New market opportunities for BPO`s in legal and equity research outsourcing

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A Research Report on

“New market opportunities for BPOs in legal & equity

Research outsourcing.”

Submitted in partial fulfillment of the requirements ofthe MBA Degree Bangalore University

Submitted byMahesh B Patil

Register Number05XQCM6043

Under the guidance of

Prof. Jai Raj Nair

M P BIRLA INSTITUTE OF MANAGEMENT

(Associate Bharatiya Vidya Bhavan)

43, Race Course Road, Bangalore-560001

2005-07



DECLARATION

I hereby declare that the project report titled “New market

opportunities for BPOs in legal & equity Research outsourcing ”

is a record of independent work carried towards the partial fulfillment

of the requirements for the Masters Degree in Business

Administration course of Bangalore University, at M.P. Birla Institute

of Management Associate Bharatiya Vidya Bhavan, Bangalore –

560001.

This has not been submitted for the purpose of an award or degree of

any other institution.

Place: Bangalore. (MAHESH PATIL)

Date: (Register Number: 05XQCM6043)



ACKNOWLEDGEMENT

A teacher is a perennial source of inspiration and guidance in all the

academic activities of his students throughout. I whole-heartedlyextend my deep and sincere gratitude to Prof. Jai Raj Nair, faculty

for System, MPBIM, for his continuous guidance and help provided

for completing this research study.

I am also grateful to Dr N S Malavalli, Principal, M.P Birla Institute of

Management for his full support and encouragement while I was

conducting this research.

I am also thankful to Prof. S.S. Santhanam, M.P Birla Institute of

Management for sharing his expertise in the field of Statistics with me

whenever I approached him.

I also express my gratitude to all friends and family members for

extending their helping hand whenever I approached them. Without

their help this research could not have been presented in a proper

manner.

MAHESH PATIL



GUIDE CERTIFICATE

This is to certify that the dissertation entitled “N ew market

opportunities for BPOs in legal & equity research outsourcing ”

is an original study conducted by Mahesh Patil, bearing register

number 05XQCM6043, of M. P. Birla Institute of Management,Associate Bharatiya Vidya Bhavan, under my guidance. This has not

formed the basis for the award of any Degree/Diploma by Bangalore

University or any other University.

Place: BangaloreDate Prof. Jai Raj Nair



PRINCIPAL’S CERTIFICATE

This is to certify that this report titled “New market opportunities for

BPOs in legal & equity research outsourcing ” is the result of

project work undergone by Mahesh Patil, bearing the Register

Number 05XQCM6043, under the guidance of Prof. Jai Raj Nair.This has not formed a basis for the award of any Degree/Diploma for

any University.

Place : Bangalore

Date : Dr. Nagesh.S.Malavalli



Abstract:

Having made an indelible mark in the global BPO business, Indian IT and ITeS

sector is now thriving in Knowledge Process Outsourcing (KPO). RNCOS, in its

market research report "KPO - The New Outsourcing Avenue for Indian BPO

Market" estimates that the world BPO market is worth US $234 billion with the

contribution from India, worth $5.7 billion. The Indian BPO industry includes basic

data and market research, equity research, management, engineering design,

animation and simulation, medical content & services and education and

publishing. India as a major KPO player in the world has inherent advantages

because of its intellectual and Internet resource. The resulting economic success

of the BPO industry has taken many firms to their advanced knowledge work tooff shore destinations.

The Indian KPO sector has immense opportunities for the SMEs. The SMEs can

change their costs as per the short-term demands, which can create new

business models. This market research report presents the evolution of KPO

market in India, tuned for the growing offshore business. The report analyzes the

demand and supply, new opportunities and challenges faced by the KPO

industry.

This study is an attempt to identify the new market opportunities for BPOs in the

areas of Legal process outsourcing and Equity Research Outsourcing



REPORT HIGHLIGHTS

•

Overview of the BPO and KPO industry and its key economic indicators.• Study of the present global scenario, Indian BPO and KPO scenario, and

a clear roadmap ahead for the new entrants and present operators.

Presentation of a vertical industry perspective and forecasts by corporate

functions.

• Highlights of the NASSCOM initiatives and strategies.

• BPO market size and growth by sectors, BPO companies' shares,

employment opportunities and attrition rate.

• Comparison of Indian BPO sector with other leading BPO countries like

China, Russia, Philippines, Ireland, Canada and more.

• Challenges and threats faced by the Indian BPO industry in current

economic standards.

• Recent developments and current issues in the industry.



CHAPTER 1

INTRODUCTION



What is outsourcing?

Outsourcing is the transfer or delegation to an external service provider the

operation and day-to-day management of a business process. The customer

receives a service that performs a distinct business function that fits into the

customer's overall business operations.

There are two principal types: "traditional" outsourcing and "Greenfield"

outsourcing.

In "traditional" outsourcing, employees of an enterprise cease to perform the

same jobs to the enterprise. Rather, tasks are identified that need to be

performed, and the employees are normally hired by the service provider. For

example, an information technology outsourcing may include a transfer of

responsibility for management of data centers and networks (LAN, WAN, and

telecommunications). In the field of facilities management, individuals acting as

property managers might become employees of a facilities management

company.

In "Greenfield" outsourcing, the enterprise changes its business processes

without any hiring of personnel by the service provider. For example, the

enterprise might hire a startup company to provide a new service, such as

wireless remote computing, that was not previously managed internally.



1. Legal Outsourcing

Legal outsourcing refers to the practice of a law firm obtaining legal support

services from an outside law firm or legal support services company. When the

outsourced entity is based in another country the practice is sometimes called

Offshoring.

Legal Outsourcing has gained tremendous ground in the past few years in the

United States. Legal Outsourcing companies, primarily from India , have had

success by providing services such as document review, legal research andwriting, drafting of pleadings and briefs and providing patent services.

In-house law departments of some multinational firms such as DuPont , General

Electric, United Technologies, Bayer, Microsoft, Cisco, Oracle Corporation and

Sun Microsystems have been using legal outsourcing for many years.

India has a huge potential in the legal outsourcing market. A study by Forrester

places the number of jobs in the field increasing to 79,000 by 2015. Though Indiahad earned over $6.7 billion in United States-based outsourcing services such as

software and call centers,as of March 2005, the field of legal outsourcing has

been largely untapped owing primarily to the complexity of the work and the

fragmentation of the legal market in the United States.

The biggest criticism to legal outsourcing is the distinction of legal work as being

complex and specialized to the particular jurisdiction in which a client seeks

representation. Unlike other types of outsourcing the practice of law remains

constrained by ethical and technical difficulties. Lawyers in the United States, for

example, are limited to practice in the federal court system and in the state court

system in which they have passed their BAR exam. This means that direct

outsourcing of law work, such as representation in court, remains in the hands of





competitors. Outsourcing usually entails the employment of workers in offshore

locations where compensation is drastically lower. This means that the workers

handling most of the law firm’s important documents have an economic incentive

to transfer the information into the hands of the highest bidder. Other types of

outsourcing also uncovers similar issues but unlike the development of software,

legal work consists of quantifiable and finished documents whose transfer is both

more viable and the transfer of which might not raise red flags. For example a

piece of software under development in an offshore location might consist of

already protected and published pieces that are hard to steal or transfer. Legal

work, on the other hand, consists mainly of pieces of intangible information that

are floating around that can easily be exploited without much warning as to its

compromised status. In many cases legal work is more susceptible than other

kinds of outsourced work since it consists of easily identifiable clientele on the

other side of the litigation for the purchase of information.



