Level 1- Data entry, digitization, conversion, transcription Five Forces Analysis

Potential Functional Areas -Administration (data entry, digitization, etc.)

The threat of new entrants
 
As this segment, don’t need any specialized domain knowledge to enter into this segment, there is high possibility of entering new players into this segment. Specially most of the south Asian developing countries eyes on this segment as those countries have sufficient human resource to enter into this segment and compete at a relatively low labour cost. Especially destinations which have IT and English literate labours at relatively low cost, could be consider as the countries which have high potential to enter into this segment. Therefore this segment is most vulnerable for the existing players as entry barrier is not high as other levels. 

The bargaining power of suppliers

With the Business Process Outsourcing market growing at a rapid pace, the need has arisen for skilled manpower in Asian region, bargaining power of skilled labour suppliers would increase drastically as rising demand for the skilled labours. Though when comes to this bottom layer, there isn’t necessity of skilled labour force as almost every things belong to basic s clerical services. Further, to employee in this segment, do not require domain knowledge or specialized expertise and there are huge amount of potential employees for this segment, release to national labour force by education system, each and every year; as they haven’t specialized expertise, almost every body, facing unemployment problem those who seek jobs after leaving schools. Since then bargaining power of suppliers would be relatively lower than other segment.  

Since Sri Lankan BPO industry is relatively small when compared to other countries, the bargaining power of international service providers 


The bargaining power of buyers

Since there are plenty of outsourcing destinations, which are cater to this low value segment, switching cost wouldn’t be high as other segments. Due to this reason, bargaining power of buyers, relatively higher than other high value segments. 

The threat of substitutes products and/ or services

Process Automation
The process automation could consider as a key factor in terms of substitutes for the out sourcing low value functions; data entry is one of the typical example for this scenario as process automation could avoid such manual data entry tasks. The scenario is such that, when comes to certain administrative tasks, like calling centers do, its pretty hard to automate as customer requirements fall into wide array of requirements. Therefore, there is moderate risk from substitutes.  

The rivalry among the competitors

The degree of intensity of this segment is relatively higher than other segments as plenty of players work on same niche market. And this implies by the drastic growth of this segment, which took placed within last few years.