Some doubts looming large over the future of the Offshore BPO Services

Even though the year 2003 saw Offshore BPO Services growing steeply, there are certain concerns about the long-term prospects of this industry. These questions have come into picture due to certain incidents, which have come to the fore.

Two of the well-known names, which come to mind, are Dell and Lehmann Brothers, who recently reduced their Offshore BPO Services from India. Some individual states in the US have also passed laws banning Offshore BPO Services contracts to foreign providers, under pressure from the business and employee lobbies. Also the incident that is fresh is the protests that rose when HSBC had decided to get the Offshore BPO Services from India. Such protests in fact are an indication of the superiority of Indian ITES industry and show us that just how scared are the worker unions are, about their jobs going to India. But on the other hand it also makes us think hard about the long-term continuity of this industry.

Currently, the ITES industry in India employs about 200,000 people directly. This is expected to go up to a million in the next five years. Offshore BPO Sevices industry is still in its nascent stage. By McKinsey’s estimates, in 2002 it was worth $ 32 billion to $ 35 billion, just 1 per cent of the $ 3 trillion worth of business functions that could be performed remotely. That’s how huge and humongous this industry is. But Offshore BPO Services have become almost a necessity to the US firms and they can’t do without it. For example the McKinsey study also estimates that for each dollar of work transferred Offshore, the direct and indirect benefits to the US economy are around $ 1.12/1.14, as compared to just about $ 0.33 to the outsourcee country. So with that kind of money being saved on Offshore BPO Services, it not going to be stopped that soon.