2.Equity Research Outsourcing

If numbers are anything to go by, then the KPO industry will help create a verybright future for India. The story of the KPO’s is fairly new and KPO’s might not

be very large, however the numbers predicted are huge.

The Mckinsey Global Institute estimates that the volume of offshore outsourcing

will increase by 30 to 40 % for the next 5 years. 3.3 million Jobs will be generated

overall by the year 2015. Deloitte research predicts the outsourcing of 2 million

financial sector jobs by 2009.

In this scenario, India will act as the primordial sea using its biggest strength -that

is a supply of at least 2 million graduates and 300,000 Post Graduates - to help

the KPO industry evolve into a mass job generator. There are many countries in

the race. However, today all roads lead to India.

Primary reasons for such an attraction being the cost of labour, which is

significantly lower than in the West and that India is, tested ground. Through its

BPO and IT industries, India has proven that it can deliver high quality services.

Equity research is one of the key areas in which KPO will flourish. On average

Wall Street is losing $ 4 billion a year on producing equity research. To save on

costs and to increase their value proposition to clients, Wall Street is discovering

the value proposition of operating in low cost countries.

Many global investment banks have also been quietly building their back office

research in India. No matter how cost effective a back office in India might prove

to be it is still a field where experts can establish themselves and carve a niche

for themselves attaining marked professionalism. Copal Partners is one such firm

having complete expertise in the financial research outsourcing market



Joel Perlman, Co-founder and President of Copal Partners says, “Outsourcing is

a very good thing for India. It will totally change the Indian economy. In 10 years,

India will have become the knowledge center of the world. And it will not be

because India is cheaper (this will go away), but because India has the scale in

terms of people.”



CHAPTER 2

REVIEW OFLITERATURE



LEGAL OUTSOURCING

Legal outsourcing refers to the practice of a law firm obtaining legal support

services from an outside law firm or legal support services company. When the

outsourced entity is based in another country the practice is sometimes called

Offshoring.

Legal Outsourcing has gained tremendous ground in the past few years in the

United States. Legal Outsourcing companies, primarily from India, have had

success by providing services such as document review, legal research andwriting, drafting of pleadings and briefs and providing patent services.

India has a huge potential in the legal outsourcing market. A study by Forrester

places the number of jobs in the field increasing to 79,000 by 2015. Though India

had earned over $6.7 billion in United States-based outsourcing services such as

software and call centers, as of March 2005, the field of legal outsourcing has

been largely untapped owing primarily to the complexity of the work and the

fragmentation of the legal market in the United States.

Outsourcing is gradually becoming the backbone of Indian service sectors. In the

last fiscal India earned $6.7 billion by providing services in software, technology

and manufacturing outsourcing. The benefit of the outsourcing companies in the

US would translate into a cost saving of about 10% to 12%. The potential of the

Indian resources to absorb the increasing demand in legal outsourcing is

because India enjoys the economic advantages of the wage difference and less

perks and overheads,” the report says.

National Association of Software and Service Companies (Nasscom) also

projected that legal processing outsourcing providers (LPOs) in India will soon

rise up to three to four billion dollar.



However, this glossy figure has many challenges ahead. The most important

challenge to the newly born sector is the need for Indian lawyers to pass US bar

exams, conflict of interest rules, and data security.

Legal Process Outsourcing (LPO), a niche segment within the Knowledge

Process Outsourcing (KPO) space, is attracting international law firms who are

outsourcing legal work to India. Within the LPO industry, it is patent outsourcing,

which is catching up faster than the rest of LPO jobs.

While major firms in the US quote up to $15,000 for preparing and filing a patent

application, companies based in India deliver the same work for $2,500-3,500 in

India. This allows companies to file additional patents within the same budgets.

Patent outsourcing includes technical research, proof reading, prior article

search, drafting patent application, patent amendments among others. This

includes a huge amount of research for patents being filed in US courts. Some

Indian companies have already targeted the opportunity, specialising in patent

outsourcing.

It is not just pharma, but also engineering companies who need to patent their

designs. Some multinational engineering companies with captive engineering

design centres in India are already off shoring patent research and filing.

According to Nasscom estimates, the legal offshoring segment of the Indian BPO

industry is worth about $60-80m. It also estimates that the industry has about 50-

60 firms that employ about 700 lawyers. Though cost arbitrage is definitely the

most attractive proposition, patent work is coming to India as US and UK law

firms are facing a talent crunch.

It is estimated that about 35,000 attorneys in the US work on intellectual

property-related issues, but the increasing workload will ensure more off shoring

for non-core services. Many companies too are cashing on this trend.



LPO salaries range from Rs. 25,000-30,000 per month for a fresh law graduate.

Interestingly, players in the segment say that the curriculum in Indian law

colleges is comprehensive. Looking at the growth opportunity, LPOs are keen to

move up into patent outsourcing.

Legal Business Process Outsourcing service helps Law Firm's to increase there

service value by outsourcing low end legal work to LPO firms and freeing

attorney's to concentrate on specialized legal BPO services. It is a way of

transforming law firms into a more effective organization.

In today's competitive, worldwide legal market; effective legal support requires a

combination of legal capabilities: the ability to deliver highest quality, clearly

stated legal BPO service, deep knowledge of client markets and their individual

commercial and regulatory standards; acceptance by regulators; and perhaps

most importantly, common sense understanding of the client's commercial

objectives. When you require legal BPO Service in relation to: Transcription,

Coding, Document Management, Scoping, Billing, Secretarial and Paralegal bpo

services; state of the art service is available from these providers who have a

team of experts.

As a full service Legal resource, such firms offer specialized solutions across the

broad and diverse legal marketplace – From small boutique practices to regional

and national law firms..

The gamuts of Service Offering in Legal BPO are the following.

Legal Transcription

Offers accurate tape and digital voice transcriptions for Law firms. Transcribes

your audio files (wav, vox, dss, mp3, etc.) all within a 12-hour period or as per the

client requirement with an accuracy rate of 98.7%. These firms have expertise in

transcribing for all known specialties. Delivery of transcripts is by secure Email or

through FTP.



These firms go to great lengths to control the quality of their transcription service.

All their transcriptionists have excellent legal terms knowledge and typing ability.

They have attorneys from the top Indian law schools, having at least three years

of legal Practice experience. Their final quality control screen is done by

Experienced Attorneys, who thoroughly review the work for accuracy and proper

format.

Document Management

Database developers work with the law firm's legal team to design a custom

database to provide efficient and secure document access. They ensure that

their database solutions meet their client’s document management needs, and

are backed up according to industry standards.

