The world’s best intellectual and internet resources, low development and infrastructure costs, multilingual capabilities, skilled technical manpower and a time zone differential which enables round-the-clock operations are a few among the many attributes that have facilitated India in emerging as a global sourcing hub for IT enabled services (ITES) and Business Process Outsourcing (BPO) thereby being known as the 21st Century Software Powerhouse. The motive behind the process of outsourcing has mainly been to invest more time, money and human resources in core competencies by sharing risk and maintaining productivity and quality.

Having made an indelible mark in the global BPO business, Indian IT and ITES sector is now thriving in Knowledge Process Outsourcing (KPO).KPO is an advanced extension of BPO emphasizing on cost arbitration.KPO is characterized by highly skilled staff that helps it cut through the core competencies of organizations. KPO is non rule based and involves extensive communication and interaction. KPO involves high complexity and judgment-based work. The key requirements for a KPO to flourish are experienced capabilities of the staff, resource expertise and domain knowledge. United States (US) and United Kingdom (UK) are the key markets for Indian IT-KPO exports.
With the market size estimated to be about $110 billion (as per Nasscom), India continues to dominate the global outsourcing market. Nearly 40% contribution towards India’s outsourcing industry comes from banking and financial services. But the outsourcing industry has been facing major cut throat competition and various challenges like severe shortage of trained and skilled manpower, lack of investment in KPO infrastructure, absence of higher level of control and lack of maintenance of high quality standards to name a few. Besides, there are several problems faced by BPO employees affecting their health and lifestyle eventually leading to decline in total output of the firm.
The authority responsible for the development of outsourcing at the Central level in India is the Department of Information Technology under the Ministry of Communications. Likewise State level Departments of IT have been setup as well. Besides the Central and State Governments the private sector has also been making constant efforts to develop and maintain the outsourcing industry in India on a sustainable basis.