KARNATAKA STATE OPEN UNIVERSITY

MANASA GANGOTHRI, MYSORE- 570006

A PRO1ECT REPORT
A Study on Impact of ITES Sectors in India
for
Executive MBA
Submitted by
Ravi Parappa Ratnakar
124211FEMBA019
In partial fulfillment of the requirement
For the award of the degree
Under the guidance of
Mr. Kannan
Sharada Vikas Trust
No.450/1/14, 2
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floor. Lakshmi complex, 10
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CERTIFICATE
This is to certify that this project entitled A Study on Impact of ITES
Sectors in India submitted by Ravi Parappa Ratnakar with roll no
124211FEMBA019 on July/2013 to the KARNATAKA STATE OPEN
UNIVERSITY, in partial fulfillment of the requirements for the award of
EXECUTIVE MBA, is a record of bonafied work undertaken by her/him
!"T#$%&T' !(#)$%'
"i*nature + "i*nature +
&ame + ,a-i ,atnakar &ame + .r /annan
$ate + 31 July 2013 $ate +
$esi*nation +
!"T#$0 1%&T,%'
"i*nature +
&ame +
$ate +
"eal of "tudy 1entre+
A Study on Impact of ITES Sectors in India
CONTENT
SL
NO
PARTICULARS PAGE NO
1. OVER VIEW OF BPO 1
2. BPO TERMINOLOGY 11
3. ORGANIZATION STRUCTURE OF BPO INDUSTRY 14
4. RATIO OF MANPOWER IN BPO INDUSTRIES 15
5. COMPETENCIES REQUIRED FOR DIFFERENT
DEPARTMENT
24
6. CAREER PLANNING / GROWTH OF BPO 25
7. PERFORMANCE MANAGEMENT SYSTEM OF BPO 34
8. SUCCESSION PLANNING OF BPO INDUSTRY 46
9. REWARDS AND RECOGNITION IN BPO INDUSTRY 50
10. CHALLENGES FOR HR IN BPO INDUSTRY 64
11. CONCLUSION 74
1. OVER VIEW OF BPO
The concept of outsourcin* started with ,oss 2erot when he founded %lectronic $ata
"ystems in 1342 %$" would tell a prospecti-e client, 50ou are familiar with desi*nin*,
manufacturin* and sellin* furniture, but we6re familiar with mana*in* information
technolo*y 7e can sell you the information technolo*y you need, and you pay us
monthly for the ser-ice with a minimum commitment of two to ten years
829 is the act of transferrin* some of an or*ani:ation6s repeated non;core and core
business processes to an outside pro-ider to achie-e cost reductions while impro-in*
ser-ice quality 8ecause the processes are repeated and a lon*;term contract is used,
outsourcin* *oes far beyond the use of consultants )f done well, 829 results in
increasin* shareholder -alue The main difference between 829 and more traditional )T
outsourcin* is that 829 offers companies a way of achie-in* transformational outcomes
much more quickly )n a typical 829 contract, a ser-ice pro-ider takes o-er a specific
corporate function %ffecti-e 829 encompasses much more than just chan*in* who is
responsible for performin* the process )n 829, the outside pro-ider not only takes on
the responsibility to mana*e the function or business process, but also re;en*ineers the
way the process has been traditionally done
The ne<t *eneration of 8usiness 2rocess 9utsourcin* has emer*ed as a priority for
businesses lookin* to better options in mana*in* their application portfolios The first
wa-e offered low;cost, off;shore de-elopment labor, but today firms are demandin*
new, less risky options for applications that are strate*ic, comple<, or mission;critical,
while still takin* cost into consideration 9utsourcin* has mo-ed from a niche
technolo*y mana*ement tool to a mainstream strate*ic weapon 8usiness 2rocess
9utsourcin* le-era*es process dri-en efficiencies in terms of or*ani:ational e<cellence,
responsi-eness = brandin*, financial efficiency and customer relationship 829 is
emer*in* as a powerful and fle<ible approach that business leaders can use to achie-e a
wide ran*e of tactical and strate*ic aims The most common business process that *ets
outsourced is call centers 1all centers and >elp $esks of many multi national and
fortune ?00 companies are bein* outsourced to low wa*ed, %n*lish speakin* countries
such as 2hilippines and )ndia 1ountries like )ndia with -ast )T human resources are also
attractin* outsourcin* from @merican )T/Technolo*y companies to outsource their )T
>elp $esks .any of these help desks are state of the art with latest >elp $esk software
and help desk hardware with technical sa--y )T *raduates behind them answerin* your
questions
)t can be defined as the transfer of an or*ani:ation6s entire non;core but critical business
process/function to an e<ternal -endor who uses an )T;based ser-ice deli-ery 8y doin*
so, 829 helps an or*ani:ation concentrate on its core competencies, impro-e efficiency,
reduce cost and impro-e shareholders6 -alue Thou*h )T outsourcin* has been happenin*
for so many years, an increased momentum has been witnessed since the late 1330s due
to the rise of )nternet and 1ommunication technolo*ies "e-eral *lobal *iants from
-arious industries ha-e be*un to reali:e the importance of 829 and ha-e started
outsourcin* their non;core business functions This has *i-en rise to many speciali:ed
829 -endors across the *lobe, with )ndia bein* a major hub owin* to its lar*e
computer;literate %n*lish;speakin* population, low billin* rates, strate*ically fa-orable
time :one and hi*h quality The 829 market in )ndia is e<pected to *row e<ponentially
in the comin* years
@lthou*h the term 5business process outsourcin*5 !829' has *ained -isibility in the )T
ser-ices industry only in the past four to fi-e years, the ser-ice offerin* itself has e<isted
for decades Aor e<ample, se-eral of the lar*est ser-ice pro-iders ha-e si*nificant le*acy
re-enue streams that are deri-ed from medical claims processin* contracts )n many
instances, these contracts include the entire back;office function The outsourcin* of
payroll administration, an accepted practice for many years, is another illustration of the
true a*e of the 829 market
This market is now e<periencin* noticeable momentum in terms of wider user
acceptance and the emer*ence of new ser-ice offerin* cate*ories, as well as a
proliferation of pro-iders from which to choose "er-ice pro-iders offer 829 for
literally hundreds of business processes "ome of these ser-ice offerin*s are -ery stableB
some are just emer*in* and are, therefore, lar*ely untested
Domestic Market Of BPO
Business process outsourcing in India
The business process outsourcin* industry in )ndia has *rown by leaps and bounds and
as its si:e increases so does its competiti-e ad-anta*e 1ompared with 1334 when this
)ndustry had started inroads into the #nited "tates with 9utbound Telemarketin*
campai*ns, today the -ehicle for these calls;the internet has become cheaper and more
reliable for the a-era*e )ndian business The business has boomed to the e<tent that
many people are now runnin* 829Cs out of their cyber cafes and houses in &ew $elhi
