The recent figures of BPO segment's revenues at 15 billion U.S dollars seems to have shaken up the rhetoric of certain masters in the similar business. Just an year ago, there were many who had been predicting that Indian IT would suffer a lot and BPO segment would face a bolt from the changing attitude of cash provider--the 'honorable' West.
To be fair, there were many signs about the possible plummeting of the ITES and BPO sector. The reasons being the increasing prices to maintain and manage operations in India, availability of alternate options in the form of Pakistan, China, Bangladesh and of course Philippines and Vietnam. There were talks about discussions factoring in the rising rupee which was making India less attractive. For example: if an Indian manager was to be paid Rs. 30k (750 US dollars) the companies could pay the same amount of Pakistani Rs. 30k (350 US dollars approx)--and I hope you got the drift. Also, the fall was substantiated by certain companies actually taking their call centers off India because of price for operations.
I believe that there are several possible reasons of the busting of all those predictions. One that is obvious is the more companies who had been out-sourcing their operations which could have led to increase of revenues.( The BPO segment revenues had been about U.S dollars 14 billion in 2010-2011.) There has been a flux of new names who had chosen India to outsource their service work. This can also be understood form the basic demand-supply analysis as was clear from the notion of ITES companies like Infosys, TCS, Wipro who had consistently hired new students fresh from college. Had there been no demand for new recruits, the companies would have reflected in their HR reports.
Then the important factor is Indian companies realizing the importance of competitive advantage over other budding nations in IT department. The Indian IT companies have added new features in their offerings bettering their cost attributes and also building upon marketing their services to the First World in a brilliant way. Nandan Nilekani has always stressed that we also need to market our offerings and that merely sitting like geek-ducks won't serve the future growth curves. Efficiencies on all levels and at all scales possible has been the grappling point for Indian ITES and they have done tremendously well.
This--because the IT soothsayers too have a job of a kind--would make the fellows who like to predict to do so in a way as to factor in these two crucial things. Anyways, Indian entrepreneurs and managers who are hands-on on IT tasks all the time are quite sanguine that the growth would continue if the global economic trend continues in the bad shape. (Joke in IT sections is for those who had move out and are to begin again with raised wages and other fixed costs.)
I would certainly say that the companies who are outsourcing are not to find the talent similar in scope and scale as in India anywhere else. Government, knowing that the biggest absorber of new graduates is IT sector have openly showed eagerness to dole out special incentives to such companies even in SEZs, free import of goods and services, excise CST and tax exemptions. It would be a shame, though, for the government to adopt this monolithic approach and not work for making other sectors--esp the farming, manufacturing, textiles--alluring for new investments.
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