India losing 70 per cent voice and call centre business to Philippines, Eastern Europe: Survey

[Edevelop]

NEW DELHI: Struggling to diversify the delivery footprint to take advantage of low-cost centres, India's BPO industry is currently losing 70 per cent of all incremental voice and call centre business to competitors like Philippines and countries in Eastern Europe, says a report.

"It is estimated that in the ongoing decade India might lose $ 30 billion in terms of foreign exchange earnings to Philippines, which has become the top destination for Indian investors," Assocham Secretary
General D S Rawat said. Thus there is a need to reduce costs and make operations leaner across the BPO industry," he added.

BPO companies could reduce the total operating costs by 20-30 per cent by moving to a low-cost city within India, with a cost differential of around 10-15 per cent for non-voice processes and upwards of 20 per cent for voice processes, the report pointed out.


Several Indian firms have set up substantial operations in Philippines which has a large pool of well-educated, English-speaking, talented and employable graduates. Almost 30 per cent graduates in Philippines are employable unlike 10 per cent in India where the training consumes considerable amount of time, according to the report.

"Cultural proximity to the US together with availability of talented manpower are key reasons as to why BPO companies prefer expanding their operations in Philippines," Rawat said. Expansion of non-English BPOs in Tier-2 and Tier-3 cities, to provide low cost services to the telecom and aviation sectors, are set to play a significant role in growth of domestic outsourcing industry, the report found.

"Lower attrition rate in smaller towns is a big positive owing to lower recruiting and training costs, while there is comparatively high attrition rate of 30-35 per cent in tier I cities. Transportation costs for BPO employees and real estate prices are also lower in smaller cities," Rawat said.

Cities like Ahmedabad, Chandigarh, Coimbatore, Dehradun, Jaipur, Kozhikode, Nagpur, Nashik and Palakkad can help meet 50-60 per cent of the projected talent requirement of BPO industry over next
next five years, the report said. Government projects like the National e-governance Plan (NeGP) and the Unique Identification Authority of India (UIDAI), among others, are likely to provide a fillip to the domestic BPO sector in smaller cities, it added.

India losing 70 per cent voice and call centre business to Philippines, Eastern Europe: Survey - The Economic Times

 

[Srinivas]

Indian firms are setting up operations in Philippines and other ASEAN countries. The wealth is created by Indian MNC's.

In the mean while Pharma, Hardware and IT sector are growing along with manufacturing. This will compensate the revenue losses or job losses.


India’s IT-BPO sector may lose out to Philippines unless it cuts costs

NEW DELHI, APRIL 6:
The Indian business process outsourcing (BPO) industry needs to diversify its delivery footprint to take advantage of low-cost centres; otherwise competitors, such as the Philippines, would further consolidate their position, says a study.

The study on information and communications technology jointly conducted by Associated Chambers of Commerce and Industry of India (Assocham) and KPMG said India was losing around 70 per cent of all incremental voice and call centre business to competitors, such as the Philippines and Eastern Europe.

Therefore, the domestic BPO industry needs to diversify and cities such as Ahmedabad, Chandigarh, Coimbatore, Dehradun, Jaipur, Kozhikode, Nagpur, Nashik, Palakkad among others must help meet 50-60 per cent of projected talent requirement of the BPO industry over next five years, it said.

It said IT-BPO companies could reduce the total operating costs by 20-30 per cent by moving to a low-cost city within India with cost differential at around 10-15 per cent for non-voice processes and upward of 20 per cent for voice processes.

“It is estimated that in the ongoing decade India might lose about $30 billion in terms of foreign exchange earnings to the Philippines, which has become the top destination for Indian investors, thus the need to reduce costs and make operations leaner is increasingly becoming significant across the BPO industry,” DS Rawat, Secretary General, Assocham said.

Lower attrition
He said “the lower attrition rate in smaller towns is a big positive owing to lower recruiting and training costs, while there is comparatively high attrition rate of 30-35 per cent in tier I cities.”

A number of Indian firms have reportedly set up substantial operations in the Philippines, which has a large pool of well-educated, English-speaking, talented and employable graduates.

