The global economic slowdown has indicated clearly that going forward, companies will need to think ‘out-of-the-box’ and over and beyond what they have been accustomed to. In real terms, it means that India’s IT-BPO organisations have to explore and ride on the next wave of opportunities. Moving away from traditional service lines, geographies and business models, they have to embrace other, more innovative means of capturing emerging markets and customers.

Q1: What are some of the emerging areas where the IT-BPO industry can play a key role going forward? How large are these opportunities?
Q2: What are some of the solutions and skills that companies will require to address these new segments?

1. I see the next quantum of growth coming from services targeted at the SMB customer base, which is currently an under-served segment. By 2020, this segment could be worth USD 230 billion.
2. Service providers need to develop mass but customisable solutions, which provide a faster buck on SMB investments. Providers also need optimal ‘go-to-market’ plans as typical large account engagement rules don’t apply.

Raman Roy, Chairman and Managing Director, Quatrro

1. SaaS and Cloud are no doubt the next wave of IT revolution. That is a trend that will create the ‘Industrialisation’ equivalent for IT. It will expand the scope of IT beyond its current boundaries. For India, SaaS is a great opportunity to create an IP-based software industry, leveraging the services strength that we already have.
2. For this to happen, the Small-to-Mid-sized IT services companies have to re-look at the option of ‘Productising’ their current services offerings as SaaS solutions. This is a C level strategic decision that needs to be driven top down to see real success!

Suresh Sambandam, CEO, OrangeScape

1. When we talk about the emerging opportunities, it must be emphasised that going forward, we expect around 80 per cent of the growth in addressable market tocome from non-traditional areas such as Banking, Financial Services and Insurance (BFSI) and regions apart from the US and Western Europe.
   McKinsey is predicting that Healthcare and government/PSU segments will be the emerging areas to watch out for in the years ahead. The government and PSU vertical is as large in outsourcing today as, say, BFSI was in the past years.

   Of course, it must be acknowledged that many of the emerging opportunities may not be accessible by today’s offshore business model, rather it will have to be addressed by other unexplored approaches. A few Indian IT-BPO leaders have already set up subsidiaries in the US to engage with government/PSU customers and have even made a breakthrough in this segment with some crucial orders in the bag.

   The second big opportunity we see is in the Fortune 10,000 market. Until now, Indian IT-BPOs have been focusing on Fortune 1,000 organisations essentially the large, enterprise players. They will now additionally engage with Small and Medium Businesses (SMBs), reaching out to the next tier of 10,000 global companies. This alone is estimated to be a USD 250 billion addressable market!

   The third area of opportunity is expected to lie in new geographies, where domestic outsourcing will be huge. In this scenario, India and China represent the single largest set of opportunities, much larger than the growth in the addressable, core industries.

2. Basically, the Indian IT-BPO industry must at least explore four distinct and fresh business models to tap the emerging high potential business domains.
   The first model is product-centric services, which essentially combines a software product or platform with
   traditional services.

   The second model is about companies positioning themselves as BRIC country specialists, with affordable solutions for domestic outsourcing.

   The third option is the platform-based model. This is essentially different from the first category. While product-centric services companies have a software product and build software around that, in the platform-based environment, services are offered that are enabled by a technology platform.

   At the fourth level, the model will be a client-centric one, where companies will focus on building end-to-end relationships with customers, in order to emerge as preferred vendors, or vendors of choice. These companies will be part of the single source deals of clients based on the proximity they have with the user organisation and the high quality of their service.

   Another mark- up Indian IT-BPOs will have to offer, will be the ideas they bring to clients. Today, when customer
   organisations are consolidating their business, they are looking for vendors that can add greater value to their
   experience. They need companies that can help them overcome business challenges and deal with their pain
   points. CIOs of companies today have multiple objectives related to growth, risk mitigation and management
   and cost and productivity. Clearly, Indian IT-BPOs have to focus on meeting these requirements.

Noshir Kaka, Director, McKinsey

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