Date:27/06/2005 URL: http://www.thehindubusinessline.com/2005/06/27/stories/2005062701351300.htm

Back Bengal sees scope in knowledge process outsourcing

Our Bureau

Kolkata , June 26

SPEAKERS at a seminar on `Knowledge process outsourcing: Emerging trends in servicing offshore slients' organised here by the Indian Chamber of Commerce (ICC) highlighted the huge scope in the sector.Dr G.D. Gautama, Principal Secretary in West Bengal's Department of Information Technology, said the State had the capabilities in terms of infrastructure, education and skills to garner a share of the knowledge process outsourcing (KPO) pie, especially in domains such as banking, insurance and finance. Other areas where KPO outfits could be active were design and visual arts, among others.

According to statistics, India today controls 44 per cent of the global offshore outsourcing market for software and back office services. During the year ended March 31, 2005, the Indian IT-ITES industry clocked a revenue of $ 17.2 billion.

At the end of March 2005, the Indian outsourcing industry employed 1.05 million programmers and other skilled workers, while providing indirect employment to 2.5 million people in support services such as transport and catering.

Speaking on the occasion, Mr Rahul Bhasin, Managing Partner of Baring Private Equity Partner (I) Ltd, said lower process component and higher knowledge component have facilitated higher value addition of KPO outfits.

Currently, the focus of KPO outfits is on financial management and equity research, market research, risk management, IP mining and filing, data mining, analytical research and consulting.

The revenue potential of the KPO industry in India has been pegged at $ 12 billion in the next 3-5 years.

Mr Bhasin said KPO outfits were knowledge-driven businesses and not capital intensive and, as such, venture capitalists had an important role to play in KPO outfits.

Mr Ajay Kapur, CEO of SIDBI Ventures, said modern day technology had provided the platform for knowledge process outsourcing. He attributed the success of KPO outfits to knowledge-based workers, cost-advantage and entrepreneurs' base. Besides, an improved communications infrastructure has been a great enabler for export of knowledge-based services, he said.