Around 30 per cent graduates in the Philippines are employable, unlike 10 per cent in India where the training consumes considerable amount of time, the study highlighted. To provide content in the local language, there is a need to address the challenges of fonts, and poor bandwidth. Sector-specific, need-based services should be offered. Besides, even transportation costs for BPO employees and real estate prices in smaller cities are lower as compared to the metros, the study added.

India’s IT-BPO sector may lose out to Philippines unless it cuts costs | Business Line

I think BPO sector should concentrate in tier 2 cities to cut costs

 

[thesolar65]

Indian firms are setting up operation in Philippines and other ASEAN countries. The wealth is created by Indian MNC's.

In the mean while Pharma, Hardware and IT sector are growing along with manufacturing. This will compensate the revenue losses or job losses.

And the OP is Happy though his country does not get any share!!

 

[Skull and Bones]

I'm happy in a way, call center's contribution in creating jobs is undeniable, but at the same time has caused many brilliant minds to sway away from education to earn quick and easy money. The emphasis should be on R&D, call center should be only viewed as an alternate to employ people with less marketable skills.

 

[Chinese-Dragon]

Indian firms are setting up operations in Philippines and other ASEAN countries. The wealth is created by Indian MNC's.

The wealth is created by Indian MNC's, for the benefit of the Filipino economy? Jobs are being created in the Philippines, investment, economic activity, etc.

Normally companies venture out of their own country after the domestic market has become saturated, but in this case costs in India seem to be unacceptable to these Indian MNC's, despite the per capita income of the Philippines being much higher than India.

 

[Skull and Bones]

The wealth is created by Indian MNC's, for the benefit of the Filipino economy? Jobs are being created in the Philippines, investment, economic activity, etc.

Normally companies venture out of their own country after the domestic market has become saturated, but in this case costs in India seem to be unacceptable to these Indian MNC's, despite the per capita income of the Philippines being much higher than India.

Or the easy availability of English speaking population? Given that Indians have an accent and it requires much polishing to get somewhat neutralized or westernized accent.

 

[Srinivas]

The wealth is created by Indian MNC's, for the benefit of the Filipino economy? Jobs are being created in the Philippines, investment, economic activity, etc.

Normally companies venture out of their own country after the domestic market has become saturated, but in this case costs in India seem to be unacceptable to these Indian MNC's, despite the per capita income of the Philippines being much higher than India.

Indian MNC's are in cost cutting mode, since there is readily available talent with out training in Philippines. Indian graduates are 10% suitable for the jobs compared to Philippines whose percentage is 30. The survey is just a prediction if Indian companies do not cut costs, I have posted another article on the same topic which says Indian MNC's should concentrate on Tier 2 cities where cost of setting up a BPO is less along with employee salary.

 

[Chinese-Dragon]

Or the easy availability of English speaking population? Given that Indians have an accent and it requires much polishing to get somewhat neutralized or westernized accent.

When I was growing up, my family had several Filipino maids, and their accent in English was not that good. They are better at Tagalog and even Spanish in many cases.

Granted, Chinese are much worse at English, but you don't expect Chinese people to have decent English in any case.

Indians generally have good English in my experience. Better than Chinese and Filipinos for sure.

 

[Skull and Bones]

When I was growing up, my family had several Filipino maids, and their accent in English was not that good. They are better at Tagalog and even Spanish in many cases.

Granted, Chinese are much worse at English, but you don't expect Chinese people to have decent English in any case.

Indians generally have good English in my experience. Better than Chinese and Filipinos for sure.

And, maybe they're targeting the east Asian market?

Espire Infolabs Pvt Ltd, MasterPiece Group, Success TRC Pvt Ltd

 

[madhu_greenleaf]

When I was growing up, my family had several Filipino maids, and their accent in English was not that good. They are better at Tagalog and even Spanish in many cases.

Granted, Chinese are much worse at English, but you don't expect Chinese people to have decent English in any case.

Indians generally have good English in my experience. Better than Chinese and Filipinos for sure.

Indians can speak with a Western accent if they try, but it is looked down on to try to be something one is not. It is considered fake and invites ridicule.

Indian invisible innovation and the future.