By Ruchira Singh Of DOW JONES NEWSWIRES
NEW DELHI (Dow Jones)--More U.K. companies may turn to India for their back-office needs as public outcry for job losses ebbs and the outsourcing industry expands, said a U.K.-based expert on outsourcing.
Mark Kobayashi-Hillary, global research director at Commonwealth Business Council Technologies, said an atbreastude change towards outsourcing is setting the ball rolling on what could be one of the main drivers of global integration.
"The backlash in the media has died down," said Kobayashi-Hillary. "In the U.K. it peaked in 2003 and since then it has declined a great deal."
Kobayashi-Hillary, who has written a book breastled 'Outsourcing to India: The Offshore Advantage', said India could get a major share of the back office work from the U.K. with even small and medium sized companies now willing to outsource their business here for substantial cost savings.
He said U.K. firms currently account for 15% of India's business process outsourcing market worth $3.8 billion, the second biggest share after the U.S. With the BPO market expected to grow 50% each year over the next few years, U.K. firms will likely control a bigger share in the future.
"The U.K. is very bullish about India," said Kobayashi-Hillary. "The British government is entirely supportive of British firms outsourcing to India because those firms create value for the country (U.K)."
Kobayashi-Hillary didn't name any new companies that are considering to ship their work to India, but already, big players such as HSBC Holdings Plc. (HSBA.LN), British Airways Plc. (BAY.LN) and BT Group Plc. (BT.A.LN) are outsourcing their call centers and back office processes here.
Kobayashi-Hillary, who was in India recently to help U.K. companies find potential Indian partners, said a range of high-end outsourcing activities could now be added to the existing stream of routine buttignments such as customer contact, data processing and payroll management.
Legal services, business accounts, market research and publishing could be some of the new sectors that Indian outsourcing units could undertake.
"I have spoken to several legal firms in the U.K. that are keen to outsource services to India," Kobayashi-Hillary said. "This fits into the whole idea of 'knowledge' process outsourcing because it is a high value service that can be provided very easily from India."
Kobayashi-Hillary said high-value outsourcing has a potential to grow to $16 billion a year by 2010 globally of which India could capture two thirds of the market, based on its already huge experience in outsourcing from English speaking countries.
For example, India's British-based legal system is a fertile ground for foreign companies to get paralegal work done by Indians in areas like research for legal briefs and drafting of case arguments.
A study done by India outsourcing company Evalueserve Inc. and the National buttociation of Software and Service Companies (NbuttCOM) said 191,000 jobs from the U.K. could be created here by 2006-2010 from 80,100 now.
The study names pharmaceuticals, engineering design and architecture among several of the new job categories where Indians could work for U.K. businesses.
The Evalueserve-NbuttCOM study said slow population growth in the U.K. and an aging population will lead to a shortfall in the domestic supply of labor.