Legal Billing

These firms’ accounting personnel will be responsible for processing attorney

time sheets and related billing functions. Billing scheme is flexible, accurate.

They have standard billing as well as client specific on case to case basis.

Legal coding

Smart intuitive coding and indexing documents can give law firms a competitive

edge in a case and in the courtroom. These firms assist the client in developing

the coding specifications. Typical fields include Bates Numbers, Attachment

Range, Document Title, Author, Recipient, Names in Text, Dates, Document

Type and Document Characteristics.

Scoping & Court Reporting Services

Their team of experienced scopists have extensive experience in the legal arena

such as that of expert witnesses and patent infringements etc. They can handle

heavy technical work and will always research any and all unfamiliar names and

terms. Court reporting service that they offer is done through experienced , fast ,



reliable and certified/licensed professionals specializing in medical malpractice;

patent law; construction defect liability; product liability; conventions;

administrative hearings; seminars; conferences; meetings; arbitrations etc.

Legal Translation

Language Services combines a large in-house translation staff with helpful,

personalized attention in order to provide clients with a service that responds to

their language needs. Whether you require the translation of a summons and

complaint or the transcription of an evidentiary tape, they provide professional

solutions. They also assist on special projects such as the preliminary review of

foreign language documents in discovery, and research on foreign language

legal texts.

Data Entry Service

Legal data entry services can eliminate document overload by taking your hard

copy data of depositions, hearings, arbitrations, meetings, and other events etc

that need to be documented and moving it into a workable database. Enabling

better control over your law firms information and regulate knowledge

management more efficiently in all aspects of your business. Online data entry

services will accelerate business processes by collecting paper documents and

turning them into accurate information for your business applications and

databases.

These firms go to great lengths to control the quality of our services. All their data

entry personnel have excellent legal terms knowledge and research ability.

Experienced Attorneys, do quality control from top Indian law schools, having at

least three years of legal practice experience. Attorneys thoroughly review the

work for accuracy and proper format.



Secretarial and Paralegal BPO services

It includes a range of paralegal bpo services which include processing claims,

data entry, proofreading services, document review, deposition digesting and

shepardizing cases.

e Filing Service

e Filing Service offers a world class electronic return and payment submission

solution to attorneys and corporate counsels for Incorporation submission etc..

The state of the art technology solution evolved in house for form processing can

handle real time, on demand requirements. Electronic applications received via

the electronic form service are transferred from the XML server to the back-end

system, which makes encoding and data entry unnecessary.

OCR & Scanning Service

They pride on their ability to meet clients' document imaging needs. They use the

latest scanning technology and documents will be scanned to standard TIFF,

PDF or other formats to meet the client's specific needs.



Legal work outsourcing potential waiting to be tapped'

RIGHT from filing patents to drafting transnational contracts to creating

necessary information back-up for global corporations in litigations and providing

support in contract management - - ,one can outsource a wide range of legal

work, bringing in similar scale of economies that business process outsourcing

brings to companies.

Indian companies have come of age offering legal outsourcing and making a

difference. They are eyeing the $200 billion US market. Significantly, while there

are different projections as to what is in store for the Indian market place, one

estimate by Forrester puts this at about $3.9 billion by 2010.

Interestingly, this is not just about attorneys, law grads or practicing professionals

of law at the bar alone. A host of other professions such as engineers and

technology experts would be part of this trend, bringing in different domains and

pooling resources to provide the end product and service.

The co-founder, Chairman of Pangea3, a legal outsourcing services provider

based in the US with operations in India, Mr Sanjay Kamlani, said, "a patent-

related services can be offered from outsourced centres at a fraction of the cost

needed to process it there.. That means for the same amount, a US company

can file for more patents."

Speaking to Business Line, Mr Kamlani, a co-founder of OfficeTiger and its

general council and Chief Financial Officer then, said that Pangea3 has been

seed funded by Mr Sunil Wadhwani, a co-founder of iGate and Mr Avinash Bajaj,

former CEO of eBay India.



"There is lack of clarity in what constitutes legal services in the outsourced mode.

This has created different assessment of the current market size and the future

potential India holds in the international marketplace, given its advantages.

If you look at all major IT firms, and leading business process outsourcing

companies, they all handle legal services in one form or the other. But when it

comes to classifying them, they are clubbed with general BPO players. This

brings in disparity," he said.

If you analyse the market size from a different perspective, it clearly emerges that

the market is now about $1.5 billion and is projected to grow to about $3.9 billion

to $4 billion by the year 2010.

This is something which research firm Forrester also predicts.

They come to us

"If what can be offered under the ambit of legal services is analysed, we are just

looking at the tip of the iceberg. This can be expanded to a range of related

services including content and support services. It brings many advantages. This

can be gauged from the fact that we don't have to market our services. In fact,

law firms approach us for services," Mr Kamlani said.

"Often people believe that such services require different skills covering a range

of services. It is not the case. What it needs is know-how, and not just

knowledge. Since the approach is more or less similar be it in the US, the UK or

India, it is pretty easy to adjust to requirements," he said.



Legal outsourcing to fetch 79,000 jobs

Outsourcing is gradually becoming the backbone of Indian service sectors. In the

last fiscal India earned $6.7 billion by providing services in software, technology

and manufacturing outsourcing.

Legal services are the next destination for a cool BPO. According to a study by

the US based Forester Research, the current annual value of legal outsourcing

which is worth $80 million can rise up to $4 billion and can fetch 79,000 jobs in

India by 2015.

“The benefit of the outsourcing companies in the US would translate into a cost

saving of about 10% to 12%. The potential of the Indian resources to absorb the

increasing demand in legal outsourcing is because India enjoys the economic

advantages of the wage difference and less perks and overheads,” the report

says.

National Association of Software and Service Companies (Nasscom) also

projected that legal processing outsourcing providers (LPOs) in India will soon

rise up to three to four billion dollar.

But this glossy figure has many challenges ahead. The most important challenge

to the newly-born sector is the need for Indian lawyers to pass US bar exams,

conflict of interest rules and data security.

EQUITY RESEARCH OUTSOURCING



If numbers are anything to go by, then the KPO industry will help create a very

bright future for India. The story of the KPOs is fairly new and KPOs might not be

very large, however the numbers predicted are huge.

The Mckinsey Global Institute estimates that the volume of offshore outsourcing

will increase by 30 to 40 % for the next 5 years. 3.3 million Jobs will be generated

overall by the year 2015. Deloitte research predicts the outsourcing of 2 million

financial sector jobs by 2009.

In this scenario India will act as the primordial sea using its biggest strength - that

is a supply of at least 2 million graduates and 300,000 Post Graduates - to help

the KPO industry evolve into a mass job generator. There are many countries in

the race. However, today all roads lead to India. Primary reasons for such an

attraction being the cost of labour, which is significantly lower than in the West

and that India is tested ground. Through its BPO and IT industries, India has

proven that it can deliver high quality services.

