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MUMBAI, July 8

INDIA'S revenue from offshore business process outsourcing (BPO) during the current year will grow from slightly under $1 billion to $1.2 billion in 2003, representing 66 per cent of the global offshore BPO market, according to Gartner.

This will be supplemented by significant additional revenue from internal company operations and the US firms setting up their own deliver centres out of India, it said.

India will generate $13.8 billion from offshore BPO exports in 2007, added a preview of the Global IT services and BPO track of the forthcoming Gartner summit in Mumbai this month.

Global offshore BPO is expected to reach $1.8 billion in 2003, a 38 per cent increase over 2002's total of $1.3 billion. In 2003, offshore BPO will represent 1.5 per cent of the total BPO market, said the preview.

If enterprises that have been developing offshore sourcing strategies over the last few months successfully conclude pilot projects, the growth in offshore BPO during the next few years will be significant, as a result of contract expansions and new adopters," said Mr Sujay Chohan, Research Vice-President, Gartner.

But he did warn of hype too. "Organisations have been cautious in their adoption of offshore BPO services, so growth in offshore delivery is expected to be continuous, but moderate compared with the excessive hype around the concept last year."

While offshore BPO is growing, it is still an immature market, holds Gartner. Although a survey showed that one per cent of the 250 surveyed US clients of BPO are currently outsourcing their services and that 19 per cent are considering it, one-third of companies with over 1,000 employees obtain offshore BPO services from BPO providers headquartered in the US itself, noted Mr Debashish Sinha, Principal Analyst with Gartner's IT services group.

India is the top country for delivery of offshore BPO services among large companies, but new regions are emerging, said Gartner. Indian service providers should not get too complacent, said Mr Chohan.

And, although India has inherent skills related to transaction processing, Indian service providers cannot expect to target the higher value and more lucrative BPO services unless they acquire and demonstrate their process skills and industry knowledge top offer process transformation capability, said Mr Chohan.

"Most of today's offshore BPO opportunity remains at the level of out-tasking a component of a business process and relegated mostly to contact centres and transaction processing."

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BPO income seen at $13.8 b in 2007

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