There is optimism surrounding the Indian economy after the release of the nation’s GDP figures and a recent decision by Moody’s, the credit ratings agency, to upgrade the country’s rating for the first time in more than a decade. The rosy outlook stems from an expectation that Narendra Modi’s institutional and fiscal reforms will improve the long term economic outlook of the nation, which has been plagued with stagnating growth in recent years.

The BPO industry should take courage from this outlook, which represents a maturing of the economy and the outsourcing industry in particular. Outsourcing firms are moving from a model that simply capitalises on labour arbitrage, where people are employed to carry out routine and repetitive tasks. The BPO industry is reaching its maturity to become a technology partner equipped with the latest innovations in machine learning, and staffed with the country’ brightest minds.

Firstly, as a growing hub for technology excellence, observers of the Indian tech scene should take note of what is happening in regards to large firms setting up their own parallel operations in the country, beyond the simple support function. Goldman Sachs recently set up their Bangalore operation which not only supplied operational support services to European and US offices, but also provided ‘parallel services’ in the form of analytics and data modelling.

The workforce that is manning this ‘new back office’ is increasingly representative of India’s emergence as a leader in STEM education. It is not uncommon to find a clutch of highly skilled and highly qualified scientists (up to PhD level in many cases) providing data services to clients in alternate geographies.

These individuals are increasingly drawn to India as a result of the better opportunities for high-aptitude roles. Some have even pointed to the growing protectionism and isolationist visa-policies of some Western nations as contributing to the trend of young and dynamic Indian tech workers returning to their land of birth.

The need for digital transformation services across many western businesses is accelerating the growth of India’s high-skill, high-aptitude workforce and the trend is set to increase as the demand from digital services on an agile software-as-a-service (SaaS) basis continues.

Many larger firms are still lagging behind when it comes to embracing digital opportunities in the form of machine learning, AI tools and data analytics, especially in the established BFSI sector. When it comes to a large organisation that have been trading for perhaps over 100 years, the likelihood that it can immediately integrate these technologies greatly decreases as dated legacy systems hamper technology integration.

This is felt particularly within the BPO sector. Outsourcing began as a way to cut IT costs, but has now become a key part of helping organisations to remain competitive in the digital age. Today the industry is increasingly at the forefront of innovative technologies such as artificial intelligence (AI) and automation.

For instance, a common issue for large banks is that, despite flashy front-end digital services, mortgages and other loans take a lot of time to manually approve, opening them up to competition from more agile entrants. Indian expertise has driven automation solutions to satisfy these problems, reducing approval time from 11 days to 48 hours for one leading bank.

The Indian economy has adapted and ‘leap-frogged’ more established economies in many ways, which do not have the same ability to provide cost-efficient and agile technology services across sectors. The latest reassessments from international ratings agencies such as Moody’s reflect a broader optimism that India’s fortunes as a provider of third-party technology services has never been stronger.

Investments from large multinationals in enhanced back-office services from players such as Goldman Sachs go some way to supporting Moody’ assessment. With continued investment in the areas that the nation excels in, such as the STEM education areas, India will be able to compete on a global level with up-start hubs such as Manila.

Last quarter’s GDP figures have reinforced the wave of optimism that is felt by many executives in the BPO space. From the client’s perspective, this can only be a positive result – continued excellence depends on sustained investment in the latest technologies and education for those innovators who operate them.

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