The sector witnessed considerable acti-ity durin* 200D;0?, includin* a rampin* up of
operations by major )ndian and .&1 players and stepped up hirin* The domestic 829
market, cataly:ed by demand from the telecommunications and 8A") se*ments, matched
the *rowth of 829 e<ports The market e<perienced maturity and consolidation, a result
of numerous mer*ers and acquisitions takin* place within the sector There were o-er
D00 companies operatin* within the )ndian 829 space, includin* capti-e units !of both
.&1s and )ndian companies' and third;party ser-ices pro-iders The )ndian 829
industry remains on a *rowth path, emer*in* as one of the key in-estment markets in the
country (rowth in this sector will *et a further impetus as )ndian 829 companies ha-e
robust security practices and emphasis is laid in de-elopin* trust with clients on this
score 7hile earlier there were -aryin* quality standards on this aspect, today there is
focus on standardi:ation of security, such as data and )2 security
Major BPO locations in India
Cities that are leading BPO-ITeS hubs in India today:
8an*alore
1hennai
>yderabad
.umbai
&1, !(ur*aon, &oida, Aaridabad, (reater &oida'
&ew $elhi
2une
These are Tier ) cities that are leadin* )T cities in )ndia
7ith risin* infrastructure costs in these cities, many 8296s are shiftin* operations to
Tier )) cities like+;@hmedabad, @mritsar, 8hubaneswar, 1handi*arh, (uwahati, )ndore,
Jaipur, /anpur, /ochi, /olkata, .an*alore, .ohali, .ysore, &a*pur and "rina*ar
Tier )) cities offer lower business process o-erhead is compared to Tier ) cities, but may
ha-e a less reliable infrastructure system which may hamper dedicated operations The
(o-ernment of )ndia in partnership with pri-ate infrastructure *iants is committed to
brin*in* all around de-elopment and pro-idin* robust infrastructure all o-er the nation
Business Process Outsourcing (BPO) - Advantage India
The abundant skilled manpower has made )ndia a tar*et destination for multinationals to
back end their operations in )ndia )ndia ranks hi*h in areas such as qualifications,
capabilities, quality of work, lin*uistic capabilities and work ethics, and thus is ahead of
competitors such as 1hina, 2hilippines, )reland, @ustralia, 1anada etc )ndian companies
ha-e unique capabilities and systems to set, measure and monitor quality tar*ets
)n specific 829 cate*ories, )ndian centers ha-e achie-ed hi*her producti-ity le-els;for
e<ample, the number of transactions per hour for back office processin*, than their
7estern counterparts @lso, )ndia is able to offer a 2D<E ser-ices and reduction in
turnaround times by le-era*in* time :one differences )ndia6s unique *eo*raphic
2ositionin* makes this possible .any state *o-ernments in )ndia are offerin* incenti-es
and infrastructure to set up )T enabled ser-ices
@bout 100,000 en*ineers *raduate from )ndia e-ery year .any of these en*ineers are
employed with call centers for troubleshootin* and pro-idin* technical support at
salaries that are dramatically lower compared to the pay scales in the #" The a-era*e
monthly salary in )ndia is FD00;E00 compared to F2,E00;2,G00 in the #"
"i:e and (rowth of 829 in )ndia
Year Size (US$ Bn) Growth Rate
2003 2.8 59
2004 3.9 45.3
2005 5.7 44.4
Strengths Weaknesses
"olid history in software
de-elopment
%n*lish proficiency
(o-ernment "upport
1ost ad-anta*e
"tron* tertiary education
2rocess quality focus
"killed workforce
%<pertise in new technolo*ies
%ntrepreneurship
,easonable technical inno-ations
,e-erse brain drain
%<istin* lon* term relationships
Opportunities
2ositionin* = 8rand mana*ement
)nfrastructure
1ultural differences
"ales = marketin*
He-era*e e<pertise for hi*her;-alue
education
8usiness process e<perience
$istance from #"
Aear/#ncertainty from 2akistan
He*al system
2oor *lobali:ation skills
Threats
1reation of *lobal brands
829 = 1all center offerin*s
%<pansion of e<istin* relationships
1hinese domestic = e<port market
He-era*e relationships in 7est to
access @2@1/.iddle %ast markets
)ndian domestic;market *rowth
)nternal competition for resources
9-er;promise / #nder;deli-er
,e*ional *eopolitical uncertainty
,isin* labor costs
1ompetition from other countries
"ometime blindin* nationalism
(o-ernment blockin* reform/deals
1orruption/piracy/trust
2olitical = reli*ious instability ;war
Global Market of BPO
Global BPO Market by Industry
Information Technology 43
Financial Services 17
Communication (Telecom) 16
Consumer Goods/ Services 15
Manufacturing 9
Global BPO Market by Geography
United States 59
Europe 27
Asia-Pacific (incl. 1apan) 9
Rest of the World 5
Size of Global Outsourcing Market
2000 USD$ 119 Billion
2005 USD$ 234 Billion
2008 (est.) USD$ 310 Billion
Call Center Employee cost
USA US$ 19,000 annually
Australia US$ 17,000 annually
Philippines US$ 9,050 annually
India US$ 7,500 annually
&early E?I of #" and %uropean multinational companies now use outsourcin* or
shared ser-ices to support their financial functions E2I of %uropean multinational
companies ha-e outsourced financial functions o-er the past two years
@dditionally, E1I of %uropean companies and EGI #" companies plan to use these
ser-ices in the ne<t 12;2D months 9-erall, 23I of #" and %uropean companies e<pect
to increase their use of outsourcin* of financial functions, with spendin* e<pected to be
nearly 14I hi*her than current le-els
&orth @merica is e<pected to represent ?E percent of the total 829 market in 2003 ; to
F43 billion ; with *rowth in other re*ions e-entually outpacin* &orth @merica (artner
analysts say that after se-eral years of double;di*it *rowth, delays in contract si*nin*s
and lower ne*otiated rates for lar*e 829 deals ha-e led to moderate *rowth in 2002 and
2003
The 7estern %uropean 829 market is forecast to *row 103 percent in 2003, to F2E
billion, accordin* to (artner )n %urope, outsourcin* of financial ser-ices processes are
widely used, howe-er, other industries are *rowin* in respect for different types of 829
1ustomer interaction for demand;mana*ement 829 is pro-in* popular in the utilities
and telecommunications sectors "upply;mana*ement 829 is *ainin* popularity in local
*o-ernments, and enterprise ser-ices are *rowin* in telecommunications for human
resources, finance and accountin*
"tartin* off slowly, the @sia 2acific 829 market is e<pected to *row EG percent in
2003, to FGE billion, but it is then forecast to ha-e double;di*it *rowth durin* the ne<t
few years .%T@ (roup, )nc found that nearly all @sia 2acific )T or*ani:ations will
outsource at least one mission;critical technolo*y operation by 200?
