When it comes to outsourcing, it's hard to see India as anything but the experts. The modern outsourcing industry took its first tentative steps there. And it was the nation where multinational companies first discovered that it was possible to offer quality, offshored service and make a saving on costs while maintaining quality. Indeed, as the pioneer, India is closely connected with outsourcing, even among consumers, and — despite the connection not always being positive — India continues to reap the benefits of being the first. “Even though competition has emerged around the globe, India had the advantages that came with having a mature sector and lots of experienced staff at every level. Other places and providers might have been able to learn from the pioneering call centers in India, but they did not have the deep domain expertise that India boasted,” says Ralf Ellspermann, CEO of PITON-Global, a leading call center outsourcing provider.
And those advantages benefit the sector in many ways. The growth of BPOs has meant that they form an essential part of the economy. “It's currently estimated that they contribute at least 8% of the nation's GDP. It is no small achievement in a country with 1.4 billion people, most of whom are still in rural areas and agricultural work. Indeed, collectively the BPO sector would be one of India's, and therefore the world's, biggest employers,” says Ellspermann. As well as creating a gravity, attracting more businesses to outsource there, it also attracts the attention and support of a government that is keen to safeguard the contribution that call centers in India make to the national economy. But while it might be dangerous to predict the end of India's domination of outsourcing, it is not all plain-sailing, and challengers are emerging.
The size that works to its advantage may also be one of its key disadvantages. There is evidence that the BPO sector is starting to push up against some limiting factors. One of the first is the Indian population. Although there are 1.4 billion people, the vast majority cannot work in call centers. Literacy rates are, by Western standards, very low, at just under 75%, with even fewer able to speak global languages fluently. The largely rural nature of the country may also hold it back, with the outsourcing sector starting to outgrow the well-connected urban areas and struggling to find other suitable locations that have the necessary communication links. “And some companies have started to change their outsourcing strategy, recognizing that geographical concentration presents a risk to business continuity, a significant problem that was highlighted when the coronavirus pandemic impacted many call center outsourcing providers,” says Ellspermann.
The result has been the emergence of serious competitors. One good example is the Philippines. Despite entering the global outsourcing market some twenty years after India, it made rapid strides, for example, relative to the sizes of the two nations. “The Philippines has also played to its natural advantages. Its historical links with the West, especially the US, mean that its education systems and culture are close to the West, and there is an exceptionally high level of English proficiency. It has been the leading global destination for call center outsourcing for several years, pushing India into an unfamiliar second place,” explains Ellspermann. India's position as the overall leader may not be under threat for some time, and as the global outsourcing market continues to grow, there is plenty of room for competition. But as the Philippines has shown, call centers in India cannot take anything for granted.
(Brand Desk Content)