Equity research is one of the key areas in which KPO will flourish. On average

Wall Street is losing $ 4 bn a year on producing equity research. To save on

costs and to increase their value proposition to clients, Wall Street is discovering

the value proposition of operating in low cost countries. Many global investment

banks have also been quietly building their back office research in India. No

matter how cost effective a back office in India might prove to be it is still a field

where experts can establish themselves and carve a niche for themselves

attaining marked professionalism. Copal Partners is one such firm having

complete expertise in the financial research outsourcing market. Joel Perlman,

Co-founder and President of Copal Partners says that “outsourcing is a very

good thing for India. It will totally change the Indian economy. In 10 years, India

will have become the knowledge center of the world. And it will not be because

India is cheaper (this will go away), but because India has the scale in terms of

people.”





Though India tops Nasdaq's priority list among emerging markets, it needs to be

more proactive to "tell its good story to the US investors,'' he added. Nasdaq may

set up advisory services to Indian companies and US investors in association

with local industry bodies like the National Association of Software and Services

Companies (Nasscom), Mr Weild said. "I will discuss this issue with Nasscom,''

he added.

Close to 150 Indian companies follow the US GAAP accounting structure, which

is a fair indication of their intent to go for overseas listing, Mr Weild said.

Commenting on whether the current market conditions cramping such intention,

Mr Weild said, "companies can go for listing whenever they need to raise

capital.''



CHAPTER 3

INDUSTRY PROFILE





a) Outsourcing BPO to India - The Cost Savings

Bob Beauchamp, BMC Software President, and CEO talked about the backlash

in the US where an economic rebound had not created jobs. Addressing the

Product and Embedded Software Summit in Bangalore, he said that there maybe a backlash, "But as studies have indicated that for every one dollar invested in

India, the value derived by the US economy is between $12-14." He termed

outsourcing to India as "irreversible" and said it was a "must have" to improve the

Indian and global economy.

NASSCOM has tried to address some of the concerns voiced by anti-outsourcing

parties especially about the benefits to the American economy.

The study shows that US businesses have witnessed significant cost savings by

off shoring to India.

The US banking, financial services and insurance (BFSI) sector's costs

are 7-10% lower than that of its European counterparts

American BFSI companies have saved $6 billion in the last four years by

off shoring to India.

b) Outsourcing BPO to India - Creates Jobs

It seems contradictory to say that the migration of jobs from one country to

another actually creates jobs in the former. However, that can ultimately be the

case. According to the NASSCOM report, the BFSI sector have saved $6 billion

in the last few years and due to these savings have added 125,000 new jobs in

this period thus preventing layoffs.

Nearly 170 Indian IT companies have offices in the US and they employed nearly

60,000 people in the US in 2001. These people paid nearly $810 million in taxes

in 2001. Employees of Indian IT firms bought goods and services worth $1.2

billion in the US and paid nearly $300 million as social security in 2001.



c) Outsourcing BPO to India - The Value Addition

The NASSCOM study continues to explain the added benefits. BFSI off shoring

has resulted in quality and productivity gains of 15-20% and customer

satisfaction of almost 85%.

The report gives a striking example of the success of the automobile industry in

the US due to outsourcing. Today, this industry is the largest in the world and two

of the biggest automobile companies are American. The industry has the same

number of professionals it did in 1994 as it did in 1974, which is 900,000. Over

this same period sales and services in this sector grew 20% from 2 million to 2.4

million. Outsourcing gave this industry a competitive edge and opened up

opportunities in terms of investing in new equipment and re-engineering

processes.

The US steel industry, however, resisted outsourcing and suffered greatly

despite several tariffs and quotas.

d) Outsourcing BPO to India - The Long Term Benefits

Amidst the mounting furor against outsourcing, one has to examine things more

objectively. In the short term, cost benefits and value addition may not be

apparent because of the initial investment involved in training and infrastructure.

Also outcries against migration of jobs seem to cement the argument. However,

as the NASSCOM report shows, the long-term benefits are very powerful. Not

only does outsourcing BPO to India allow global companies to avail of some of

the best talent and expertise at competitive rates, but it also allows the company

to actually save several jobs, which it might have had to lay off otherwise



Why Outsource Work?

a) Because you don't have the time to do it yourself.

You have a product to develop and you have to get it into the market before your

competitor does.

b) Because you don't have the money to do it yourself.

Your business is growing exponentially but your resources can't cope with the

growth.

c) Because you'd rather focus on mission-critical issues.

You're not interested in frittering away time and energy on non-core functions.

d) Because you don't have the skills to do it yourself.

You need the best talent in the world, but it's scarce/out of reach/ just not

available in your country.

In today's globalized and networked economy, outsourcing has never been so

easy or made so much business sense. The question is not "Why outsource?"

but rather, "Why not?"

The Outsourcing History of India

The idea of outsourcing has its roots in the 'competitive advantage' theory

propagated by Adam Smith in his book 'The Wealth of Nations' which was

published in 1776. Over the years, the meaning of the term 'outsourcing' has

undergone a sea change. What started as the shifting of manufacturing to

countries providing cheap labour during the Industrial Revolution, has taken on anew connotation in today's scenario. In a world where IT has become the

backbone of businesses worldwide, 'outsourcing' is the process through which

one company hands over part of its work to another company, making it

responsible for the design and implementation of the business process under

strict guidelines regarding requirements and specifications from the outsourcing



company. This process is beneficial to both the outsourcing company and the

service provider, as enables the outsourcer to reduce costs, increase quality in

non-core areas of business, and utilize his expertise and competencies to the

maximum. Now we can see the benefit to the service companies in India as they

mature, prosper, and build core capabilities beyond what would generally be

possible by the outsourcing company.

Since the onset of globalization in India during the early 1990s, successive Indian

governments have pursued programs of economic reform committed to

liberalization and privatization. Till 1994, the Indian telecom sector was under

direct governmental control and the state owned units enjoyed a monopoly in the

market. In 1994, the government announced a policy under which the sector wasliberalized and private participation was encouraged. The New Telecom Policy of

1999 brought in further changes with the introduction of IP telephony and ended

the state monopoly on international calling facilities. This brought about a drastic

reduction and this heralded the golden era for the ITES/BPO industry and

ushered in a slew of inbound/outbound call centres and data processing centres.

Although the IT industry in India has existed since the early 1980s, it was the

early and mid 1990s that saw the emergence of outsourcing. One of the first

outsourced services was medical transcription, but outsourcing of business

processes like data processing, billing, and customer support began towards the

end of the 1990s when MNCs established wholly owned subsidiaries which

catered to the process off-shoring requirements of their parent companies. Some

of the earliest players in the Indian market were American Express, GE Capital

and British Airways.

