There is tremendous potential in the knowledge process outsourcing space. Only companies that have a strong pedigree, domain expertise, clear focus on the high-end space, a proactive solution orientation and a collaborative mindset will emerge as the winners

The companies have to have a specific growth plan, and a strong sales team, without which, the smaller companies are bound to be under pressure to sell out to larger companies, who intend on expanding their portfolio by providing niche services.

Identifying one of problem areas among the smaller players in the KPO field, Anil Kaul, ceo, Absolutdata says, Most companies in the field are set up with investments from outside parties, who expect returns after a certain amount of time, and if the companies are unable to provide the returns, smaller companies opt for a buy out or they are led to shut down the company.

Marc Vollenweider further explains that there are three types of companies in the outsourcing space;

1. First is the one which are scalable and witness organic growth , however, these companies are in minority.

2. Companies that can sell out after a reaching a certain point in growth.

3. Small companies that will fade away with time or get acquired.

Indian market is still at a nascent stage, with sufficient number of players growing, in the next five years one in ten companies will survive and grow.

With a high profit margin and a rise in demand for specialised services, a series of mergers and acquisitions are expected to be visible in the future.

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The survival in the BPO area will become tougher as scalablity becomes the key issue, thus smaller players in the BPO may be led to sell out or merge.

Earlier, there came this whole outsourcing boom, especially in the voice segment, where anyone and everyone wanted their share of the pie, says Zaveri. The growth was, however, not sustainable, due to which many of the small players have had to shut shops.

With a consolidation in the market expected in the near future, it is yet to be seen how many small standalone players survive.