India's back office BPOs move upfront

NEW DELHI: For the Fortune 500 companies, which offshore tasks, it’s fashionable to say that they have wired their back office to India. They could soon be saying that their onshore or near shore centre is also run by India Inc.

Indian vendors, which are able to save 35-40% of the client costs by delivering BPO tasks from India, are now also setting up overseas centres. This trend has picked up steam recently. The reasons being cited for this move include de-risk strategy, capability to deliver in multiple languages, maturity of the Indian vendors in terms of superior process delivery capability & a shift in focus from cost savings to value addition.

Sample the moves made by the BPO vendors. Recently, Wipro BPO started making test calls from Bucharest in Rumania. Brazil is next on agenda and it will be Vietnam after that. ICICI OneSource, on the other hand, has just set up its second UK centre at Londonderry, after the one at Belfast.

Despite costs being higher in Ireland, HCL Technologies BPO already has over 2,000 staff there at Irma and Belfast. Similarly, TCS’ BPO operations span Mumbai, Chennai, the UK and Chile. Other India-based BPO vendors such as Genpact, Daksh, Hinduja TMT already have an overseas presence.

When asked about this trend, TK Kurien, CEO, Wipro BPO told ET, “When you start taking a company’s processes you have to follow the sun, so to say. You have to have a global solutions delivery capability. In the next five to seven years India may not be the only low cost destination.”

In another year, Wipro BPO will have 1,500 European nationals in Europe. Its Brazil capability came along with the $53m acquisition of Enabler, a European retail services provider. Enabler has a centre in Brazil near Sao Paulo, which specialises in analytics tasks and also provides good German and Spanish language skills. Wipro BPO plans to grow this to 350 seats from 150 at present.

Says Sumit Bhattacharya, executive vice-president, HCL Technologies BPO Services, “No client will put all eggs in one basket. Costs are higher in Ireland when compared to India but the overseas sites work as geographic risk hedging strategy.

Also, different countries have different skill sets. For us the Belfast centre, apart from offering multiple language capability brought in high-end skills in the telecom space.”

Companies that are yet to make the overseas moves are also now looking West. For instance Mumbai-based Intelenet Global Services has a partnership with Transcom (a European customer services provider), which allows it to offer services in 35 languages. Intelenet Global Services is close to acquiring a 500-700 seat BPO company in the UK.