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Domestic Business Process Management market may grow 21%: Nasscom

Domestic Business Process Management market may grow 21%: Nasscom

Apr 15, 2016

NEW DELHI: The domestic business process management (BPM) market could grow at a compound annual growth rate of 21% over the next five years to Rs 50,000 crore, generating over 3-lakh additional job opportunities for third party BPM providers even as they move to tier-III and tier-IV cities, according to National association of Software and Services Companies' (Nasscom) "Domestic BPM Market 2016" report. 

The Indian BPM market is expected to record revenue of Rs 23,500 crore in 2015-16, with the third party BPM industry employing 2,40,000 people.The largest sectors serviced by the BPM industry last year were BFSI and telecom, each constituting 35% of the revenue, while travel and leisure constituted 10%, retail 6%, and government 5%. 

The industry body, however, stressed the need for greater involvement and support from the government. "We believe that the government can play a crucial role in unlocking the true potential of the domestic BPM market over the next five years," said the report.It identified ecommerce and government, as the fastest growing verticals, as the BPM industry moves to tier-III and tier-IV cities. 

The government has a key role to play in the expansion of the BPM sector into these smaller cities, noted the report. The key focus areas it identifies for the government include infrastructure development, skill development, building policy frameworks to encourage employment and better infrastructure, and also help build confidence in the sector through awareness campaigns and setting up State level BPOs.

At present, the top 15 BPM players account for 80% of the total domestic third-party BPM market, and one fourth of the domestic BPM market is serviced by thirdparty BPM companies. The non-voice processes, including backend processing, accounted for 51% of the domestic BPM market. Voice constituted 30%, knowledge services was 8%, finance and accounting 6%, and HR and procurement together accounted for 5%. 

Non-voice processes are likely to grow faster than voice processes going forward, the report added. It further said that knowledge process outsourcing was still not happening much as it requires premium skills that require skilled talent, and hence expensive workforce which "come at a premium price that domestic buyers are not willing to pay, at least in the short term", the report noted. As firms move more and more into smaller towns, there is an increased focus on regional and local language skills.

Source: The Economic Times

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