Indian business process outsourcing firms faces new threats

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Indian BPO firms being positioned as the market leader for a long time; now faces fresh challenges from the new entrants. This is the news that is going on within the industry recently. The business process outsourcing firms in North America and India are found to face the increasing competition from the new entrants in the middle of the rising demand for the outsourcing services globally as indicated in a recent survey.

According to a survey conducted by the Off-shoring Research Network of the Duke University and the PricewaterhouseCoopers it was concluded that the global outsourcing industry is transforming itself at a fast rate. The emergence of the new service providers from all over the world and the efforts taken by the existing outsourcers to remain in competition is fast changing the market scenario.

Outsourcing companies in India and North America that have dominated the global outsourcing industry are slowly being challenged by the competition coming from Eastern Europe, Asia and Latin America covering diverse service areas. These include business process outsourcing, contact centers and information technology outsourcing as revealed in the survey.

Even though India is still counted amongst the market leaders, there are other emerging economies that are quickly looking to expand within this sector. The increasing competition has changed the face of the industry into a global race to go for the market share.

Success of India as one of the largest back office service provider has been successful in motivating other developing nations including under-employed and well educated population to look to duplicate their overall experience as suggested by Charles Aird-the Managing director of the Price Water Coopers.

Other facts unfolded

The survey also added the fact that about 16 percent of the Indian business process outsourcing providers will find competitors from the other emerging economies to be their greatest threat.

Out of the other emerging countries, China is one country making its mark felt in the market slowly. The Chinese government has already designated about 20 cities as the main outsourcing hubs with an effort to allure more of international investment. Another country that is slowly entering into the groove is Philippines. Philippines has been showing its potential in outsourcing activities and has declared outsourcing as one major industry.

The survey also revealed few more facts. As per the survey, about 62 percent of the service providers have the plan to develop the scale of the existing offerings. Moreover, the total numbers of the service provider who are planning to provide accounting and new finance; innovation services and human resources have also doubled from the earlier years.

It is through this survey that it was revealed that the 2009 economic crisis that reemphasized the significance of efficiency improvement and cost saving stood to be the 2 top most strategic reasons to carry forward BPO outsourcing, followed by the access to the qualified personnel. Additionally, the lack of any realistic outsourcing strategy and the growing client expectations were found to be the two top most reasons for the contract terminations. Last but not the least, the survey also revealed that near shoring has been gaining momentum amongst different companies considering or using services.

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