The ITES or BPO industry is a young and nascent sector in India and has been

in existence for a little more than five years. Despite its recent arrival on the

Indian scene, the industry has grown phenomenally and has now become a very

important part of the export-oriented IT software and services environment. It

initially began as an activity confined to multinational companies, but today it has

developed into a broad based business platform backed by leading Indian IT



software and services organizations and other third party service providers. The

ITES/BPO market expanded its base with the entry of Indian IT companies and

the ITES market of the present day is characterized by the existence of these IT

giants who are able to leverage their broad skill-sets and global clientele to offer

a wide spectrum of services. The spectrum of services offered by Indian

companies has evolved substantially from its humble beginnings. Today, Indian

companies are offering a variety of outsourced services ranging from customer

care, transcription, billing services and database marketing, to Web

sales/marketing, accounting, tax processing, transaction document management,

telesales/telemarketing, HR hiring and biotech research.

Looking at the success of India's IT/software industry, the central governmentidentified ITES/BPO as a key contributor to economic growth prioritized the

attraction of FDI in this segment by establishing 'Software Technology Parks' and

'Export Enterprise Zones'. Benefits like tax-holidays generally enjoyed by the

software industry were also made available to the ITES/BPO sector. The

National Telecom Policy (NTP) introduced in 1999 and the deregulation of the

telecom industry opened up national, long distance, and international connectivity

to competition. The governments of various states also provide assistance to

companies to overcome the recruitment, retention, and training challenges in

order to attract investments to their region. The National Association of Software

and Service Companies (NASSCOM) has created platforms for the

dissemination of knowledge and research in the industry through its survey and

conferences. NASSCOM acts as an 'advisor, consultant and coordinating body'

for the ITES/BPO industry and liaisons between the central and state

government committees and the industry. The ardent advocacy of the ITES/BPO

industry has led to the inclusion of call centers in the 'Business AuxiliaryServices' segment, thereby ensuring exemption from service tax under the

Finance Bill of 2003.

These measures have led to a steady inflow of investments by large foreign

companies such as Reuters, for establishing large captive ITES/BPO facilities



across India. Moreover, the existing ITES/BPO operations of major multi-

nationals are also being ramped up to cater to the ever increasing demand for

better and speedier service. Almost all of India's top ITES/BPO giants have

announced some form of expansion and are in the process of hiring manpower to

fill the additional seats. India's competitive advantage lies in its ability to provide

huge cost savings thereby enabling productivity gains and this has given India an

edge in the global ITES/BPO marketplace. NASSCOM studies pinpoint the

following factors as the major reasons behind India's success in this industry

(Source: www.nasscom.org):

• Abundant, skilled, English-speaking manpower, which is being harnessed

even by ITES hubs such as Singapore and Ireland.

• Improving telecom and other infrastructure which is at par with global

standards.

• Strong quality orientation among players and their focus on measuring

and monitoring quality targets.

• Fast turnaround times and the ability to offer 24x7 services based on the

country's unique geographic location that allows for leveraging time zone

differences.

• Proactive and positive policy environment which encourages ITES/BPO

investments and simplifies rules and procedures.

• A friendly tax structure, which places the ITES/BPO industry on par with IT

services companies.

Outsourcing to India offers significant improvements in quality and productivity for

overseas companies on crucial parameters such as number of correct

transactions/number of total transactions; total satisfaction factor; number of

transactions/hour and average speed of answer. Surveys by NASSCOM also

revealed that Indian companies are better focussed on maintaining quality and



performance standards. Indian ITES/BPO companies are on an ascending curve

as far as the quality standards are concerned. Organizations that have achieved

ISO 9000 certification are migrating to the ISO 9000:2000 standards and

companies on the CMM framework are realigning themselves to the CMMI

model. Apart from investing in upgrading their CRM and ERP initiatives, many

Indian ITES companies are beginning to acknowledge the COPC certifications

for quality and are working towards achieving COPC licences.

Despite being a fledgling in the global ITES/BPO industry, the Indian ITES

industry recorded a growth rate in excess of 50% in 2002-03. Industry experts

consider this a positive indication of the times to come and a look at the ranking

and the revenue and headcount statistics show the potential of the industry.Theglobal ITES/BPO industry was valued at around US$ 773 billion during 2002 and

according to estimates by the International Data Corporation worldwide, it is

expected to grow at a Compounded Annual Growth Rate (CAGR) of 9% during

the period 2002-2006. NASSCOM lists the major indicators of the high growth

potential of the ITES/BPO industry in India as the following (Source

www.nasscom.org

• During 2003-04, the ITES-BPO segment is estimated to have achieved a

54 percent growth in revenues as compared to the previous year.

• ITES exports accounted for US$ 3.6 billion in revenues, up from US$ 2.5

billion in 2002-03.

• The ITES-BPO segment also proved to be a major opportunity for job

seekers, creating employment for around 74,400 additional personnel in

India during 2003-04.

• The number of Indians working for this sector jumped to 245,500 by

March, 2004.



• By the year 2008, the segment is expected to employ over 1.1 million

Indians, according to studies conducted by NASSCOM and leading

business Intelligence Company, McKinsey & Co. Market research shows

that in terms of job creation, the ITES-BPO industry is growing at over 50

percent.

Surveys of the Indian ITES/BPO industry in 2004 expected it to follow the trends

given below:

• Customer care: Customer care and support services will continue to lead

in terms of revenue generation, with a turnover of around US$ 1200

million in 2003-04., up from last year's turnover of US$810 million.

• Finance: With the financial services segment moving into value added

domains like insurance claims processing, financial management services

and equity research, this segment is expected to clock the highest growth,

with estimates of US$820 million in revenue in 2003-04, up from US$510

million in 2002-03.

• HR services: HR services are also expected to grow and revenues are

expected to touch US$70 million during 2003-04, thereby providing latent

opportunities to the industry's dominant players.

• Payment services: This segment has also been identified as a high

growth area within the industry, and is expected to generate revenues of

around US$430 million for 2003-04, up from US$210 million in 2002-03.

• Administration: Revenues from the administration services segment are

expected to increase from US$ 310 million in 2002-03, to US$540 millionduring 2003-04.

• Content development: The content development services segment

which includes engineering and design services, digitization (GIS),



animation, network management and biotech research, is expected clock

a turnover of around US$520 million in 2003-04.

The availability of technically trained and skilled manpower in India is making

companies across the world look at the country as a profitable base to shift their

high-end support services. Companies like COLT Technology Services are

considering outsourcing their technical back-office support work to India. Other

areas are high-end network engineering/management support. Another field

which is showing immense potential is that of digital content creation and

animation. Animation studios like Walt Disney, MGM and Warner Brothers are

already outsourcing low-end work like clean-ups, tweening and modelling to

India. The availability of skilled and trained manpower and India's ability to keepin step with the latest technological advances in the industry is prompting foreign

studios to consider India as a base to shift other high-end animation work like

storyboarding and developing original content for animated films ad TV series.

Tele-radiology is the next segment that holds great promise, mainly due to the

time zone differences and the availability of highly skilled radiologists and

companies like Teleradiology Solutions have been offering their services to US

and South-East Asian hospitals for the past two years. Engineering services like

CAD/CAM 2D, 3D and CAE modelling and design automation are the latest

additions to the ever increasing list of processes being outsourced to India.

