Outsourcing industry in India facing an uncertain future

As the outsourcing industry enters a gloomy 2012 and the US moves to its usual pre-election jobs protection stance, consistent growth in research and development for newer innovations is the key for the Indian market to stay afloat

This is the view of Keshav R. Murugesh, group chief executive officer (CEO), WNS Holdings Ltd, a Mumbai-based global business process outsourcing (BPO) firm.

Calling the proposed US Call Centre Bill a 'protectionist' measure, he said such steps will further restrict free trade and establish unfair practices, thereby increasing the cost of services and see rejection from all stakeholders in the long term.

As healthcare reforms in US and insurance regulations in UK impacted the market in a big way in recent times, businesses have to align themselves to these new challenges and opportunities without allowing costs to rise, said the WNS chief.

"Times are going to be uncertain and complicated for sure. It is important for us to keep rising on the higher end of the value curve and constantly work towards creating an R&D culture to develop new and innovative solutions for our clients," Murugesh said.

"The other challenge for us will be to sustain our position as a global outsourcing destination, when other countries are emulating the Indian model and building a strong incentive framework for attracting global investment," he added.

On the developments in 2011, Murugesh said, "The only positive shift witnessed was the talk about the rise of Asian economies and India and China anticipated to tip the scales of economic balance in their favour."

"With expectations of market disturbance continuing well into 2012, companies all over the world are realising the importance of aligning their business models to new market realities," said Murugesh.

On the way ahead for the industry in 2012, the WNS chief said, "I think the trend for outsourcing will be ruled by the three 'I's. Ideate, incubate and innovate. Companies that encourage ideation and innovation, and support it with funding to incubate till they can offer it to clients as next-gen outsourcing solutions, are most likely to succeed in the global economic climate ahead."

While cost will never lose its spot as a key driver, a handful of other non-linear drivers like focusing on delivery models, a mix of offshore, near-shore and onshore will also play important roles, he added.

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