.c/insey6s research found that @ustralia and &ew Jealand are the most mature
economies in terms of acceptance of 829 ser-ices, followed by "in*apore )n most other
countries there is almost no history of outsourcin* other than product support
CHINA
)n the outsourcin* field, 1hina is the bi**est challen*e in the future and the lar*est threat
to )ndia 7ith the lar*est population and fastest economic *rowth, 1hina has at least two
stren*ths in the *lobal outsourcin* market+ manufacturin* and )T
The main ad-anta*es of 1hina are as follows+
Hower .anpower costs+ The 1hinese workers cost about 1? percent less than
equally qualified )ndians
Japan @d-anta*e+ 1hina is likely to *row throu*h the Japanese outsourcin*
route The ad-anta*es that 1hina has are Japan6s pro<imity to 1hina, similarity of
the lan*ua*es )ndia currently offers almost no 829 ser-ices in Japan
%<tremely low cost real estate and power+ These costs are lower than in )ndia
This can be a -ery attracti-e to the #" companies, which are lookin* for cost
cuttin* due to the downturn
2roacti-e (o-t+ The *o-t is -ery friendly to this sector and has taken the
followin* steps
1 %n*lish teachin* and other skill sets+ 9-er F?D billion was in-ested in
nine uni-ersities in 1hina to promote %n*lish lan*ua*e and other skill
sets
2 )ncreasin* telecom density and 21 penetration+ 1hina scores o-er )ndia in
these aspects and intends to further increase the *ap
He-era*in* on the manufacturin* ima*e+ 7estern manufacturin* companies ha-e
found that outsourcin* their manufacturin* function to 1hina for their companies6
*lobal operation can be profitable and also of *ood quality
The main disad-anta*es of 1hina are as follows+
Hack of a *ood Kuality record in "oftware+ )ndia has a better ima*e as a quality
supplier mostly due to its track record of better quality software than 1hina
How %n*lish speakin* population+ This is the bi**est drawback of 1hina )t has a
-ery small proportion of the population speakin* fluent %n*lish
Hess mature+ The )ndian business processes are much more mature 1hina has
only recently entered into 829 @s such, despite lower billin* rates, total project
costs in 1hina would turn out be hi*her because of the hi*her o-erheads
incurred
PHILIPPINES
)n the 2hilippines the manpower costs are 40 to G0 percent lower as compared to #/ and
#" The a-era*e salary cost is around FE00;G00 per month in the 829 sector The
country has a shorta*e of manpower mainly due to the small population as compared to
)ndia The manpower base for 829 is only 300,000 ,i*ht now the country is *ettin*
business from nearly E0 companies employin* more than 12,000 people with re-enues
of #"F 2?0 million
The main ad-anta*es of 2hilippines are as follows+
Har*e scale technical trainin* pro*ram+ The *o-t has initiated a no of policies
by which the skills can be pro-ided to a lar*er population
)mpro-ed telecom and office infrastructure+ 2hilippines scores o-er )ndia in this
respect
3rd lar*est %n*lish;speakin* nation in the world+ This is a -ery important
ad-anta*e
7ell de-eloped )T skill set+ )t is considered 2nd only to )ndia due to performance
in software
1osts of technolo*y workers+ This is!which represents the bi**est recurrin* costs
for, say, a 828 site' is only around 14I to 2?I in the 2hilippines to that of
comparable workers from the #nited "tates
Aormer @merican colony+ @s a former @merican colony, @merican culture and
lan*ua*e is widely emulated here These cultural and communications skills
could pro-e to be so appealin* to @merican firms that they would outwei*h
sli*htly hi*her labor costs in the 2hilippines
The main disad-anta*es of 2hilippines are as follows+
How *raduate turnout+ 2hilippines has a low *raduate turnout !only D00,000 per
annum' This compares -ery unfa-orably with )ndia
&ot ha-in* a record of hi*h quality+ )ndia has consistently deli-ered -ery hi*h
quality in "oftware and has built a -ery hi*h reputation in it
2olitical instability+ The country has frequent elections which makes it difficult
for companies to outsource as there is lack of uniformity of policies with chan*es
in the (o-t
&o disaster reco-ery facilities or multi;location facilities+ @fter the 7T1
bombin* terrorism has become a -ery important issue for the #" companies in
particular and they want that the 829 pro-iders should ha-e multi location
facilities which can be used in case of any terrorist attack
)ssue of scalin* up+ 2hilippines face the important issues of scalin* up )ssues
like scalin* up ha-e stunted the *rowth of 829 acti-ities bein* outsourced to
2hilippines The lar*est call 1entre in 2hilippines of @9H has only G00 people
The si:e of the 2hilippines 829 industry is only F100 million, whereas )ndia6s 829
industry is presently at F1? billion !2001;02'
IRELAND
)t was one of the front runners in the 829 and started much earlier than )ndia Thus it
has built *ood brand equity in #" )t has a -ery conduci-e re*ulatory framework and is
known for e<cellent quality standards The country that has strate*ically pursued
de-elopin* outsourcin* ser-ices market and is plannin* to in-est hea-ily in telecom
infrastructure !F ? billion o-er 10 years'8ut it suffers from a -ery bi* disad-anta*e of a
lack of a lar*e human resource pool )t has nearly ?00 companies employin* more than
D0,000 people @lso it compares -ery poorly with )ndia and 1hina in terms of .anpower
costs )reland is actually the bi**est e<porter of software ser-ices in the world today 8ut
there is currently a shorta*e of pro*rammers in )reland and companies are forced to
outsource work to )ndia The other countries, which ha-e a share in the 829 sector, are
*i-en below These countries are not serious competitors to )ndia mostly due to the small
population base
AUSTRALIA
)t has a mature 829 industry with D000 call centers employin* 22?,000 people with #"F
?E billion re-enue )t has the ad-anta*e of lar*e %n*lish speakin* population with a
fa-orable time :one
2. BPO TERMINOLOGY
Business Process Outsourcing
8usiness process outsourcin* means e<aminin* the processes that compose the business
and its functional units, and then workin* with focused ser-ice pro-iders to both re;
en*ineer and outsource these at the same time 829 in-ol-es the full transfer of
responsibility for functions such as transaction processin*, policy ser-icin*, claims
mana*ement, >,, finance, and compliance to the outsourcin* company The outsourcin*
pro-ider then administers these functions on their own systems to a*reed ser-ice
standards and at a *uaranteed cost "ome of the 829 contracts call for performance;
based payouts, tyin* -endor payments to business performance or o-erall cost sa-in*s
Business Application Outsourcing
1ompany @ !-endor' rents applications to 1ompany 8 !user' )ncreasin*ly corporations
