Challenges Faced by BPO Firms in India
February 12, 2025
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In recent years, the BPO phenomenon has accompanied the increasing globalization of the world economy and has spawned a shift in the way the United States and Europe view the developing countries of the East. For instance, the increasing movement of companies wishing to outsource their back office work to India and Philippines has meant that the people in the West have a favorable impression of the work ethic and professionalism of the Asian countries.
Of course, with the first wave of outsourcing in the IT industry and the manufacturing companies to India and China respectively had done their bit to alter the perceptions of the West towards the East. What has added further emphasis to the way in which the Westerners perceive the East, has been through the BPO phenomenon which has demolished several stereotypes associated with Asian countries.
The other aspect of the BPO phenomenon is that increasingly countries in the Asian hemisphere are moving up the value chain as far as performing work related to back office operations are concerned. This has resulted in greater accent on doing high end work and given the number of patents being filed on behalf of technology and KPO companies has meant that the East is no longer the laggard that it was and instead, it competes on even keel with the West.
It is indeed the case that even in earlier decades; research and development were being done from South Korea and Singapore (to name a couple of countries). However, India and China were considered to be forever beset by increasing population and lack of resources. It is to the credit of these two countries that they are being talked about in serious terms by western companies.
The third aspect of the BPO phenomenon is the increasing confidence with which the Indian and other Asian countries have succeeded in nurturing a class of professionals who are confident and feel empowered enough to think big.
Indeed, the youthful composition of the workforce is what India and China have as their advantage. In the previous paragraph, we mentioned how India and China were burdened with growing populations in earlier decades. Ironically, it is these very drawbacks that have now turned the tide in favor of these countries and this is indeed a spectacular achievement.
Finally, the BPO phenomenon has also resulted in India adding substantial amount of Dollars to its foreign reserves which is indeed another feather in its cap. Given the recent slide in the value of Rupee, it would be prudent to say that the BPO companies would be the winners because it increases their competitiveness and at the same time translates into higher rupee earnings.
All these developments indicate that the power is shifting to the East as far as competitiveness and efficiency are concerned. It is no longer the case that the East is a land of mystics and now it is the case that these countries are powerhouses of manufacturing and services.
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