LPO Industry : Differentiated Prices for Specialized LPOs

The LPO industry in India, has reached a golden curve, as many of the big name providers have strategically evolved with merger and acquisition activity. Such moves have proved to be a big boon, as growth is now at high rates and inorganic as well. The spurt in growth in the local LPO market scenario has also led to many of the core-IT service providers in the country, like – Wipro, WNS as well as Genpact, to test the waters now.

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At the same time, there is a degree of maturity happening in the industry.

The type of services that are beginning to be outsourced the more ‘subjective’ and ‘specialized’ services such contract drafting as well as commercial analysis. Such services command better prices and are setting expectations for higher legal work scope.

Apart from judgement-based services, such as commercial, contract drafting, and another key volume-based legal work include commoditized capacities. However, such services have average lower price-bandwidth on the legal outsourcing services scale. These services tend to be more of management services, ensuring documents are managed as per the rules established by respective governments.

How are LPO services Priced?

As is common to the outsourcing industry, the LPO services pricing too are determined largely by the ‘leverage’ it derives for the overseas client. Such leverage-based influencers (influences) include – frequency of interacting with clients, and the level of interaction. The degree of intellectual judgement required as well as work processes standardization. The level of analytic services required is also considered, besides looking at the intellectual property rights protection.

At another level, LPO services are priced on par with Contact Center Outsourcing (CCO) for the sub-categories such as document management. However, knowledge management as well as contract drafting command relatively higher prices in the range of 10 to 14%. Transactional LPO services are priced 20% lower than Financial Account Outsourcing (FAO) due to higher technology as well as technology deployment.

Differentiated Prices For Specialized Lpo’s

The current industry trend is for LPOs with highly specialized skill sets, focused in particular sectors, to command the highest prices ranging between 5 and 7%. Their specialized legal services, are a march over non-LPO providers such as BPO, FAO services, since their spectrum of work is more general, by nature.

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