BPO Backlash

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<b>Many top Indian BPO outfits under threat: Gartner</b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--> As many as 70 per cent of the top 15 Indian Business Process Outsourcing start-ups will cease to exist in the coming months, analyst firm Gartner has said.

"By the end of 2005, 70 per cent of the top 15 Indian-owned BPO start-ups that offer customer call centre services will be acquired, merged or be marginalised," it said. <!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Gartner also predicted that through 2007, 80 per cent of organisations that outsource customer service and support contact centres with the primary goal of reducing cost would fail.

Up to 2008, 60 per cent of organisations that outsource parts of the customer-facing process will encounter customer defections and hidden costs that outweigh any potential savings they derive from outsourcing, it said.
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<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->She also pointed to risks related to knowledge management and retention, accentuated by the fact that customer service outsourcing providers have staff attrition rates of up to 70 to 80 per cent, compared to an average of 19 to 25 per cent in in-house contact centres.

There are benefits to be gained from outsourcing non-core processes, but rewards will not be instant and organisations should adopt a controlled and phased approach, Gartner said.
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