Reasons why outsourcing makes business sense

When you consider the advantages of outsourcing, you'll realize there's a lot to

gain by using it as an intrinsic part of your business strategy.

By outsourcing, you can:

1. Reduce overheads, free up resources

2. Avoid capital expenditure

3. Improve efficiency



4. Offload non-core functions

5. Get access to specialized skills

6. Save on manpower and training costs

7. Reduce operating costs

8. Improve speed and service

9. Establish long-term, strategic relationships with world-class service

providers to gain a competitive edge/li>

10. Enhance tactical and strategic advantages

11. Focus on strategic thinking, process reengineering and managing trading

partner relationships

12. Spread your risks

13. Provide the best quality services, products and people

14. Be reliable and innovative

15. Provide value-added services

16. Increase customer satisfaction

17. Avoid the cost of chasing technology

18. Leverage the provider's extensive investments in technology,

methodologies and people

19. Benefit from the provider's expertise in solving problems for a variety of

clients with similar requirements.

20. Focus scarce resources on time-critical projects such as application

reengineering

21. Obtain needed project management and implementation consulting

expertise, along with access to best practices and proven methodologies

22. Reduce the risk of technological obsolescence and increase efficiency by

consolidating and centralizing functions

23. Keep pace and minimize the impact of rapid changes in applications and

standards

24. Extend the reach to more trading partners quickly and efficiently

25. Reduce the overall IT management burden while retaining control of

strategic decision making.



Why Outsource to India?

Outsource to India for technological agility, quality, flexibility, cost control, time-to-

market and competitive advantage.

India is a talent-rich country: outsource IT talent

India exports software to 95 countries around the world: outsource

expertise in global methodologies

a) India Offers Multiple Advantages

Outsource to stay competitive. Leading companies worldwide realize that

to maintain stay ahead, they need to reduce costs, provide the best

quality, use the latest high-tech skills, and be reliable and innovative

Outsource to a mature industry with world-class systems, systems and

quality

Of the 23 software companies in the world that have achieved the

prestigious SEI-CMM Level 5, 15 of them are Indian. India will soon

have the highest number of ISO-9000 software companies in the world,

according to Nasscom.

b) India has state-of-the-art technologies for total solutions: outsourceturnkey projects

Offshore assignments have moved up the value chain - from data entry to large

and complex turnkey projects of 200 to 300 person years.

Applications include:

E-Commerce

Business Process Re-engineering

System Migration

Maintaining Legacy Systems

System Integration



c) IT is a major thrust area for the Government of India

IT is one of the Government of India's top five priorities.

The National IT Task Force submitted its 108 point Action Plan to promote

IT in the country. The Government of India has approved the plan and is inthe process of implementing it.

A separate Ministry of Information Technology was set up to expedite swift

approval and implementation of IT projects and to streamline the

regulatory process.

Information Technology Act 2000: The Information Technology Bill that

was passed in the Indian Parliament in May 2000, has now been notified

as the IT Act 2000. The IT Bill brings E-commerce within the purview of

law and accords stringent punishments to "cyber criminals". With this,

India joins a select band of 12 nations that have cyber laws.

Software Technology Parks of India offer world-class infrastructure and

various incentives and concessions to encourage foreign investment and

promote software development in India eg 100% Foreign equity is permitted and

approved under the Automatic Route delegated powers to The Director STPI, tax

holiday until 2010, etc.

d) India has a stable government and is one of the world's 10

fastest-growing economies

Fifty years of democracy: Indian service sector contributes a massive 51

per cent to India's GDP.Within this category, the most promising is

computer software export, which grew at an amazing rate of 40-50 per

cent every year during the 1990s.

Excellent investment potential : India ranked third in Asia, just after Japan

and China, in terms of investment potential for the next 10-year period in a

study by the Export-Import bank of Japan.



Privatization of the infrastructure sector : A convergent network is being

created by the intertwining of the ISP, Telecom, VSAT, Cellular and

networking sectors. India's large business houses and Public Sector Units

are working towards creating greater bandwidth availability.

Global Market Size of BPO

Rapid transformation is taking place in the global BPO market. It is accompanied

by increased spending in BPO services. Most of the leading business companies

of the world are adopting BPO as a strategic business solution. The BPO

industry is very diverse, with several sub-segments, each displaying its own

unique characteristics.

According to Gartner, a market research firm, the size of the global BPO market

by 2007 would be $173bn, of which $24.23bn would be outsourced to offshore

contractors. Of this, India has the potential to generate $13.8bn in revenue. "The

projection includes revenues of pure play Indian BPO service providers, captives

operations of MNCs operating in India, third party service providers and BPO

subsidiaries of IT services firms.

North America will remain the dominant market for ITES-BPO services,

accounting for nearly 60 percent of the total ITES-BPO market in 2006. The main

verticals in the North American ITES-BPO market are telecommunications,

financial services, health care and energy. Commonly outsourced processes

include internal auditing, payroll, human resources, benefits management,

contact centers/customer care, payments/ claims processing, real estatemanagement, and supply chain management.

The Western Europe ITES-BPO market is expected to account for 22 percent of

the market by 2006. The financial services sector is the largest consumer of

BPO-ITES services in Europe, followed by utilities and telecommunications.



Human resources, finance and accounting are expected to be the fastest growing

service lines.

The Asia Pacific ITES-BPO market is expected to account for 18 percent of the

total ITESBPO market in 2006. Companies in the Asia-Pacific region have

traditionally outsourced only manufacturing activities. Given the relative infancy

of the ITES-BPO market, this region is expected to experience rapid growth over

the next few years. Growth will primarily be driven by cost-reduction and the

need to focus on core competencies. HR, finance and accounting are expected

to be the key growth areas in the Asia-Pacific region in the years ahead.

Growth of Indian BPO Industry

According to studies conducted by NASSCOM and leading business Intelligence

Company, McKinsey & Co. the Indian IT/BPO segment is expected to employ

over 1.1 million Indians by the year 2008. Market research shows that in terms of

job creation, the ITES-BPO industry is growing at over 50 percent. In the financial

year 2003-2004, ITES-BPO companies were the largest recruiters in the IT/ITES

sector, adding a total of about 70,000 jobs.

An estimated 70,000 new Jobs expected in 2005 in the field pf ITES. Plus there

will be additional hiring to replace industry attrition that is around 25%. On the

other hand BPO and outsourcing services would generate around 1, 25,000 new

Jobs in 2005. McKinsey & Co. predicts global market for IT-enabled services to

be over $140 billion by 2008. In that the opportunity for India will be around $ 17

Billion.

Future Prospects

The future for the IT/BP industry holds bright. It is estimated that 56% of the BPO

market could be India's by the year 2006 with the demand for BPO services

increasing at an annual growth rate of 50 per cent during 2004-06. The pace at



which the Indian BPO market is increasing is tremendous. The market of BPO in

India is likely to be around $9-12 billion by the year 2006 and will employ around

0.4 million people. The BPO market is ready to fire up and India Inc is all geared

for this big opportunity.

