'Transformational services': BPO Industry's growth mantra

For some quarters now, the Indian BPO sector has managed to expand rapidly in contrast to the IT services sector which is still being rocked by global headwinds. So much so, that the BPO industry is now confident of surpassing NASSCOM's growth projections for the overall IT, Information Technology Enabled Services (ITeS) industry for FY14 reports CNBC-TV18's Shreya Roy and Kritika Saxena report.

Set to clock revenues of USD 20 billion in FY13, the Indian BPO industry is confident about double digit growth in FY14 as well. Outsourcing majors like EXL, Genpact and WNS say they expect to clock in 12-16 percent growth next fiscal, surpassing NASSCOM's 12-14 percent guidance for the overall IT,ITeS industry. IT sector may see deals worth $3bn from US, UK in 2013 Commenting on that, Pramod Bhasin, non-executive chairman, Genpact, said, it should be in the 13-16 percent range for the overall industry. He added that if one was looking at captives, they are growing fast and typically they grow well. If you look at third party providers, they are clocking in healthy numbers. I think the BPO industry will grow slightly better than the IT industry. Rohit Kapoor, Chief Executive Officer, EXL, said, "Our business growth over the last five years has been in excess of 25 percent per annum on a CAGR basis. Going forward, we will be looking at growing our business both organically as well as inorganically. We are trying to grow our business 15 percent organically and then complement that by another 10 percentage points of inorganic growth." Considering the IT services sector is still seeing volatile times and the BPO sector's own loss of market share in the global voice based BPO space, the question is, where is this confidence coming from? Driven by its shift towards high-end knowledge and skilled-based work this industry has moved towards high end transformational services and that's what it is banking on for future growth. Keshav Murugesh, Chief Executive Officer, WNS, said, "I think a moderate market, which is what we are expecting to be seeing right now for the next six years at least, actually plays in well with business process management companies who are now offering an end to end solution, vertical specialisation, technology enabled transformation and who are extremely client centric with global models." Even though the play on cost arbitrage is no longer a draw, companies believe that over the next 4-5 years, specialised services in verticals like  banking, capital markets, financial services and accounting, supply chain and healthcare will drive growth.