Recently attended BPO summit at Gurgaon and everyone was talking about moving away from FTE or hourly based billing to Outcome-Based-Model......not an easy thing to do. But as the labor arbitrage benefits are shrinking and more and more competition is coming in from countries like Philippines, Indonesia, China etc who are able to offer labor at par with India or cheaper in most cases....your number one USP cannot be labor cost. Indian BPO industry has to find its USP around knowing business processes better than anyone else, owning domain intensive IT enabled platforms and high quality resources (pre-trained). Yes introducing outcome-based-model seems like Cannibalizing revenue but if not done we would anyway lose out to cheaper economies than India and probably to those who are newly entering into this industry and offering outcome-based-model as a differentiator as opposed to conventional model. The choice is ours, take the risk to protect long-term sustainability or slowly but surely get ready to lose.
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