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Back-office comes to the job forefront

Calcutta, Nov. 18: The Boston Consulting Group (BCG) sees 30-40 million BPO jobs being created in India by 2020. BCG’s estimates are based on a survey conducted by the global consulting major for the Planning Commission of India.

“By conservative estimates, 30 million BPO jobs could be created in India by 2020,” said BCG director K. James V. Abraham. He was speaking on strategies for success in the IT-Enabled Services (ITES) and Business Process Outsourcing (BPO) sector at Infocom 2003, organised by Nasscom and Businessworld, an ABP Group publication.

The message from Day II at the region’s biggest IT show was: BPO holds the key to success.

“Going forward, India’s comparative advantage will be skilled work force and not cost. But that calls for creation of skills, for which India needs to set up more IITs and regional engineering colleges.,” he added. BCG expects the government to announce some concrete measures towards creation of technical skills in Budget 2004.

“Already there are signs of high-end BPO jobs being off-shored to India. GE is conducting nano-technology research in Bangalore. We expect more engineering jobs to be off-shored to India,” Abraham said.

While all the speakers during Day II, which was dedicated to ITES – BPO, emphasised that the sector will drive growth in the economy, they mentioned that Indian BPO companies must move up the value chain to realise the potential. BPO businesses won’t grow on labour cost arbitrage alone. They should improve the quality of their service to be competitive, experts said.

Resistance against off-shoring from various parts of the globe — like the ‘do-not-call’ legislation in the US and similar other legislations in Australia – was referred. “As many as 53 million Americans registered themselves under the ‘do-not-call’ list in just two weeks — that’s about a fifth of the US population. It shows people’s annoyance at being called three to four times a week by telemarketing companies,” said Chris Luxford, director Asia Pacific of Nortel Networks. Purely telemarketing outfits will suffer, but off-shoring of business processes will not be affected by the proposed legislation, he added.

Rajiv Lochan and Yash Gupta of McKinsey presented the findings of a study by the consultancy major’s research institute and quantified the gains from offshoring to the developed world.

K. Pandia Rajan of Ma Foi explained how new opportunities are created in the field of human resource offshoring.

With the scope of off-shore business broadening, from mere data entry and collection to complex knowledge-based transactions, Indian companies must also start delivering these services, said Avinash Vashistha, managing director, neoIT.

But limiting offshoring only to IT and ITES will mean missing an opportunity. “With retail chains like Wal-Mart and Gap sourcing from India, the scope is wide for firms to make the best of it,” Tata Telecom vice-president Raman Mahajan said.

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