In a desperate attempt to remain competitive in an ever changing global outsourcing industry, India’s giant outsourcing service providers are acquiring their foreign rivals. Country’s business conglomerate Aditya Birla Group has recently announced that it is set out to acquire a string of BPOs to expand operations overseas.
With its ever expanding English-speaking workforce and strong IT infrastructure, India is way ahead of its global rivals. But these days a few countries in Asia and Latin America are trying to challenge it dominance.
That’s why many Indian BPO companies are now setting their sights on more growth by acquiring their outsourcing rivals overseas.
Aditya Birla’s BPO arm is Minacs, which was formed after the company acquired the Canadian BPO in 2006. The company has also acquired UK-based Compass BPO Ltd in a bid to bolster its operations. Aditya Birla Minacs currently employs more than 20,000 employees and serves customers all over the globe. It has set up centers in various countries including Germany, Canada, India, Hungary, Philippines, Jamaica, the USA and UK.
Presence in the Americas
Aditya Birla Group’s tryst with Americas dates back to 2007 when the company acquired Minacs. Minacs had the distinction of achieving the ISO: 9001 quality certification in 1996 and it’s the first North American contact center / BPO to do so. In 2010, the U.S. was the largest market for the company as the region contributed to more than 65 percent of its business. The company has made it clear that it was looking to expand in the Americas as it would give the company a chance to have a nearshore presence to its clients.
Effects on outsourcing industry
As an increasing number of Indian BPO companies look to grow their businesses, it will have interesting implications on the global BPO industry. India has a large supply of skilled, English-speaking workforce.
A report by NASSCOM claims that by the end of 2012, the opportunities for the Indian BPO sector will reach to about US$ 220-280 billion.
If the Indian outsourcing companies can set shop at countries from where they get their business, it will set the ball rolling as far as exploiting opportunities in these markets are concerned. Indian BPOs may lose the cost advantage on the foreign shores, but they will gain many other benefits which will make the business profitable and will bring in more clients.
If an Indian BPO company has its presence outside India, the company can boast of a diverse workforce. Many trained BPO employees in India often find it difficult to pick the cultural differences in their client’s country and the business suffers as a result. If the outsourcing company has a nearshore presence it can provide employees who are aware of the culture and methodologies of the client and hence provide a better output.
Although Indian outsourcing industry has been highly successful, the sector has been facing increased competition from other countries like Korea and Mexico. The emergence of English speaking workforce in countries like China is not helping the matters either. Also, rising wages in the Indian BPO sector is gradually eroding the cost benefit factor and many clients are looking for other countries to continue having the cost benefits. Indian bureaucracy is infamous for its slow functioning and deep- rooted corruption.
To overcome these problems, Indian BPO companies can look to open global delivery centers. It will instill more confidence in clients if the BPO has a nearshore presence. Also, the company will have more resources available when it comes to employees if it expands beyond India.
Apart from India, there are other places that provide low cost BPO employees and Indian BPO companies can look in these places to expand their business. Philippines is fast emerging as the new low cost outsourcing hub of the world as the country provides commendable telecom infrastructure along with skilled, English-speaking workforce. Even Australia has a large of number of English speaking workforce with favorable time zones.
Aditya Birla Group’s expansion plans have the potential to make the global outsourcing industry more competitive and affordable for the clients. If the company succeeds in its plans, more Indian BPO companies are sure to test the waters on the foreign shores in the coming years.