According to Dun & Bradstreet (D&B) India publication, India’s Top ITeS and BPO Companies 2008, the ITeS-BPO industry will be impacted by the existing financial crisis, but firms have already started taking initiatives to lessen that risk.

Service providers in the sector have started offering services to a wider set of business verticals to reduce dependence on one particular vertical. For instance, the share of the banking, financial services, and insurance (BFSI) sector in the ITeS-BPO industry declined from 31 percent in FY 2007 to 28 percent in FY 2008. D&B foresees a similar declining trend for conventional BPO services in 2009. The study also foresees outsourcing/offshoring decisions to become an important part of a company’s overall business strategy, as there is increasing focus on cost rationalization.

Manoj Vaish, President and CEO – India, D&B, stated that the market share of service lines including KPO, LPO, EPO, and eLearning in the ITeS-BPO industry has grown significantly. These service providers are always keen to diversify across sectors, thus increasing chances for revenue growth. The study compares India with leading outsourcing destinations (including China, the Philippines, Mexico, Malaysia, Brazil, Czech Republic, and Chile), revealing that the Indian ITeS-BPO industry offers best-in-class services at competitive prices. India’s annual average salary is second lowest (at $7,500–8,500), following China’s (at $7,000–8,000). In addition, India is one of the largest providers of English-speaking graduates including engineers and management graduates.

Among the key findings, the collective employee base of 177 respondent companies stood at 442,349, which constitutes 63 percent of the total Indian ITeS and BPO employee base of 700,000 (as per the NASSCOM estimate). These 177 companies registered a year-on-year increase of 23 percent in terms of total employee base. Revenue per employee of these companies touched approximately $12,013.5 annually.

Chennai was rated the most preferred location for establishing delivery centers, followed by Bengaluru, Mumbai, Pune, and Gurgaon. About 59 percent of respondent firms are planning to expand operations across Tier II and Tier III cities including Shimoga, Coimbatore, Madurai, Bhubaneswar, Mysore, Guwahati, and Jaipur. The study also forecasts a significant increase in the research and analysis, HR services, and translation services segments over the next two years, while the BFSI, healthcare, and telecom sectors are being considered as the most promising verticals.