Information Technology and IT Enabled Services (ITeS) are among the fastest growing sectors in India. Indian ITeS- BPO industry has played a crucial role in fuelling the Indian economy’s growth in terms of significant contributions to GDP, employment opportunities and exports. The growth of this industry has been very significant as it has contributed 5 million jobs and $15 billion in revenues in last 10 years. The contribution to Indian economy in terms of GDP is 1% and 4% in terms of exports. It has come a long way from providing just data entry jobs to higher end technical and knowledge process outsourcing.
The BPO industry has improved the brand image of India, thereby attracting much needed FDI. Clients from all over the world rely on Indian BPO industry for reliable service for their business requirements. It has also contributed to social development as well as infrastructure improvements in regional places acting as hubs for this industry.
The industry, despite its impressive growth and strong position, suffers from several challenges and risks that have the potential of adversely impacting the business. Recently, the cost advantage has been diminishing due to rising wages and other global destinations emerging as low cost service delivery centres. Other risks like high attrition rates, fluctuations in foreign exchange rates and fluctuations in global economic situation threaten the otherwise bright and promising prospect of this industry. The industry must mitigate the risks and challenges in order to realize its true potential.
Another risk to BPS/KPO/ITES industry and that is - improper transition and documentation - this means when the process has been migrated from overseas location the knowledge transfer has not happened properly or immediately after transition there is attrition in the team leading to knowledge gaps. Consulting companies can help in documentation and standardization of documentation. The issue could also be unskilled employees or under/overskilled employees or even organization structure etc.
At Riskpro, we believe that risk management in the BPO/KPO segment is usually a challenge associated with people or the human capital. Every major risk, in some form is linked to recruitment, training, and exit of an employee.
Some of the perspectives on risk management in this industry are given below.
- What are their biggest challenges – risk, compliance and process efficiency perspective?
- How do they currently manage these challenges?
- The role of vendor / outsourced arrangements and the risk
- The role of training in BPO/ KPO to manage operational risk
We have done a detailed study of the industry and developed a comprehensive set of risks by researching top risks, key issues on the basis of primary and secondary research.
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