Source: www.indiainfoline.com

The domestic KPO industry needs to tighten its service level agreements to provide quality services and also needs to attract more revenue by entering into partnerships with big financial service organisations

Nearly 30% shortfall is likely in the Knowledge Process Outsourcing (KPO) business by 2012, which according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM) would stagnate at US$10.5bn against the projections of US$15bn mainly on account of lack of talented professionals in the absence of relevant institutions for imparting KPO skills in India.

Not only professional shortages of skilled KPO workforce would be acute by then but emerging competition from low-cost destinations of countries such as Philippines, Russia, China, Poland and Hungary would also hit domestic KPO prospects, warns ASSOCHAM.

In a paper on ‘KPO Industry in India’, the industry chamber has stated that the KPO industry would be able to sustain its current phase of growth of nearly 18-20%, with employment opportunities for 30,000 workforce and revenue generation potential of about US$3.8bn, provided institutions of repute are created so that new talent emerges to take on future challenges.

As per ASSOCHAM estimates, a vast pool of highly educated professionals in engineering, medicines, management, accountancy, company secretary and legal would be required to serve the KPO industry. Their number as per rough estimates should be well within the range of over one lakh as against the current numbers of 30,000.

According to ASSOCHAM, countries like the Philippines, Russia, China, Poland and Hungary are emerging as strong contenders for the KPO business in view of low-cost advantages, domain expertise, location advantage, sales and marketing capabilities and data compliance.

Appreciation of the Indian Rupee vis-a-vis US Dollar is gradually making Indian KPO companies less competitive, and with rising costs, their captive centers in India are also outsourcing some of their work to third party vendors.

The domestic KPO industry needs to tighten its service level agreements to provide quality services and also needs to attract more revenue by entering into partnerships with big financial service organisations, ASSOCHAM says.

While some of the Indian companies are coming out with the security framework which simultaneously increasing costs of industry and make them less competitive. Overseas clients often hesitate to offshore research and processing of sensitive financial data and information involving strategic decisions.

ASSOCHAM President Venugopal N. Dhoot says it is difficult for the KPO companies to always find a qualified, experienced and talented workforce in India which is easier for the BPO companies. Considering there is no dearth of engineers, doctors, MBAs, lawyers etc. in India, the KPO industry was banking on the availability of this talent pool to fill up its seats but now they are facing the supply crunch.

According to ASSOCHAM estimates, currently over 260 KPO companies are operating in India and the number can be reached at 350 by 2008 with employment opportunities for qualified professionals to the extent of 100,000. Some of the big companies like Genpact, Evalueserve, WNS, 24/7 Customer, EXL Service, Copal Partners, HCL Tech and Wipro are providing variety of KPO services.

However, the KPO sector has potential to attract career aspirants and professionals as the sector provides revenue higher than the BPO industry. The salary ranges are 12-15% higher than the BPOs industry and even the entry level earnings are more in it. A customer care office in KPOs can earn Rs1.5 to Rs1.7 lakh per annum while a technical support office can also earn the similar amount. The voice and accent trainer can fetch Rs2.25-2.50 lakh per annum whereas a team leader can earn around Rs3-4.5 lakh annually.

The ASSOCHAM analysis also predicts that KPOs has also other advantages like better work tools and processes, more sophisticated client centricity, higher billing rates and more domain focused organisations.

KPO is a quick-money sector and can also provides long-term jobs as well for the youths and professionals. Well-educated, knowledgeable, analytical and deserving candidates can make handsome money in this sector, far more than what is being paid in the BPO sector. Unlike BPO, a temporary enumerative option, professionals are taking KPO industry as a long-term career option.

KPO jobs are more challenging as it provides domain knowledge, business and process expertise with analytical skills for analyzing data, usage of resources for information research, making presentable reports from raw data. While BPO is about repeatable process which needs quick learning and have larger workforce base compared to KPOs. In BPOs, there is low involvement with clients and low hourly billing rates whereas in KPOs, there is a constant involvement with clients.

Source: tech.clickjobs.com

With the US market showing signs of saturation, India is keen to tap the vast business opportunities offered by Europe for the export of computer software and IT enabled services, the leader of an Indian industry delegation said here.

The 20-member delegation of chief executives and top-level managers of companies representing a cross-section of India’s IT industry has been exploring new business partnerships in the Netherlands, Belgium and Germany and is currently visiting Brussels.

“The German market so far has been largely unexplored by Indian IT companies and they should make serious efforts to enter the market and to consolidate their existing presence because the business opportunities in this country are immense,” said S R K Prasad, who led the delegation on a two-week tour said.

The time was very opportune for Indian IT companies to enter into outsourcing deals, joint ventures or other business tie-ups with German companies because they were showing a strong interest in cooperating with Indian companies in various sectors of the IT industry, Prasad, Managing Director of the Kasbah Systems Software in Coimbatore, told media.

The visit by the Indian IT delegation to Europe was organised by Electronics and Computer Software Export Promotion Council as a follow-up of India’s successful marketing campaign at the world’s largest computer and IT fair Cebit in Hannover in March.

The growing competition in the US market, continuing weakness of the US dollar and strong appreciation of the rupee were forcing Indfian IT companies to look for new markets for software products and IT services in Europe, Mangudi Subramaniam, Vice President of the Congruent Solutions in Chennai, said.

In Hamburg and Frankfurt, the delegation took part in business to business negotiations and buyer-seller meets hosted by the Indian Consulates there in cooperation with the ESC and visited some trade and investment promotion organisations.

As a result of their discussions, the Hamburg Business Development Corporation has shown interest to send a business delegation to India next year.

Germany is the third main market for India’s computer software and IT enabled services in the European Union after Britain and the Netherlands.

India’s exports to Germany went up by 45 per cent during the fiscal year 2006-2007 to $743.5 million from the level of $512.0 million in the previous year. However, the German market accounted for only about three per cent of India’s global exports of software products and IT services.

Indian IT professionals’ competence and their expertise in offering top quality software products and IT services covering the entire spectrum of IT industry are now widely recognised in Germany, Prasad said.

There is also a growing awareness among German companies that many sophisticated software systems and complex processes can be done in India not only at a much lower cost than in Germany, but also more efficiently.

Many German companies are also eager to regain the ground they lost to the Americans in the field of outsourcing software products and IT services in India.

Prasad said Germany offered excellent opportunities for joint ventures and other investments by Indian companies and the two countries could also collaborate in third country projects in Africa, Latin America, Eastern Europe and other regions.

Roderich Pilars de Pilar, an investment consultant in Cologne, said that the huge potential for expanding India’s software and IT services exports to Germany was evident from the fact that so far India had only about four per cent share of Germany’s annual spending of about $12 billion for offshore development of software products and IT services.

This was in sharp contrast to India’s about 40 per cent share of US market for outsourcing IT products and services.

A large part of Germany’s offshore IT projects are executed in Eastern Europe mainly because the companies there have the advantage of using German language for developing software and for communicating with their clients in Germany, Pilar said.

Subramaniam shared the view that the marketing potential in Germany for Indian IT companies was very large, but felt that language barrier was the biggest obstacle to enter the German market, especially to establish business relationships with small and medium-level companies.

But, this can be overcome by giving German language training for IT professionals at their production bases in India. His company has been doing this for some time and it yielded good results, Subramaniam said.

Rahul Sethi, CEO of the Integral Fusion e-Services in New Delhi, said his company has plans to open an office in Germany to tap the potential in the European markets.