Gartner warns of shake-out among Indian BPOs
By Our Infotech Bureau | 28 Mar 2005
Research
firm Gartner has sounded an alarm bell for Indian business process outsourcing
companies. The research firm says that in the coming six months as many
70 per cent of the top 15 Indian BPOs will cease to exist as they will either
merge with the bigger ones or be marginalised.
Gartner's predictions are based on the fact that off shore call centres
and offshore customer service centres represent a tiny two per cent of the
total market for such services and are expected to grow to less than five
per cent by 2007. The world-wide market for customer service outsourcing
is set to grow from $8.4 billion in 2004 to $12.2 billion in 2007.
Gartner also says that up to 2008, 80 per cent of organisations
that outsource customer service and support contact
centres with the primary goal of reducing cost will
not succeed while 60 per cent of organisations that
outsource parts of the customer-facing process will
encounter customer defections and hidden costs that
outweigh any potential savings they derive from outsourcing.
The organisation sees significant risks associated with outsourcing customer
service and says a poorly managed model can reduce the quality of customer
experience, dilute the brand values of the company and fail to deliver cost
savings. This is also partly due the fact that customer service outsourcing
providers in Asia have high
staff attrition rates of up to 70-80 per cent compared to an average of
19-25 per cent in in-house contact centres.
