Monday, August 9, 2010

KPO Industry will Grow Despite Downturn

Knowledge Processing Outsourcing (KPO), over which India holds the sway with a potential $12 billion market by 2010, is expected to grow despite global recession and the country could maintain its leadership in the KPO sector with stable government policies.

"India has competitive people costs which is sustainable at least for the next seven to ten years. There is an established ITES (Information Technology Enabled Services) sector with good management, plus a reasonable sized talent-pool of human expertise in many areas. All this coupled with fairly stable government policies could help India in its quest to maintain leadership in the KPO sector by a wide margin," Chandu Nair, President and Director of Scope e-Knowledge Center, a leading KPO company, told PTI.

According to an earlier estimate of National Association of Software and Service companies (Nasscom), the apex business association, the KPO sector is expected to be worth $17 billion by 2010 of which $12 billion would be outsourced to India.

"Despite the recession in the US and UK/Europe, NASSCOM still feels that IT/BPO sector would grow in the FY 2008-09. There has been an impact on certain companies, especially those with clients predominantly in certain sectors - financial services - or high exposure to clients which have gone bankrupt," he said.

Seeking to differentiate KPO and BPO, Nair said BPO is essentially process or rules based while KPO is more expertise or judgment based.

India's Competitors

Asked about the competition, he said India's key competitors in the KPO domain are Russia, China, Ireland, Israel, Philippines among others. The competition for India could vary depending on the nature of work.

"For instance for certain kinds of foreign language oriented services, locations in Eastern Europe or South America are favoured. Russia and Israel have scientific talent pool to provide certain specialist KPO services. The major challenge for them as also for say, the Philippines, Ireland is that the talent pool is much smaller while for China and Russia, non-English speaking population is relatively small."

About the scenario five-ten years hence, he said the KPO sector has the potential to grow faster and bigger and create more jobs.

"There is certainly a challenge in terms of availability of certain skill sets and basic employability of fresh graduates which hits small and medium sized companies," he said.

Nasscom has embarked on some initiatives with respect to improving the skills and is working closely with the government, he said.

Other business bodies like CII too have more comprehensive HR skills based initiatives in conjunction with academia and government plus individual companies including Scope too have their own programmes to develop and nurture talent. "We for instance, had programmes to develop home grown technical language skills in french and German," Nair said.

Scope, started 22 years ago, was initially into business and industrial market research, then moved into content & data for portals during the internet boom, and in late 2002, forayed into offshore knowledge service. "From being an India-centric company, with virtually all its revenues coming in Indian rupees, today we are 100 per cent overseas focused, with all our revenues being export revenues," he said.

"In 2007, Quatrro BPO solutions took a majority stake in Scope. For liaison and sales, we have personnel in five cities in the US, in the UK, and the Netherlands and associates in Belgium, Japan and Australia," he said.

Scope is projecting a growth of over 30% in 2009-10 and has already invested in front end sales resources and network particularly in the US and the UK, he said.

The company, with its delivery centres based in Chennai, is over 550 people strong. There are no recession based lay offs and recruitment continues on an as needed basis, Nair said.

Scope has won international awards like Service Provider of the year award from the Data Publishers Association, UK in 2005. In 2006, it was listed among 'Top 100 Knowledge Management Companies in the World'


  1. Really Good News !!!!!!!!!!!!!!!!!

  2. Great post! Hope to see more update on this post.

    Thank you.
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