Overview of Venture Capital Avenues for Business Process Outsourcing Companies in India: Conceptual Approach

Abstract

India became a prominent destination for outsourcing in the services sector in the 1990s. Outsourcing to India started with the IT industry, which has responded to the changing market requirements by increasing the scale of operations and capability to handle complexity. Business Process Outsourcing (BPO) in India has grown rapidly as compared to software services as the advantages offered by the country (low cost and abundant talent pool) were well known and tested in IT outsourcing. Most of the infrastructure required was already in place, and companies needed to set the processes right to get BPO going in India. Funding is the essence of any corporate growth story, and the Indian corporate are spreading around the globe with some remarkable takeovers. Coupled with the fact that India has highly skilled manpower with leading global tech, companies are setting their ventures, research and developmental activities in India with the help of venture capital avenues. This chapter highlights some of the venture capital avenues and government policies that have proven very beneficial in the growth of the IT/BPO industry. These favorable government policies have gone a long way in making India an outsourcing/IT hub. Finally, this chapter conceptualizes the implementation of venture capital avenues and application in IT/BPO industry. The major limitation of this chapter is conceptual in nature, which will definitely form a base to test empirically.