are rentin* applications like enterprise resource plannin*, customer relationship
mana*ement, messa*in* and collaboration, and e;business The outsourcer pro-ides the
mission;critical enterprise application hostin* and mana*ement The *oal is to relie-e
the corporation from day;to;day mana*ement and lower the total cost of ownership
!T19' The outsourcer hosts the software solution ensurin* a preset le-el of
performance and reliability This is also termed application ser-ice pro-ider !@"2'
ser-ice
Business Process Off shoring
8usiness process off shorin* is the transfer of business tasks !medical transcription' or
business processes !call centers' to a low;cost country like )ndia or the 2hilippines The
interaction is conducted o-er telecom networks and the )nternet 9ff shorin* typically
include tasks like transaction or accounts processin*, credit card processin*, call centers,
translation, and transcription .ost of this work can be sent without the need for in;
person interaction The off shorin* of support functions is still relati-ely new The off
shorin* wa-e be*an with )T/software ser-ices in the 13G0s and accelerated in the 1330s
with the 02/ hysteria 7ith the *lobal economic slowdown, off shorin* has -aulted to
the forefront as an effecti-e cost;cuttin* technique that takes ad-anta*e of labor price
differentials and fa-orable skill/performance ratios
Business Transformation Outsourcing
8usiness transformation outsourcin* !8T9' is a natural e<tension of the more tactical
829 model and in-ol-es the transfer of responsibility for all back;office functions, as
well as a comprehensi-e business chan*e mana*ement process to an e<ternal -endor
The objecti-e is to ma<imi:e the lon*;term benefits of the 829 operations, resultin* in a
comprehensi-e business transformation !or o-erhaul' Transformation outsourcin* is not
a tactical issue but a forward;lookin* strate*ic tool for chan*e The lo*ic+ bi* *ains in
performance only come about throu*h business transformation
Outsourcing
.ulti sourcin* is the mana*ement and distribution of different business processes amon*
multiple 829 -endors Aor instance, >, processes are outsourced to one best;of;breed
-endor Ho*istics are outsourced to another )T de-elopment and maintenance to another
-endor ,isk miti*ation is a primary dri-er behind multi sourcin* 9ne aspect of
multisourcin* is to use multiple suppliers to eliminate lock;in and achie-e so;called best;
of;breed ad-anta*es This is especially true for #" and %uropean firms, which often
like to spread offshore de-elopment to a -ariety of -endors and locations .ultisourcin*
also co-ers the different deli-ery models These include+
9n shorin* ; outsourcin* to another company within the #nited "tates
&ear shorin* ; outsourcin* to .e<ico or 1anada
9ff shorin* ; outsourcin* to another country such as )reland or )ndia
The fi*ure below captures the differences
Shared Services (or in sourcing)
"hared ser-ices, a form of 5internal outsourcin*,5 enables corporations to achie-e
economies of scale by creatin* a separate internal entity within the company to perform
specific ser-ices, such as payroll, accounts payable, tra-el and e<pense processin* @
typical shared ser-ices initiati-e takes ad-anta*e of enterprise applications and other
technolo*ical de-elopments, enablin* the company to achie-e further impro-ements to
quality in processes, such as finance, accountin*, procurement, )T, and human resources
@t the core of shared ser-ices is the idea that new technolo*ies offer businesses the
opportunity to 1' make better use of scarce skills, 2' pro-ide information and ser-ices
more efficiently, and 3' reduce the cost of administration
The bottom line: The modern firm sits at the centre of a network of suppliers (one are
the bi* in;house departments and in their place are comple< chains of e<ternal partners
that are meant to deli-er better ser-ices for less cost @ll these si*nify a *reater reliance
on partners for non;core acti-ities and resources The ad-ent of the )nternet and the
increasin* sophistication of enterprise applications open up new opportunities for
companies to share a wider ran*e of ser-ices across a *reater number of business units,
departments, or -endors
3. ORGANIZATION STRUCTURE OF BPO INDUSTRY
The typical or*ani:ation structure of a 829 ser-ice pro-ider is a pyramidal one The
fi*ure below depicts a simplified or*ani:ation hierarchy, the roles and responsibilities at
each le-el and the competencies required at each le-el
Top
Management
Manager
Team Leader / Quality Analysts
Agents
4. RATIO OF MANPOWER RATIO IN BPO SECTOR
FOR EXAMPLE HCL TECHNOLOGY
>1H Technolo*ies Htd e<pects the 829 and )T infrastructure mana*ement
ser-ices to be the major *rowth dri-er, in line with the )T outsourcin* industry
trend 829 space is still in an in-estment period )n the core product en*ineerin*
area, the company e<pects buyin* interest to rebound in near future L7e ha-e
stron* presence in 829 and )T infrastructure mana*ement ser-ices and lead in
both the spaces, but due to the sensiti-ity of our clients we ha-e kept its
successes in these areas a low;key affair,L said "hi- &adar, chairman and 1%9,
>1H Technolo*ies Htd, at the conference call
BPO
829 business recorded a four per cent sequential *rowth in June 2003 quarter
with or*anic re-enues re*isterin* a si*nificant D4 per cent *rowth, while
contribution to o-erall re-enues stands at G4 per cent .anpower in the se*ment
increased by 43? to 1,D44 permanent employees on the companyCs rolls and
added se-en clients durin* the June 2003 quarter
Infrastructure
)nfrastructure ser-ices business mana*ed by >1H 1omment has started yieldin*
results from *lobal markets, re*isterin* a two per cent sequential *rowth in
re-enues and contribution to o-erall re-enues stands at 3D per cent @ total of GD
new employees were added durin* the June 2003 quarter, takin* total headcount
to 41D
>1H Technolo*y !>1H Tech' has earned a net income of F ?2 million durin* 1333;
2000 which is an increase of 134 per cent
30GE software en*ineers were added last year which meant a *rowth of ?1 per cent
1ustomer si:e increased to 243
They ha-e offices in 1? countries worldwide
Their customers include &TT $ata, M$9, Toshiba and )ntelsat
THE KEY OPERATING STRATEGIES OF HCL TECHNOLOGIES ARE AS
FOLLOWS:
Emphasis on a strong management team :
1 The creation of a *lobal ad-isory board and technolo*y ad-isory board
should help in impro-in* their *eo*raphical and technolo*ical strate*yB
this would help them in the acquisition of emer*in* technolo*ies
2 The or*ani:ational structure fosters an entrepreneurial spirit
3 )ndependent @udit, 1ompensation and ,elated 2arty 1ommittees ha-e
been formed @udit 1ommittee, headed by ambassador, ,ichard 8urt, has
