Globalization in India started in the early 1990's when the government allowed foreign investment in the country. Global forces sneaked in various sectors such as agriculture, pharmaceutical industry, information technology, and exports. It also created multiple employment avenues along with free capital from foreign investors. This facilitated economic development of the country while reducing the disparities in wealth and income.
If there’s a sector that has got the maximum benefit of globalization, then it’s the BPO sector of India. There are a number of reasons for the rise of Indian sector as a global BPO hub. Let’s have a look at them first.
Scalability: The Indian call center outsourcing services have scalability, this means, and that they can be changed in size. For instance, they can manage the increase in demand easily.
Skilled Manpower: The country has access to rich pool of skilled manpower at low costs. The human resource is trained well and the ones who have necessary soft skills are hired. Moreover, they are given responsibilities in the call center according to their strengths and weakness. Proper feedback is also being given to them during meetings. Getting such skilled, trained and efficient manpower in such a feasible and low cost is not possible in any other country.
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State-of-art Technology: BPOs in the country provide persistent cost advantage without compromising on the technology. The technology they use is up to date. Also, they use various KPIs and metrics to measure the performance of their agents and also use software to analyze the loopholes that are hindering them from doing even better.
Language competency: Indian is the world’s second largest English speaking population after US. Most of the population of India knows how to write and speak in English as they are taught in this language from the start. This gives the benefit to the companies who want to outsource their back-end processes. They get English speaking agents in low cost.
Cost savings: It is known to all that outsourced call centers work at one-fourth of the total cost that a company incurs if it plans to manage those tasks in-house. What came of as an even more surprising fact is that call center in India uses only 33-40 % of costs on manpower. This tells how beneficial outsourcing work to an Indian call center services provider like Go4customer is in terms of monetary gains. They use less than half the money they have on training and paying the employees and the rest is being utilized in updating the technology and infrastructure.
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Due to all these benefits Indian BPOs are preferred more by companies across the world over the BPOs of other countries. All of this has happened due to globalization. The Indian BPO industry started booming and working on its facilities more to get ahead of the BPOs of other countries. This also created more employment opportunities for Indian population, especially the ones who have just completed their schooling or graduation.
Now let’s take a deeper look into the economics of outsourcing in particular.
Economics of Outsourcing
Dismantling trade barriers and capital mobility across countries integrated the global economy. In India, its effects were mainly experienced in the service sector. This rapid growth of service sector boosted phenomenal growth in the business process outsourcing industry. Indian BPOs are known for providing effective business solutions along with quality and cost advantage by employing latest technology.
Through the combined efforts of the industry and the government, IT-enabled services have evolved as one of the leading service sectors creating niche opportunities for the country. Additionally, the government has been continuously making efforts to make India a leader in this age of IT revolution.
According to the industry experts-
“65% of the companies worldwide are opting Indian BPOs to outsource their backend operations.”
Post globalization, India has gained competitive advantage over other nations in terms of skilled manpower, cost advantage, as well as state-of-art technology. There has been a remarkable upsurge in new services and products due to technological convergence at industrial, infrastructural, and services level. As Indian BPOs continue to evolve, improve, and provide better value, many organizations and companies are establishing strategic partnerships and contracting with them to gain cost advantage. By outsourcing non-core activities companies can now focus on reorganizing their production and supply chain networks. This will benefit firms in increasing their economies of scale. “Also, Indian call center industry is forecasted to grow at 7% per annum by 2017.”
In short, India has emerged as the largest BPO service provider across the globe. This has also increased the employment opportunities and the growth of the Indian IT industry. Moreover, the potential for high growth in BPO sector is geared towards providing high quality customer services, business intelligence and data analytics to the clients.