KPO sector to be worth $10 bn by 2012: Assocham

June 17th, 2008 - 5:09 pm ICT by IANS  


New Delhi, June 17 (IANS) The Indian Knowledge Process Outsourcing (KPO) industry is expected to be worth $10 billion by 2012, according to a report released Tuesday by the Associated Chambers of Commerce and Industry of India (Assocham). The industry is set to grow at the rate of 25-27 percent, provided a strong chain of qualified professionals is built, opening up the field for biotechnology and nanotechnology experts, according to the report on “Future Course of KPO Industry”.

Currently, the size of the KPO sector is estimated at $4 billion and it has grown at around 15 percent in the last few years, dominated by professionals belonging to fields such as management, medical and engineering.

Assocham president Sajjan Jindal said: “There is need to create a new pool of KPO workers from emerging domestic knowledge-based industries such as biotechnology and nanotechnology as a large number of talented young people have joined academic courses for career excellence in these two areas”.

“In India, the KPO industry is banking on availability of this talent pool to fill up its seats, but now they are facing a supply crunch”, Jindal added.

As per Assocham estimates, a vast pool of highly educated professionals in engineering, medicine, management, accountancy and law would be required to serve the industry, which is estimated to employ over 100,000 people by 2012 as against the current number of about 40,000.

The KPO sector has the potential to attract professionals as the sector provides higher revenues than the Business Process Outsourcing (BPO) industry. The salaries are also 12-15 percent higher and even the entry-level earnings are more.

Presently, the domestic KPO industry is facing stiff competition from countries like the Philippines, Russia, China, Poland and Hungary as these have qualified KPO professionals, low-cost, domain expertise, location advantage, sales and marketing capabilities and data compliance.

Assocham says the domestic KPO industry needs to tighten its service level agreements to provide quality services. It also needs to attract more revenue by entering into partnerships with big financial service organisations.

According to the study, most Indian companies don’t have security frameworks in place and overseas clients often hesitate to offshore research and processing of sensitive financial data. Moreover, the few companies that are coming out with ways to secure information are becoming less competitive due to the increase in cost.

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