Challenges Faced by BPO Firms in India

It is a fact that India has been at the forefront of the BPO/Services revolution and its firms have garnered a huge chunk of the BPO/Services market. However, the firms that operate in the BPO space in India face their own challenges as far as the conduct of business is concerned. For instance, one of the foremost challenges that are faced by the BPO firms in India is the instability and the chaotic way in which infrastructure and logistics management is concerned.

The frequent power outages, poor traffic management, political instability in the form of strikes and shutdowns all take a toll on the operations of the BPO firms. Because the sector needs to work 24/7, it cannot afford any disruption to its service. Hence, the move by the BPO firms to lobby with the government on granting them the essential services tag so that they are not subject to the instability and can carry on their operations.

The next set of challenges deal with the increasing un-employability of the workforce. In previous articles we discussed how the ready availability of highly skilled resources is an advantage that India has. However, it is also the case that a majority of this resource pool does not pass the criteria for employment.

The point here is that it is not enough to have a million graduates graduating each year. Rather, the real test should be as to how many of them actually qualify for employment. Towards this end, the BPO sector is making efforts by roping in management institutes and technology colleges to partner with the apex IT/ITES body, NASSCOM to improve the skill set of the graduates and make them better suited for the kind of work that the BPO firms do.

Third, the way in which the BPO sector has evolved in India is mainly by doing low end work which is rapidly being threatened by new entrants like Philippines and other countries. This means that either the BPO firms cut their costs of resources or migrate to higher end work like the KPO or Knowledge Process Outsourcing. Again, the task here is cut out for the BPO sector and for NASSCOM i.e. to market the Indian BPO sector as being worthy of doing high end work and capable of innovation and other higher value chain activities. In short, these are some of the challenges that the BPO sector in India faces as far as its operations are concerned.

On the external front, there has been a hue and cry over outsourcing to India in the ongoing presidential campaign in the United States. This means that the BPO sector in India has to be extra vigilant to rebut the charges made by the politicians in the US and the UK.

The point here is that the BPO sector must not become a scapegoat in times when the US and the UK are in recession and so there needs to be aggressive lobbying taken up externally to counter these perceptions. In conclusion, as in life and so in business, nothing is permanent and hence the BPO sector in India should not be complacent and let events and circumstances pass them by.