Source: internetcommunications.tmcnet.com

In the world of offshore outsourcing for contact center operations, India remains a key player as it provides educated and skilled workers at a fraction of the cost of employees based in the US or the UK. India also offers one of the lowest wages for contact center workers throughout the world.

Although the country dominates in low cost labor, changes are on the horizon. For those organizations that selected India based on this factor, these changes could play greatly into their global strategy and whether or not their contact center operations will remain in place.

According to a recent study by Dunn & Bradstreet, rising salary levels remain the biggest concern of the IT-enabled services (ITeS) and BPO industry in India. These are followed by the rising rupee and skilled manpower shortage.

This survey, which covered more than 200 ITeS and BPO companies in the country, including captives, third-party vendors and Indian subsidiaries of multinationals, found that the majority of companies cited rising wages as most likely to affect future growth.

Labor attrition was also cited as an issue in this survey. Roughly 51 percent of respondents felt that the attrition rate will continue to be over 20 percent. Such a high rate can greatly impact the potential cost savings a company sought when establishing operations in India.

According to this survey, both captive and third-party players expect to see a more than 20 percent growth in the next two years. While 71 percent of captives expect this growth in excess of 20 percent, around 60 percent of third-party vendors agreed with that estimate. Another 24-25 percent of captives and third-party vendors agreed on a 15 to 20 percent growth rate for the next two years.

The most popular services, with a 26 percent share, appeared to be traditional outsourcing areas like customer care, inbound-outbound voice, contact centre, e-CRM and telemarketing services.

Data capture and management remained the single largest business line with a 9 percent share. KPO services, encompassing market analysis, business research, strategy consulting and retail analytics, made up 10 percent of the services rendered by the surveyed companies.

“As per D&B estimates, the Indian ITeS-BPO industry revenue could reach $23.7 billion by FY10, assuming the rate of growth to be the same as experienced over the last four to five years,” noted Dunn & Bradstreet India president and CEO, Manoj Vaish in a company statement

“However, some moderation to this growth could come from the stronger rupee, which may be inevitable in the current scenario, and is likely to persist for a while.” The survey also found low seat utilization by the industry at 1.3, indicating that the industry has the ability to leverage existing opportunities.