Changing Trends and Landscapes in BPO’s

Offshoring of business processes is now a proven strategy across all successful organizations. The key differentiator is the pace of transition to low cost countries and the pace of moving up the value chain.

Globalisation, integration of labour markets and IT advancements continue to be the key drivers of global outsourcing. However, offshore outsourcing is evolving and becoming more strategic in nature, slowly bringing about transformational change within companies.

Offshoring to mature locations such as India are no longer driven just by lower cost and better quality, but are increasingly based on strategic business drivers such as continuous improvement, speed or time to market, innovation, flexibility and efficiency. New trends in offshore outsourcing are beginning to emerge.

Industry evolving

‘Beyond cost and labour arbitrage’ is the new ‘mantra’ of offshore BPO. In the past, outsourcing was largely governed by considerations like cost savings, labour arbitrage, reduction of overheads, etc. Companies outsourced only non-core/non-critical activities and only to generic service providers with low cost delivery capability. But this has changed with time. Today, companies measure the benefits of outsourcing against business outcomes like increased speed to market, reduced defects or rework, lower working capital requirement and new market opportunities.

For many industries, global delivery is an integral part of the business strategy and is key to continued business growth and success. Most of the major IT & ITES such as IBM, EDS and Accenture who have spread their work force across multiple low cost locations to expand their business across the globe. Adopting a global delivery approach has helped these companies survive and meet more competitive market conditions and compete more effectively with the large Indian IT and BPO service providers such as Infosys, Wipro and TCS.

Under the evolved model of Offshoring, the offshore service provider brings four key practices to the table in the form of streamlining processes.

• Best practices across industries for specific functions or activities


• Operational discipline and improvements through the use of quality tool


• Scale-driven cost reduction because of centralization and standardization of processes


• Use of new and standardized technology across all processes across business units, group companies and geographies

Today, with most outsourcers increasing the processes or functions in their outsourcing portfolio, multi-location BPO is gaining fresh ground. India maintains its leadership position in the offshore services market due to its low wages and large labour pool and its experience in this industry for over two decades. However, India’s leadership is being challenged by emerging Offshoring destinations such as the Philippines, Malaysia, Vietnam, East European nations including Hungary and Poland and Central American nations such as Mexico.