BPO Industry and the Phase of Recession

The recent global economic meltdown unrelentingly shattered mammoth conglomerates, distinguished corporations and illustrious industries. The shockwaves had a minifying effect on a number of businesses shrinking them to mere rubbles. Across the globe, the thunderous tornado took billions and billions of investments, fumed certified billionaires into millionaires and millions lost their jobs. In short, this monster avenged almost everyone holding cash and some social status.However, the Business Process Outsourcing (BPO) industry treated the crisis in a different fashion. During the early days of the infamous recession, many thought that the industry will not only escape the wrath of the unfolding economic catastrophe but would actually benefit from it. “The current economic meltdown in the United States and other developed countries is likely to benefit the Indian BPO industry as it would compel more companies in these markets to look at outsourcing as a way to cut costs and enhance efficiencies,” said Samir Chopra, President of the Business Process Industry Association of India (BPIAI), in December 2008.A number of blogs argued that the economic collapse was prevalent only in the ‘core states’ and that the BPO industry stood a good chance to obtain maximum out of the ‘milking cow’. Interestingly, the argument seemed right when always highly-indexed juggernauts like GE, Microsoft and American Express took their tails to the outsourcing hub, India. Some of the outsourcing companies in third world countries did indeed made humongous profits. According to a report by India Times on August 19th, 2009, IT companies were actually looking at BPO to soften recession impact. Then a survey conducted by BPOVoice.com in November later that year, revealed that “the industry took undue advantage of the recession with profitable companies also cutting expenses and annual appraisals.” However, a large number of respondents felt that the BPO business has all the necessary potential to amass profit many folds higher provided the top management is more organized and accountable. A recently published detailed study by the renowned research firm, Gartner, evaluates the impact of recession on BPO and its future. The report estimates outsourcing to grow five folds in the next year.After the deck of recession is over, many are calling it ‘a recession proof industry’. Some have found that outsourcing has expanded at an exponential rate. For example, US $270 million Indian BPO industry in 2007 had swollen to over a billion dollar industry in 2010. On the other hand, another research suggests that the unprecedented growth of the Indian BPO industry will continue, predicting it to be a US $29 billion industry in 2013.In the light of the above mentioned researches, reports and findings, it is safe to say that the original anticipations about the impact of economic meltdown on BPOs were wrong. Wrong in a sense, that the industry has benefited from it a lot more. There is not a shade of any doubt that the global economic crisis had a reverse effect on outsourcing making the massive growth of the industry possible which was unlikely to happen without the recession.