"Outsourcing is one of the greatest organizational and industry structure shifts of the century," said James Brian Quinn, Professor Emeritus at the Tuck School of Business at Dartmouth. A classic example of a company excelling through outsourcing is Microsoft Corporation, which has product design, product development and marketing as its core competency area. Microsoft has established Outsourcing as its "preferred option" for all its non-core activities – production, distribution, finance and customer support.

Michael Corbett, International consultant on BPO, while speaking during the NASSCOM Outsource India 2003, a summit on IT Outsourcing and BPO, remarked, "Outsourcing as a percentage of budgets for global companies is expected to grow by 30 percent in 2003 and by 40 percent in 2004. Whereas, the expected growth in large IT firms is 50 percent by 2004."

India, according to Corbett, is poised for a growth in the Outsourcing segment for over a period of five years. India will grab 30 percent-40 percent of the BPO market which is valued at $ 550 billion-$770 billion. "Outsourcing is all based on trust. When the trust is put under pressure, that is when the relationships fall," he added.

"IT infrastructure and BPO typically cut costs by 12 percent and offshore outsourcing offers 40 percent-50 percent cost reductions," said Nigel Roxburgh, yet another international consultant in BPO. Gartner Research found that 60 percent of businesses said ‘becoming virtual is key to business success’.

Information and Communications Technology still continues to be the ‘red hot’ area in outsourcing in terms of function, whereas Product Manufacturing & Delivery, Customer Relationship Management, Human Resources Management and Financial Management continue to be the emerging area in the segment. Service Research, Development, Staffing and Delivery are some of the areas, which remain ‘cool’.

The government outsourcing trend in the US grew by 65 percent during 1996-2001 and it is pegged at $ 400 billion. However, the government sector is 10 years behind the private sector outsourcing. Referring to the New Jersey Bill, which bans government contracts from being outsourced overseas, Corbett said that he did not find this a threat to the India BPO market.

Companies, which can demonstrate their ability to keep confidentiality, can be successful in BPO. Confidentiality means having a better security structure and legal set up. For this, the company needs to give demonstrations as well as references to their clients, for customers need a reference point to make them comfortable in their decision. Further any company, which wants to venture into BPO, must differentiate or specify the industry it intends to serve for value proposition.

The other ways of climbing into the picture is through partnering, express proposition in terms of revenue growth and promote image with the end user that makes one the natural "Partner of Choice’. The Big Five outsourcing companies from India (TCS, Wipro Technologies, Infosys Technologies, Satyam Computer Services and HCL Technologies) have established outsourcing offerings through direct/ subsidiaries/ JVs/ alliances.

(CNS)