This is really great news for India Inc since we have to tackle the BPO backlash

as well. Though there are chances of this party being spoiled by the US led

backlash but then also India is sure to have a large share of the BPO market.

This will go a long way in making India the BPO super power of the world. If the

backlash stays on for sometime, then may be India could only have a 42% share

of the market instead of 56%. Though it is a reality that companies outsourcing

their business operations to Indian BPOs have been saving a lot of money and

also saving jobs of their own countrymen.



CHAPTER 4

RESEARCH DESIGN



Hypotheses

H0: Legal & Equity Research Outsourcing business is set to grow at atleast halfthe rate of the growth rate of the BPO industry

H1: Legal & Equity Research Outsourcing business is not going to create animpact in the business in near future.

Problem Statement

Business Process Outsourcing, is changing at a very rapid pace. It has given

birth to what is known as the Knowledge Process Outsourcing (KPO). It can be

said that KPO is one step ahead of Business Processing Outsourcing (BPO).

KPO firms provide domain-based processes and business expertise, rather thanjust process expertise. All BPOs are evolving into KPOs.

Legal Process Outsourcing is a niche segment within KPOs.It is estimated that

LPOs and Equity Research Outsourcing are going to make a big mark in this

industry.

This study is an attempt to identify the new market opportunities for BPOs in

these two areas of outsourcing which are being talked about in the outsourcing

industry now.



Sampling Plan

1. Population : The target population of my project constitutes of executives

of the BPO industry in Bangalore.

2. Sample survey : Due to wide area of population as well as time and money

constraint, census study could not be conducted. Hence a sample survey

has been conducted.

3. Sample frame : Since the population is considerably large, I could not

obtain a sample frame.

4. Sample unit : The sample unit of my project constitutes of the BPO

executives in Bangalore.

5. Sampling technique : In my project, I have used Convenience Sampling.

This technique has been used due to the non-availability of the sampling

frame and due to time and pecuniary constraint.

6. Sample size : Sample size of my study comprises of 32 respondents.

7. Data collection tools : The data collection tool for my research includes the

semi-structured questionnaire with both close ended (dichotomous) and

open ended questions.

My questionnaire consists of 9 close ended questions and 12 open ended

questions.



Data Collection

Primary Data

The entire primary research study was done in Bangalore. The data collection

tool for my research included the semi-structured questionnaire with both close

ended (dichotomous) and open ended questions

Secondary Data

In addition to the primary research, secondary data was collected from articles

published in dailies, magazines and industry reports through visits to libraries and

also from the worldwide web.

Questionnaire Administration

The Instrument for data collection, in the form of a ‘Structured Questionnaire’,

was designed to elicit information on the future of the legal and Equity research

outsourcing.





Total number of respondents = 32

• 100% of the respondents said yes to question no.1. This means that all

the respondents were aware of the term legal outsourcing.

Are you aware about legal outsourcing?

32

00

5

10

15

20

25

30

35

Yes No

answer

no. of resp

ondents

From the above graph, we can interpret that the awareness level, among theBPO employees, about legal outsourcing is very high. Legal outsourcing is

already making its presence felt in the outsourcing industry.

Since the respondents also include the middle management of the BPO

companies, we can say that the awareness of legal outsourcing has

percolated down to this level already.



• 15 respondents came across the term legal outsourcing for the first time in

the year 2005. 17 respondents came across the term in 2006.

Heard about legal outsourcing for the first time in

which year?

2005

47%

2006

53%

From the above graph we can interpret that there has been a rise in the

percentage of people who became aware of legal outsourcing. This is an

indicator that legal outsourcing is spreading its wings in the BPO industry. Slowlybut surely, it is set to grow in the future. The very fact that the level of awareness

is on the rise among the BPO employees indicates that projects related to legal

outsourcing are increasing in the industry.

47% of the respondents came across this term for the first time in 2005. 53% of

the respondents came across the term for the first time in 2006. The awareness

about legal outsourcing is constantly raising this good indicator.



• 28 respondents have said that legal outsourcing has gained importance

from the time they became aware of it while 4 respondents do not agree to

it.

We see that a whopping 87% of the sample say that legal outsourcing has

gained importance since they became aware of it. This reinforces the

statement that legal outsourcing is making its presence felt in the BPOindustry. That is why 87% of the sample feels that it has definitely gained

importance.

Has legal outsourcing gained importance since the

time you knew it?

Yes87%

No13%



• 100% of the respondents said yes to question no.4. This means that all

the respondents were aware of the term equity research outsourcing.

Are you aware of equity research outsourcing?

32

0

0

5

10

15

20

25

30

35

Yes No

answer

no. of respondents

From the above graph we can interpret that the awareness level, among the

BPO employees, about equity research outsourcing is very high. Equity

research outsourcing is also making its presence felt in the outsourcing

industry.

This also reinforces the statement gathered from secondary data that equity

research outsourcing is going to create a lot of jobs in the years to come. The

awareness supports the fact that Equity research outsourcing is going to be

the next big thing in the future.



• 1 respondent came across the term equity research outsourcing for the

first time in the year 2004. 14 respondents came across the term in 2005.

17 respondents came across the term for the first time in the year 2006.

Heard about equity research outsourcing for the

first time in which year?

2004

3%

2005

44%2006

53%

We can observe that there has been a sharp rise in the percentage of

respondents who became aware of the term equity research outsourcing

since 2004. Hence, we can say that equity research outsourcing has gainedground in a big way from 2005 in terms of the operations being outsourced.

We can infer that Equity research outsourcing was in the nascent stage in

2004 in Indian BPO industry. We see a sharp rise in the level of awareness in

2005. also, there is a steady rise in its awareness level in 2006. This supports

the fact that equity research outsourcing has come to stay in the business

world. Its not just a passing fad but a business with a huge potential in terms

of value and volume.



• 28 respondents have said that equity research outsourcing has gained

importance from the time they became aware of it while 4 respondents do

not agree to it.

From the graph we can say that 87% of the respondents agree to the

statement that equity research outsourcing has gained importance since they

became aware of it. Hence, we can say that equity research outsourcing hascome to stay in this business. It is not a short lived business but a promising

one.

Has equity research outsourcing gained importance

since the time you knew it?

Yes87%

No13%



• Question no.7 of the questionnaire tries to find out if the company, to

which a respondent belongs, handles either or both of legal and equity

research outsourcing.

The survey revealed that none of the companies (to whom my

respondents belong) handle either of the two activities. One of the reasons

is that there are specialized firms that handle the outsourcing of legal and

equity research activities. It would take some time for the bigger firms to

handle these specialized activities in a large scale.

However, one of the respondents says that his firm handles equity

research outsourcing activities though they do not handle legal

outsourcing.

• Question no.8 tries to understand the main activities within legal

outsourcing that a company handles. This question stands not applicable

to all my respondents, the reason for which is mentioned above.

• Question no.9 tries to gather the various activities within equity research

outsourcing handled by the company. One of the respondent said that hisfirm handles equity research outsourcing activities.