formulated *uidelines for insider tradin* and best practices
1ompensation committee, headed by ,obin @brams, has appro-ed of an
%mployee "tock 9ption plan to co-er 31 per cent of the employees
D They ha-e a distin*uished )nternational 8oard of $irectors This
international e<perience should be useful while makin* acquisitions
Emphasis on front run emerging technologies :
1 The in-estment in ,esearch and de-elopment !, = $' should pro-ide
accelerated *rowth
2 3 per cent of their offshore manpower is dedicated to , = $
3 The company intends to add -alue to the customer6s business rather than
just maintain systems Thus there is *reater potential for -alue based
pricin*
D Their technolo*y ser-ices continue to mo-e up the -alue;chain
? The company has placed an emphasis on )nternet technolo*ies
de-elopment with minimum e<posure to dot coms
Non-linear growth model :
1 This implies that the company seeks to push re-enue/income further than
the hours put in and supplement its or*anic *rowth throu*h di-erse
a-enues
2 Joint -entures and strate*ic partnerships+ The company6s partnership with
2erot "ystems !?0+?0' has been a hi*hly successful one >1H 2erot has a
man power of 13E3 employees and has emer*ed as a leadin* outsourcin*
and systems inte*ration company, with stren*ths in bankin*, ener*y,
healthcare, insurance, manufacturin* and telecommunications >1H 2erot
added F D1 million to the company6s net profit durin* K1 of A02001 The
company has also completed the acquisition and inte*ration of )ntelicent
)nc successfully
3 %quity in-estments for -alue acquisition+ >1H Tech is in-ol-ed in
de-elopin* cuttin* ed*e technolo*ies alon* with some smaller
companies, and may *o in for a -alue acquisition to enhance shareholder
-alue soon
D .er*ers and acquisitions+ Thou*h the company has been acti-ely
e-aluatin* .=@ opportunities in the #" and %urope, yet it has not
finali:ed a deal as yet They intend to acquire companies with stron*
technolo*y, network ser-ices orientation and a quality client base .r
"hi- &adar stated that the companies that they had tar*eted were *oin*
throu*h a low phase, due to which their -aluations were not correct "o
the company could not *o forward with their acquisition plans
? The company has in-ested F13 million in technolo*y funds and other
related areas
4 The non;linear model can lead to better scalability throu*h the creation of
5soft cores5 such as the 8luetooth soft core, .odem software, 121
"oftware and 8luetooth "tack
Emphasis on quality revenue mix through the following :
1 )ncreased contribution from hi*h -alue and hi*h mar*in ser-ices;
howe-er it must be noted here that re-enue *rowth this time is lower than
the last time
2 E2 per cent of the company6s re-enue6s come from technolo*y
de-elopment ser-ices, software product en*ineerin* and networkin*
ser-ices
3 The company has a de;risked business model
D The top ?, top 10, top 1? customers contribute 23 per cent, 3? per cent
and D4 per cent of re-enues respecti-ely
? The repeat business of the company from e<istin* clients is of the order
of 43 per cent
4 The total client base is of the order of 2G4 as of "eptember 30, 2000
E The company6s offshore re-enues are *rowin* at a 1@(, of E1 per cent
for 1333;00
Emphasis on earnings led growth :
1 The company has been focusin* on mo-in* up the -alue chain, due to
which the bill rate has increased both for offshore centric !11D per cent'
and onsite ser-ices !103 per cent' o-er K1 last year
2 @-era*e re-enue per employee durin* K1 2001 has also increased to ,s
32 million per annum and *ross profit per employee has also *one up to
,s 1? million
3 .ar*ins of the company ha-e also impro-ed
Employee Development and Contribution :
1 >uman resources are the backbone of any information technolo*y
company and the lon*;term success of >1H Tech also depends crucially
on their human resources
2 Their total manpower stands at D13? !inclusi-e of D3D people taken in
durin* the quarter'
3 G3I of their total manpower is established in )ndia
D The company6s attrition rate is 114 per cent while the a-era*e trainin*
duration per employee stood at 13 days annuali:ed for K1 2001
)T;%nabled "er-ices !)T%"' or 829 !8usiness 2rocess 9utsourcin*' as it is better
known holds tremendous potential for )ndia Thou*h )T%" in )ndia has become almost
synonymous with call centers in public perception, it encompasses much more The term
)T%" can be defined as outsourcin* of such processes that can be enabled with
information technolo*y and co-ers areas as di-erse as finance, >, !human resource',
administration, healthcare, telecommunication, manufacturin* etc These ser-ices are
usually deli-ered to remote areas throu*h the telecom and )nternet medium and imply
transfer of ownership and mana*ement of the process from the customer to the ser-ice
pro-ider
The concept of )T%" started with the dri-e of the *lobal companies to become cost
efficient )n an attempt to stay competiti-e, corporate restructured their business in such
a way that they could concentrate on their competencies and outsource the processes that
were non;core to their business )ndia with its lar*e %n*lish speakin* *raduate workforce
and low wa*e le-els emer*ed as an attracti-e destination for )T%" !%<hibit )'
%<hibit )
Comparison of Operating
Costs
US India (US $ cost per full time
employee)
India as of US costs
2ersonnel D232E 41E3 1DD
(eneral = @dministrati-e
%<pense
G?E1 1000 11E
Telecom 1?00 232G 1??2
2roperty ,entals 2400 GDE 324
$epreciation 3000 1?00 ?00
Total %<penses ?G?3G 11G?D 202
Every year, India produces 2.1 mn graduates and 0.3mn post-graduates (including non-
engineering colleges). As these graduates do not have enough o! options availa!le, a large
pool o" graduate #or$"orce !ecomes availa!le to the I%E& industry. %here is not only
a!undant #or$"orce in India, they are also availa!le at very cheap rates. %he di""erence in
#ages !et#een the '& or '( and India is more than )0-*0+ "or o"" shora!le processes. Even
a"ter ta$ing into account the interaction cost o" 10-20+ !ecause o" locational di""erences, the
customers can still have net savings o" ,0--0+ !y outsourcing to India.
Impressive growth Potential
%he I%E& industry, #hich contri!utes 2,+ to the total I% &o"t#are and &ervice e.ports "rom
India, #itnessed a gro#th o" ,3.3+ to reach '&/ 2.3 !n in 0103. According to 2asscom, the
industry is e.pected to gro# !y around ,)+ to touch '&/ 3.- !n. in the current "iscal. 3oing
!y the long-term proection o" 2asscom, the industry is estimated to touch a si4e o" '&/ 21-
25 !n !y 200*. %his #ould imply an estimated compound annual gro#th rate o" ,*+, ma$ing
it one o" the "astest gro#ing sectors in India (E.hi!it 2).
E.hi!it 2
Growth of ITES Industry
US$ mn
2000 ?4?
2001 330
2002 1,D3?
