The New Year brings with it better tidings for the Indian IT industry. The mood in the market is definitely improving, and almost every single client of ours has told us that prospecting activity is increasing. We have heard of many more prospect visits in the last 2 months, than in the earlier 6 months combined. 

This is especially true of the BPO and contact center space, where the acceptance of offshoring has happened in a much shorter time frame, owing primarily to the hard work put in by, and strong track record of the Indian IT services industry. In fact, there are many teams from buyer organizations who come down with a combined agenda of evaluating vendors for offshoring IT services, back office as well as contact center work.  

A trend we have observed is also the increasing role played by consultants assisting buyers in making decisions on offshoring. In one sense, this is good news as the selling of offshoring is done by these people, but in another sense this also means that the selection process would be more rigorous, and many more companies would come into the consideration set, not just from India , but from other offshore destinations as well. Mid-tier IT companies, in particular, would do well to identify the players in this space and forge relationships with them as they are fast becoming important influencers.

Given the slow but sure improvement in the market (the threat of war clouds notwithstanding!), we predict an increased focus on sales and marketing efforts in Indian companies. We would strongly urge emerging service providers to balance their focus on selling with some cost effective, but impactful marketing initiatives. For, as we have been saying all along, the market has become very competitive, and is likely to stay this way, and it is imperative that companies invest management bandwidth and prudent dollars to avoid the danger of being branded as yet another player!  

Given the ever-increasing buzz around BPO and its potential, we felt it fit to focus this issue of Confluence on trends and prospects in this space.

With the industry past its infancy, we are now seeing certain clear trend emerging- larger buyers coming offshore and signing significant deals- Household Bank and Delta Airlines are two examples of such deals that come to mind immediately. Large global corporations are also setting up their own BPO and call center operations, inspired by the success of first generation companies such as GE, Amex, Dell, HSBC and Amazon.com. We also have international players back-ending their operations in India- Convergys, Teletech and Sitel Corp. Lastly, the most talked about trend of every large IT services player having a stake in this space- Progeon, Spectramind, Intelenet, and Nipuna.  

While most first generation companies have focused on a broad array of services, we now see the emergence of players who offer specialized services where they have a distinct competence, in addition to other services. Global Vantedge, headquartered in Palo Alto, US and carrying out operations out of Gurgaon , India , is a good example of such a player.

We carry an interview with Mr. Dennis Sholl, CEO, Global Vantedge, a contact center that specializes in providing remote collection services.  

Another interesting observation we had on this industry- while it has been christened IT enabled by NASSCOM, we have seen few players leverage IT to improve delivery processes. Perhaps, the availability of people at highly affordable salaries has been a reason for this. TRRS Imaging, based in Bangalore, stands out therefore in its application of technology to improve its delivery processes. We feature this company under the Best Practices Section.

We also carry a feature on the trends we see in the IT services and BPO spaces, and what that may mean to service providers.