BPO: India losing ground to Philippines

India is losing about 70 per cent of all incremental voice and call centre business to competitors like The Philippines and Eastern Europe and unless domestic BPO (business process outsourcing) industry diversifies its delivery footprint to take advantage of low-cost centers, the country’s competitors will further consolidate their position, says a Assocham-KPMG study.

“IT-BPO companies could reduce 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 upwards of 20 per cent for voice processes,” the study said.
 
“It is estimated that in the ongoing decade, India might lose about $30 billion in terms of forex earnings to Philippines which has become the top destination for Indian investors, thus the need to reduce costs and make operations leaner is becoming significant across the BPO industry,” Assocham said.

Even many Indian firms have reportedly set up substantial operations in Philippines which has a large pool of well-educated, English-speaking, talented and employable graduates (about 30 per cent graduates in Philippines are employable unlike 10 per cent in India where training consumes considerable amount of time).
 
“Employees in Philippines call centers speak English fluently with a neutral accent which is what customers look for and that is something missing in Indian accents. 

This is a prime reason for the BPO business thriving in that country,” the industry body said adding, “Cultural proximity to the US and availability of talented manpower are key reasons why BPO companies prefer expanding operations in Philippines.”

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