What will kill the Indian BPO industry

As an MBA student, I have had to analyze various industries and varied businesses to find out whether they are worth entering, are profitable, and what their future prospects are.

The BPO industry has never been analyzed.

All premier management institutes have fests with competitions which involve solving business problems. in marketing, finance, operations, HR and the like. I have seen all sectors represented in these fests.

Not one of them has a BPO event.

My B-School has a course on management in the ITES industry. How many people have taken it? Less than ten.

So what is going to kill the BPO industry? Rising personnel costs? Infrastructure issues? Financial constraints?

It is my humble opinion that the only constraint that the BPO industry has always had and continues to have is the lack of quality middle management.

It is easy to sound the death knell of this industry when business schools ignore it. BPO companies are not on the dream company lists of any Tier 1 institutes. So they naturally recruit from schools which are desperate get some placement. This dramatically impacts the company’s ability to leverage its capabilities and consequently, these companies are not able to articulate clear visions and retain talent.

When a management is made up of under performers, the talent issue gets magnified when it trickles down to the front-line agents. HR policies become lax and anyone who can form sentences in English gets recruited. Quality of transactions goes down and clients flee. Of course, they are replaced by others now because the industry has invested a lot in its marketing team abroad. But how long can good marketing hold up a sub standard operation?

My profs tell me marketing Indian BPO is easy because India as a brand is already SOLD in the US and Europe. Everyone knows India has a huge pool of graduates who speak English better than they speak their native language. Everyone knows that Indians are handy with computers, both software and hardware.

What everyone doesn’t know, is that the managers in these companies are clueless as to what their company will be doing in three years. They don’t know how to handle international competition, they don’t know what to do when quality metrics go down, they don’t know how to continually motivate the team to go beyond the metrics and look at the long term view.

Can this be fixed? Does this industry, which employs a million people, have a future? or is it just a flash in the pan?


4 Responses to What will kill the Indian BPO industry

  1. harry says:

    unable to put comment in last post..

    too bad..what a coincidence ..reva has put in her comment b4 me in both scudie and kaps blog..maama btw tamizh font looks hep daa…btw why not tamizhan in chinese..waigworen..hee hee..

  2. Machan It not only screws up the foreign competition and reputation da … but the main thing is it is spoiling the local reputation of the company in terms of mismanagement of employees … so there will not be a talented pool of employees who would be working for them in the long run, so as a recursive function the company goes for ruin … according to me all these .. I mean HR, Marketing, Finance and Operations should work based on ethics, sincerity, commitment … these would ensure that the company benefit in the long run.

    You should know of many companies (BPO) where there is no consideration for employee freedom. Many companies are just interested in extracting work from people, ignoring the fact that the employee is a human being … who would want to stay back in such company … leave alone the BPO industry, there are many other industries that follow the same pattern.

  3. kicha says:

    hmm, I agree with you on BPOs, that they dont get/take quality people. they are just ppl who are desperate to get a placement… it affects growth in long run. one more thing is, BPO jobs are not projected well (like s/w industtry jobs), and because of this it does not has a good social status….

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