2003 2,300
200D ?,200
Third-party service providers gaining prominence
9ne of the main proponents of outsourcin* is (eneral %lectric !(%', which started
operations in )ndia in 133E, has the lar*est )T%" operation in )ndia with more than
12,000 employees The )T%" story started in )ndia with the capti-e centers of .&1s like
(%, >"81, @merican %<press, $ell 1omputers etc settin* up base here This was
followed by the emer*ence of -enture funded third;party )ndian )T%" firms in
descendin* order of re-enues !based on A003 re-enues reported in accordance with #"
(enerally @ccepted @ccountin* 2rinciples' which are 7ipro "pectra mind, 7&"
(roup, $aksh ser-ices, %<;"er-ice and >1H Technolo*ies The industry also has the
presence of *lobal 829 players like 1on-er*es, %", 1omputer "ciences 1orporation
!1"1', @ccenture and %<ult )nc %stablished software ser-ices companies like )nfosys,
7ipro, 2atni, "atyam, >1H, 1o*ni:ant and "yntel ha-e also started -enturin* into the
)T%" arena These companies enjoy a number of syner*ies between their )T%"
operations and )T ser-ice offerin*s They are able to le-era*e their e<istin* customer
relationships to *et contracts and are also in a position to tar*et a lar*er share of the
customer6s wallet by cross;sellin* different ser-ices The customers also prefer -endors
who can pro-ide end;to;end ser-ices .oreo-er, the cash;rich balance sheets of these
companies are a bi* ad-anta*e as )T%" is a capital;intensi-e industry
Customer care: Fastest growing segment
6ustomer care also $no#n as call center includes data!ase mar$eting, customer analytics,
telesales7telemar$eting, in!ound call center, #e! sales and mar$eting, sales and mar$eting,
sales and mar$eting administration. %he hype surrounding the industry can !e e.plained !y
the "act that this segment is not only the largest revenue earner ('&/ *10 mn in 0103). 8ut
is also the "astest gro#ing segment (103+ in 0103) in the industry (E.hi!it 3). It also has to
its credit the status o" !eing one o" the largest employment generators. %he segment
employed -,000 people in 0103 a stupendous gro#th o" 11)+ compared to the previous
year.
%<hibit 3
ITES: Market Segmentation
Revenue (US$ mn) Employment
FY03 Growth` () FY03 Growth` ()
1ustomer 1are G10 102? 4?,000 114E
Ainance ?10 E00 2D,000 400
>, D? ?00 2,100 D00
2ayment "er-ices 210 303 11,000 ?E1
@dministration 310 4E4 2?,000 EG4
1ontent de-elopment D4? 33 DD,000 12G
9 3ro#th over 0102 &ource: 2asscom
0inancial service is the second highest revenue earner "or the industry. %he segment includes
!illing compliance, ris$ management, "inancial reporting and "inancial analysis. %his segment
earned revenue o" '&/ ,10 mn in 0103 ()0+ y-o-y increase) and it employed 25000 people
in 0103. &ome o" the 8;< players active in the !an$ing, "inancial services and insurance
(80&I) are I6I6I <ne source, E. &ervice and =ipro &pectra mind.
6ontent development, #hich includes areas li$e engineering, design animation, net#or$
consultancy and management, !iotech research, is another high revenue earner in the I%E&
industry. %he revenue o" this segment in 0103 #as '&/ 5-, mn. >o#ever,#ith 55,000
employees, this segment is the second largest employment generator in the industry. &ome
o" the other emerging segments in the I%E& industry are >?, payment services,
administration, healthcare, retail, telecom and hospitality.
Challenges facing the industry
Mushrooming of small players
@ttracti-e *rowth rate of the 829 industry has resulted in many reckless start;ups
"e-eral companies from unrelated sectors without the required e<pertise entered the
industry lured by the healthy potential of the industry These small companies are now
findin* it difficult to sur-i-e in this capital;intensi-e industry )n a dire strait, some of
the players are takin* hu*e cuts in their billin* rates, which in turn threaten to de;
stabilise the entire industry by reducin* mar*ins to unsustainable le-els They also
portray a ne*ati-e picture of the industry as a whole because of their inability to deli-er
on time
Margins under pressure
7ith increasin* competition and subsequent price dips, the mar*ins of )T%" companies
ha-e come under tremendous pressure .oreo-er, most of the players in the industry are
workin* in low mar*in areas .ore than 40I of the 829 business comin* to )ndia is
-oice related 8arrin* transcription, -oice has the lowest mar*ins amon* 829 business
7ith the 829 business increasin*ly *ettin* commoditised, mo-in* up the -alue chain is
a sensible option before the industry Mendors can mo-e up the -alue chain -ertically
Aor e<ample, for a credit card customer, the low end processes would include ser-ices
such as data entry and processin* of applications, but the hi*her -alue jobs would
include processes such as credit e-aluation and fraud detection Mendors can also mo-e
hori:ontally, that is e<pand ser-ices portfolio by mo-in* into sophisticated areas such as
#" (@@2 accountin*, certain en*ineerin* ser-ices, consultin* etc
HR Issues
The )T%" industry currently employs more than 1E1,000 professionals compared to a
2?,000 in 1333 >owe-er, )ndia is runnin* out of the supply of *ood quality mana*erial
talent There ha-e been recent cases of mid;si:ed companies losin* 829 orders for not
bein* able to demonstrate a competent team that can mana*e a lar*e workforce >i*h
le-el of attrition further complicates the problem @t least 40,000 of the 1E1,000
workforce chan*e jobs e-ery year The supply of skilled manpower to the industry needs
to e<pand at a fast rate to keep pace with the rapid *rowth of the industry )n order to
create a bi* pool of qualified personnel, there is a need to encoura*e pri-ate institutions
to pro-ide trainin* to people interested in joinin* this industry
Infrastructure Bottleneck
%he state o" India@s In"rastructure is also a cause o" concern "or the I%E& Industry. %he
industry is su""ering "rom long lead-time in commissioning o" telecom services and po#er
supply pro!lems. %he country also needs to improve its roads and airports to "acilitate
mar$eting o" India as an I%E& destination.
In the last couple o" years, the In"rastructure condition in the country has sho#n
improvement. Aeregulation o" the telecom sector has resulted in the addition o" signi"icant
!and#idth as #ell as a decline in telecom costs. &everal high-Buality technology par$s such
as >itec city, >ydera!ad %ata-&ingapore 6onsortium, 8angalore and %idel ;ar$. 6hennai have
also !een esta!lished in the Industry.
Apart "rom the challenges discussed a!ove, i" the unemployment rate in the '&7 other
customer countries soars "urther, it could lead to increased opposition to outsourcing. %his
could !ecome a threat "or the Indian 8;< Industry.
