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Challenges for Indian companies in the Financial Services KPO businessThe Knowledge Process Outsourcing industry (KPO) is expected to grow 45% in size by 2010. Global KPO pie in 2010 will be around $17 billion of which $12 billion will be outsourced to India. So, in future it’s KPO rather than BPO which will be the cutting edge for India. The Knowledge Process Outsourcing industry (KPO) is expected to grow 45% in size by 2010. Global KPO pie in 2010 will be around $17 billion of which $12 billion (70%) will be outsourced to India. So, in future it’s KPO rather than BPO which will be the cutting edge for India. India is most definitely very well placed to take advantage of this opportunity. But replicating the success of BPO in KPO would be a challenging task for India Companies since there are different processes involved in each of them. The 'Jack in all Trades' approach is not likely to work in KPO. It requires domain expertise and therefore it is important for KPOs to develop expertise in few areas and excel in them, so as to meet varied customer requirements. The challenges faced are manifold. Penetrating the KPO space apart from leveraging the expertise, which is vastly available in India, requires front-end interface not just in marketing and in networking, but also in understanding of processes and migrating such work to a remote location like India. Again severe competition from other low costs providing countries like china and south east is another issue. Business Process Transformation in Financial Services is the new wave for financial companies which have now began to streamline their operations along business-process lines, rather than off shoring them to low costs providers with fear of quality and confidentiality of the work done. While losing control over key processes has expectedly come out as the biggest concern, companies are realizing that it is possible to improve speed and quality of performance through business process transformation, without handing over control of key processes to a third-party. Maintaining higher quality standards by means of good infrastructure is another challenge faced by India companies. This may encourage foreign companies to set up their in-house units here, which may although take at least one year to stabilize quality and profitability but may pave further hiccups for the establishing KPOs in India. Also since India is considered to be low cost destination, KPO companies may further find it difficult to project a good and sustainable brand and quality image. India’s ability to develop infrastructure is far outpaced by neighboring China. Metro cities are getting saturated and costs are rising - Tier II towns need to develop infrastructure but India’s track record does not bode well for fast development. KPO is still a growing sector in India. Not many large
corporate except Evalueserve, Office Tiger and GECIS have forayed into it.
Further in this nascent market, reach ability as well as acceptability is still
a major challenge. Setting up successful KPO
companies, captives and third-party vendors Article Tags: Financial Services Source: Free Articles from ArticlesFactory.com
ABOUT THE AUTHORKPO companies - CRISIL Research is the country's largest independent and integrated research house with strong domain expertise on Indian economy, industries and capital markets. We leverage our unique research platform and capabilities to deliver superior perspectives and insights to over 1,200 domestic and global clients.
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