Following are the 3 main activities under equity research outsourcing

handled by the firm to which that respondent belongs:

Reference Data Management

Trade Processing

Corporate actions (involuntary)



• In response to question no. 10, 100% of the respondents have said that

legal outsourcing business would grow at a good pace in the future years.

The next question tries to find out as to what percentage growth can be

called as good.

would legal outsourcing grow at a good pace in

the future?

32

00

5

1015

20

25

30

35

Yes No

answer

no. of respondents

From the graph it is very clear that legal outsourcing business is not a bubble

that would burst but a lucrative business. Otherwise, the people in theindustry would not have such a strong intuition that it will grow in a big way.

Legal outsourcing has come to stay in business. This is pretty much clear

from the view of the employees of the BPO industry.

But the twist in this question is, how do we define “good growth”. This term is

very relative. Hence the next question tries to probe the respondents as to

what does good growth mean to them.



• Question 11 tries to identify as to what percentage growth in legal

outsourcing business can be termed as a good one.

What percentage growth can be termed as good?

15%, 14%

20%, 19%

30%, 29%

40%, 38%

The pie – chart says that 38% of the respondents feel that a growth of 40% in

legal outsourcing business can be rated as good.

29% of the respondents say that a 30% growth in this business can be calledas a good rate of growth.

19% of the respondents feel that a 20% growth in this business can be called

as a good pace of growth.

Finally, 14% respondents say that even a 15% growth in the legal outsourcing

business can be called as a good rate of growth.



• In response to question 12, thirty one respondents have said that equity

research outsourcing business would grow at a good pace in the future

years. One respondent said “don’t know”.

would equity research outsourcing grow at a

good pace in the future?

31

0 1

0

5

10

15

20

25

30

35

Yes No Don't know

answer

no.

of respondents

It can be interpreted that excepting a single respondent, others believe that

equity research outsourcing would grow at a good pace in the future years.

One respondent says that “he does not know”. Hence, we can give the benefitof doubt to the rest and conclude that equity research outsourcing is set to

grow at a very good pace in the years to come.

Here again, the same ambiguity arises like in question no.10. How do we

define a good growth? This problem is solved like done in the earlier

questions. The next question requests the respondents to quantify good

growth as per their knowledge and experience in this business.



• Question 13 tries to identify as to what percentage growth in equity

research outsourcing could be termed as a good rate.

what percentage growth can be termed as good?

15%, 9%

20%, 12%

30%, 18%

40%, 24%

60%, 37%

37% of the respondents feel that 60% growth in equity research outsourcing

can be termed as a good rate of growth.

24% of the respondents say that a 40% growth in this business can be calledas good.

18% of the respondents say that a 30% growth in this business can be called

as good.

12% of the respondents say that a 20% growth in this business can be called

as good.

9% of the respondents say that a 15% growth in the equity research

outsourcing can be treated as a good rate of growth.





• Question 20 tries to identify whether legal outsourcing would prove

profitable to the firms in the coming years.

would legal outsourcing prove profitable in theyears to come?

16

6

10

0

5

10

15

20

Yes No Don't know

answer

no. of respondents

16 respondents have said that legal outsourcing would prove profitable to their

firms in the future. The reasons given by them are that their firms are gearing up

to start handling more activities in legal outsourcing.

6 respondents have said that legal outsourcing would not prove profitable to their

firms. They feel that legal outsourcing is not their core competency and that they

would need more time to establish in this business.

10 respondents have said that they do not know whether legal outsourcing would

be lucrative for their firms.



• Question 21 tries to identify whether equity research outsourcing would

prove profitable to the firms in the coming years.

would equity research outsourcing proveprofitable in the years to come?

16

6

10

0

5

10

15

20

Yes No Don't know

answer

no. of respondents

16 respondents have said that equity research outsourcing would prove

profitable to their firms in the future. The reasons given by them are that their

firms are gearing up to start handling more activities in equity researchoutsourcing.

6 respondents have said that equity research outsourcing would not prove

profitable to their firms. They feel that equity research outsourcing is not their

core competency and that they would need more time to establish in this

business.

10 respondents have said that they do not know whether equity research

outsourcing would be lucrative for their firms.



CHAPTER 6CONCLUSION &

RECOMMENDATION



Conclusion

My null hypotheses would be accepted if the growth rate of Legal & Equity

research outsourcing is atleast or more than half the BPO industry growth

rate.

The growth rate of the BPO industry is 48%

Question no.11 & question no.13 of my questionnaire seek from the

respondents as to at what rate would Legal & Equity research outsourcing

would grow in the future.

The average of the response of all my respondents to these questions

reveal that the growth rate of Legal & Equity research outsourcing would

be 28.6%

This rate of growth is greater than half of the industry growth rate

Hence, my null hypotheses is accepted which states that Legal & Equity

research outsourcing is set to grow at a good rate in the future

Recommendation

I strongly recommend that the BPO companies should get into Legal &

Equity research outsourcing business as soon as possible

The main reason being that Legal & Equity research outsourcing is set to

grow at around 30% as predicted by the people from the industry

Also, the market size of Legal outsourcing business in the US alone is of

the order of USD 200 billion. Hence, it makes sense for the big firms to

enter this area of outsourcing



CHAPTER 7

BIBLIOGRAPHY



www.google.com

www.wikipedia.org

www.blonnet.com

www.bpoindia.com

www.theeconomictimes.com

www.nasscom.org



CHAPTER 8

ANNEXURE



Questionnaire





10. Do you feel that legal outsourcing business would grow at a good pace in future?

Yes No Don’t know

11. What percentage growth of this business could be called as a good rate? __________

12. Do you feel that equity research outsourcing business would grow at a good pace in

future?

Yes No Don’t know

13. What percentage growth of this business could be called as a good rate? __________

14. Which is the biggest market for legal outsourcing? ___________________________

15. Which is the biggest market for equity research outsourcing? ___________________

16. What is the volume of business (in USD), in legal outsourcing undertaken by your

company till now? ________________________________________________________

17. What is the volume of business (in USD), in legal outsourcing, being presently

worked on by your company? _______________________________________________

18. What is the volume of business (in USD), in equity research outsourcing undertaken

by your company till now?_______________________________________________________________________

19. What is the volume of business (in USD), in equity research outsourcing, beingpresently worked on by your company?

________________________________________________________________________

20. Do you feel that legal outsourcing would be profitable for your company in the yearsto come? Why?

Yes No

21. Do you feel that equity research outsourcing would be profitable for your company in

the years to come? Why?

Yes No



Dear Sir/Madam,

I am a student of M.P.Birla Institute of Management, Bangalore undertaking a

study on New market opportunities for BPOs in legal & equity research

outsourcing .

I solicit your cooperation for the same by kindly filling up the attached

questionnaire. Your cooperation would be highly appreciated in this regard.

I assure you that all the information would be kept confidential and used for

academic purposes only.

Kind Regards,

Mahesh B Patil



Coding Sheet



Documents

New market opportunities for BPO`s in legal and equity research outsourcing