Management International

CASE STUDY

Indian BPOs—Waking Up to the Philippines Opportunity?

Since the mid-1990s, Business Process Outsourcing (BPO) firms have been one of the largest job, creators in India, redefining pay scales and the work environment for many young Indians. The sector witnessed a flurry of activity in 2004–05, with many multinational companies (MNCs) and Indian companies increasing operations and therefore their hiring numbers. A number of mergers

and acquisitions within the sector also signified maturity and consolidation for the industry. The number of captive and third party service providers added up to about 400 companies in the Indian BPO sector. According to industry experts, an educated, young and English speaking population and the cheaper bandwidth were the key factors behind this growth.

In addition to India, outsourcing companies were looking at Singapore, China, the Philippines, and Malaysia as outsourcing destinations. In the mid-2000s the Philippines emerged as a promising outsourcing destination for the western world. Indian companies too started establishing operations in the country. By 2008, companies such as Sitel, Genpact, and Citibank had already set up offices there, and were even shifting local talent from India to fill up senior and middle level management positions in the Philippines.

In 2008, the BPO industry had been in India for about a decade. In these ten years, it had shown tremendous growth and was no longer limited to being an activity of global MNCs. Leading Indian information technology (IT) software and service organizations had also contributed to the growth of the BPO industry in India.

Indian companies offered a bouquet of outsourced services like customer care, medical transcription, medical billing, payroll management, and tax processing. On the strength of this growth, the government identified the information technology enabled services (ITES)/BPO sector as a key contributor to economic growth, and offered them...