5. COMPETENCIES REQUIRED FOR DIFFERENT
DEPARTMENT

"trate*ic 2lannin*
>, mana*ement
/ey @ccount .ana*ement
Ainancial .ana*ement
8usiness $e-elopment
@ccount >andlin*
2rocess .i*ration
Team mana*ement
.entorin* and coachin*
2rocess )mpro-ement
Kuality @ssurance
,eportin*
,osterin* and schedulin*
"upportin* a*ents as the ".%
2rocessin* Transactions
%nd 1ustomer )nteraction
8usiness strate*y
>, 2lannin*
Ainancial .ana*ement skills
Headership and .oti-ation
2roject .ana*ement
.etrics and Kuality mana*ement
2rocess impro-ement tools
Technolo*y .ana*ement
9perations .ana*ement
Aorecastin*, "taffin* and
"chedulin*
.entorin* and 1oachin* skills
2eople .ana*ement skills
.)" and reportin* tools
)ndustry knowled*e
2roduct /nowled*e
2rocess /nowled*e
Competencies Responsibilities
6. CAREER PLANNING / GROWTH OF BPO
829 is becomin* part of the new model for mana*in* international *rowth The benefits
of this model are clear+ .ana*ement can focus more time and attention on buildin* core
business, without the distraction of back;office operations and administrati-e issues
@lso, mana*ement can a-oid ha-in* to in-est in office facilities and computer systems,
thereby freein* up in-estment capital that can be used to better ad-anta*e elsewhere
@nother benefit is that local outsourcin* firms can pro-ide -aluable in;country
e<perience and really help new entrants *et thin*s done more efficiently
8usiness process outsourcin* !829' is a broad term referrin* to outsourcin* in all fields
@ 829 differentiates itself by either puttin* in new technolo*y or applyin* e<istin*
technolo*y in a new way to impro-e a process
8usiness 2rocess 9utsourcin* !829' is the dele*ation of one or more )T;intensi-e
business processes to an e<ternal pro-ider that in turn owns administers and mana*es the
selected process based on defined and measurable performance criteria 8usiness
2rocess 9utsourcin* !829' is one of the fastest *rowin* se*ments of the )nformation
Technolo*y %nabled "er-ices !)T%"' industry
Few of the motivation factors as to why BPO is gaining ground are:
; Aactor 1ost @d-anta*e
; %conomy of "cale
; 8usiness ,isk .iti*ation
; "uperior 1ompetency
; #tili:ation )mpro-ement
(enerally outsourcin* can be defined as ; @n or*ani:ation enterin* into a contract with
another or*ani:ation to operate and mana*e one or more of its business processes
Different Types of Services Being Offered By BPO's
Customer Support Services
1ustomer ser-ice offerin*s create a -irtual customer ser-ice center to mana*e customer
concerns and queries throu*h multiple channels includin* -oice, e;mail and chat on a
2D/E and 34? days basis
"er-ice %<ample+ 1ustomers callin* to check on their order status, customers callin* to
check for information on products and ser-ices, customers callin* to -erify their account
status, customers callin* to check their reser-ation status etc
Technical Support Services
Technical support offerin*s include round;the;clock technical support and problem
resolution for 9%. customers and computer hardware, software, peripherals and
)nternet infrastructure manufacturin* companies These include installation and product
support, up = runnin* support, troubleshootin* and #sa*e support
"er-ice %<ample+ 1ustomers callin* to resol-e a problem with their home 21, customers
callin* to understand how to dial up to their )"2, customers callin* with a problem with
their software or hardware
Telemarketing Services
Telesales and telemarketin* outsourcin* ser-ices tar*et interaction with potential
customers for 6prospectin*6 like either for *eneratin* interest in products and ser-ices, or
to up;sell / promote and cross sell to an e<istin* customer base or to complete the sales
process online
"er-ice %<ample+ 9utbound callin* to sell wireless ser-ices for a telecom pro-ider,
outbound callin* to retail households to sell leisure holidays, outbound callin* to
e<istin* customers to sell a new rate card for a mobile ser-ice pro-ider or outbound
callin* to sell credit or debit cards etc
Employee IT Help-desk Services
%mployee )T help;desk ser-ices pro-ide technical problem resolution and support for
corporate employees
"er-ice %<ample+ of this ser-ice include le-el 1 and 2 multi;channel support across a
wide ran*e of shrink wrapped and H98 applications, system problem resolutions related
to desktop, notebooks, 9", connecti-ity etc, office producti-ity tools support includin*
browsers and mail, new ser-ice requests, )T operational issues, product usa*e queries,
routin* specific requests to desi*nated contacts and remote dia*nostics etc
Insurance Processing
)nsurance processin* ser-ices pro-ide speciali:ed solutions to the insurance sector and
support critical business processes applicable to the industry ri*ht from new business
acquisition to policy maintenance to claims processin*
New Business / Promotion:
)nbound / outbound sales, )nitial "etup, 1ase .ana*ement, #nderwritin*, ,isk
assessment, 2olicy issuance etc
Policy Maintenance / Management:
,ecord 1han*es like &ame, 8eneficiary, &ominee, @ddressB 1ollateral -erification,
"urrender @udits @ccounts ,ecei-able, @ccountin*, 1laim 9-erpayment, 1ustomer care
ser-ice -ia -oice/email etc
Data Entry Services / Data Processing Services Service Example:
$ata entry from 2aper/8ooks with hi*hest accuracy and fast turn around time !T@T'
$ata entry from )ma*e files in any format
8usiness Transaction $ata entry like sales / purchase / payroll
$ata entry of %;8ooks / %lectronic 8ooks
$ata %ntry+ 0ellow 2a*es / 7hite 2a*es /eyin*
$ata %ntry and compilation from 7eb site
$ata 1apture / 1ollection
8usiness 1ard $ata %ntry into any Aormat
$ata %ntry from hardcopy/2rinted .aterial into te<t or required format
$ata %ntry into "oftware 2ro*ram and application
,eceipt and 8ill $ata %ntry
1atalo* $ata %ntry
$ata %ntry for .ailin* Hist/.ailin* Habel
.anu scriptin* typin* in to word
Taped Transcription in to word
1opy, 2aste, %ditin*, "ortin*, )nde<in* $ata into required format etc
$ata 1on-ersion "er-ices "er-ice %<ample+
1on-ersion of data across -arious databases on different platforms
$ata 1on-ersion -ia )nput / 9utput for -arious media
$ata 1on-ersion for databases, word processors, spreadsheets, and many other standard
and custom;made software packa*es as per requirement
1on-ersion from 2a*e maker to 2$A format
1on-ersion from .s;7ord to >T.H format
1on-ersion from Te<t to 7ord 2erfect
1on-ersion from Te<t to 7ord to >T.H and @crobat
1on-ert ,aw $ata into required ." 9ffice formats
Te<t to 2$A and 2$A to 7ord / Te<t / $oc
$ata 1ompilation in 2$A from "e-eral "ources
%;8ook 1on-ersion etc
Scanning, OCR with Editing & Indexing:
>i*h speed )ma*e;"cannin* and $ata capture ser-ices
>i*h speed lar*e -olume scannin*
91, $ata Arom "canned pa*e / ima*e
"can = 91, paper 8ook in to 1$
@$98% 2$A 1on-ersion "er-ices
1on-ersion from paper or e;file to -arious formats
Book Keeping and Accounting:
(eneral Hed*er
@ccounts ,ecei-ables and @ccounts 2ayable
