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Annual Report 2011-12
:: PRESS RELEASES
India's Success Story In Software And ITES
To Continue In Knowledge Process Off-Shoring Segment: Exim Bank Study
India's success story in software and IT-enabled services is expected to continue in Knowledge Process Off-shoring (KPO?) segment also, says an Exim Bank study. India currently holds a share of around 30% (US $ 9 billion) of global market (US $ 30 billion) for KPO?. The share is expected to increase in the coming years. Niche verticals like engineering processes and R&D off-shoring account, at present, for nearly 90% of the total value of off-shored knowledge process activities to India. Market research and analytics, legal processes and other such services are emerging segments that present significant off-shoring opportunities for India.
The emergence of KPO segment is not on the competitive-cost parameter alone, but also on the basis that the country produces every year a large number of knowledge workers across diverse domains. Besides, there are other factors like skill advantage, quality and timely delivery, productivity vis-à-vis cost, time zone that are driving the demand for off-shoring in the near future. Another critical driver is the prevailing shortage of skilled human resources in developed countries, such as the USA and the EU. According to the study, India is expected to witness an upsurge in demand for off-shoring segments such as legal processes, engineering design, R&D, market research, business intelligence and data / information management, and financial services research.
The Exim Bank study observes that many KPO? units, after successfully operating on the home ground, are vying for a position abroad through setting up KPO? operations. In such models, though it is not direct off-shoring of knowledge-based activities to India, Indian KPO? units stand to gain by offering their services from third country markets to clients from developed countries, taking advantage of time difference and skill availability in select verticals. Some firms are also strategically setting up marketing and sales offices abroad, to tap the business potential in various markets.
The study estimates that the KPO? is expected to witness high growth, with more number of small and medium enterprises from developed countries increasingly off-shoring their knowledge activities to developing countries, to cut down costs and remain globally competitive. While this trend creates opportunities for developing countries such as India, Indian KPO? firms need to adopt innovative strategies to gain significant market share. The suggested strategies include: efficiency in manpower utilization, training and coaching, data security and protection of privacy of information, certification and accreditation, developing domain expertise and building client relationship. Near shoring as a business strategy is also expected to reap dividends for this sector, according to the Exim Bank study on Knowledge Process Outourcing: Emerging Opportunities for India.
For further information, please contact
Research & Planning Group,
Export-Import Bank of India,
Centre One Building, Floor 21,
World Trade Centre Complex, Cuffe Parade,
Telephone: 2216 0364,