fears of a fresh slump in its key US and European markets, an industry body said.

Recommended for you

Interactive tool lifts veil on the cost of nuclear energy

August 24, 2015

Despite the ever-changing landscape of energy economics, subject to the influence of new technologies and geopolitics, a new tool promises to root discussions about the cost of nuclear energy in hard evidence rather than ...

Smart home heating and cooling

August 28, 2015

Smart temperature-control devices—such as thermostats that learn and adjust to pre-programmed temperatures—are poised to increase comfort and save energy in homes.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.