Ainancial "tatements
8ank ,econciliation
@ssets / %quipment Hed*ers etc
Form Processing Services:
)nsurance claim form
.edical Aorm / .edical billin*
9nline Aorm 2rocessin*
2ayroll 2rocessin* etc
Internet / Online / Web Research
)nternet "earch, 2roduct ,esearch, .arket ,esearch, "ur-ey, @nalysis 7eb and
.ailin* list research etc
Key To success
The key to success in rampin* up talent in a 829 en-ironment is a rapid trainin*
module The trainin* component has to be seen as an important sub;process, requirin*
constant re;en*ineerin* 8usiness 2rocess 9utsourcin*+ The Top ,ankers 7&" has
emer*ed as the top 829 in )ndia, pushin* 7ipro "pectra mind to the second position,
accordin* to a sur-ey done by &@""19. The basis of rankin* is the re-enues
*enerated by the 829 companies in 2003;0D, as per #" (@@2 @ list of top fifteen 829
companies in )ndia is *i-en below
7&" (roup
7ipro "pectra mind
$aksh e;"er-ices
1on-er*es
>1H Technolo*ies
Jenta
)1)1) 9ne source
.phasi"
%NH
Tracmail
(TH Htd
-1ustomer
>T.T
2D/E 1ustomer
"utherland Technolo*ies
The parameters for the survey was: %mployee "i:e !9peration le-el e<ecuti-es',
2ercenta*e of last salary hike, 1ost to company, 9-erall "atisfaction "core, 1omposite
"atisfaction, 1ompany 1ulture, Job 1ontent / (rowth, Trainin*, "alary and
1ompensation, @ppraisal "ystem, 2eople, 2referred 1ompany+ !2ercenta*e of
respondents of a company who named their own company as the preferred one', $ream
1ompany+ !2ercenta*e of respondents in the total sample who preferred a particular
company'
%mployee 8enefits 2ro-ided 8y .ajority 9f the 829 1ompanies 2ro-ident Aund+ @s
per the statutory *uidelines, the employee is required to contribute a percenta*e of his
basic salary and $@ to a common fund The employer for this fund contributes as well
The employee can use the amount deposited in this fund for -arious personal purposes
such as purchase of a new house, marria*e etc
Gratuity: (ratuity is one of the retrial benefits *i-en to the employee in which the
employer e-ery year contributes a particular amount The fund created can be used by
the employee for the purpose of lon*;term in-estment in -arious thin*s such as a house
etc
Group Medical claim Insurance Scheme: This insurance scheme is to pro-ide
adequate insurance co-era*e of employees for e<penses related to hospitali:ation due to
illness, disease or injury or pre*nancy in case of female employees or spouse of male
employees @ll employees and their dependent family members are eli*ible $ependent
family members include spouse, non;earnin* parents and children abo-e three months
Personal Accident Insurance Scheme+ This scheme is to pro-ide adequate insurance
co-era*e for >ospitali:ation e<penses arisin* out of injuries sustained in an accident
Subsidized Food and Transportation+ The or*ani:ations pro-ide transportation facility
to all the employees from home till office at subsidi:ed rates The lunch pro-ided is also
subsidi:ed
Company Leased Accommodation: "ome of the companies pro-ides shared
accommodation for all the out station employees, in fact some of the 829 companies
also undertakes to pay electricity/water bills as well as the "ociety char*es for the shared
accommodation The purpose is to pro-ide to the employees to lead a more comfortable
work life balance
Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities include
pool tables, chess tables and coffee bars 1ompanies also ha-e well equipped *yms,
personal trainers and showers at facilities
Corporate Credit Card: The main purpose of the corporate credit card is enable the
timely and efficient payment of official e<penses which the employees undertake for
purposes such as tra-el related e<penses like >otel bills, @ir tickets etc
Cellular Phone / Laptop: 1ellular phone and / or Haptop is pro-ided to the employees
on the basis of business need The employee is responsible for the maintenance and
safe*uardin* of the asset
Personal Health Care (Regular medical check-ups): "ome of the 8296" pro-ides the
facility for e<tensi-e health check;up Aor employees with abo-e D0 years of a*e, the
medical check;up can be done once a year
Loans: .any 829 companies pro-ide loan facility on three different occasions+
%mployees are pro-ided with financial assistance in case of a medical emer*ency
%mployees are also pro-ided with financial assistance at the time of their weddin* @nd,
The new recruits are pro-ided with interest free loans to assist them in their initial
settlement at the work location
Educational Benefits: .any 829 companies ha-e this policy to de-elop the personality
and knowled*e le-el of their employees and hence reimburses the e<penses incurred
towards tuition fees, e<amination fees, and purchase of books subject, for pursuin*
.8@, and/or other mana*ement qualification at )ndia6s top most 8usiness "chools
Performance based incentives: )n many 829 companies they ha-e plans for ,
performance based incenti-e scheme The parameters for calculation are process
performance ie speed, accuracy and producti-ity of each process The 2ay for
2erformance can be as much as 22I of the salary
Flexi-time: The main objecti-e of the fle<time policy is to pro-ide opportunity to
employees to work with fle<ible work schedules and set out conditions for a-ailin* this
pro-ision Ale<ible work schedules are initiated by employees and appro-ed by
mana*ement to meet business commitments while supportin* employee personal life
needs The factors on which Ale<i time is allowed to an employee include+ 1hild or
2arent care, >ealth situation, .aternity, Aormal education pro*ram
Flexible Salary Benefits: )ts main objecti-e is to pro-ide fle<ibility to the employees to
plan a ta<;effecti-e compensation structure by balancin* the monthly net income, yearly
benefits and income ta< payable )t is applicable of all the employees of the or*ani:ation
The "alary consists of 8asic, $@ and 1on-eyance @llowance The Ale<ible 8enefit 2lan
consists of+ >ouse ,ent @llowance, Hea-e Tra-el @ssistance, .edical ,eimbursement,
"pecial @llowance
Regular Get together and other cultural programs: The companies or*ani:es cultural
pro*ram as and when possible but most of the times, once in a quarter, in which all the
employees are *i-en an opportunity to display their talents in dramatics, sin*in*, actin*,
dancin* etc @part from that the or*ani:ations also conduct -arious sports pro*rams such
as 1ricket, football, etc and re*ularly play matches with the teams of other or*ani:ations
and colle*es
Wedding Day Gift: %mployee is *i-en a *ift -oucher of ,s 2000/; to ,s E000/; based
on their le-el in the or*ani:ation
Employee Referral Scheme: )n se-eral companies employee referral scheme is
implemented to encoura*e employees to refer friends and relati-es for employment in
the or*ani:ation
7. PERFORMANCE MANAGEMENT SYSTEM OF BPO
INTRODUCTION
The history of mana*ement in )ndia can be traced to the %n*lish %ast )ndia 1ompany,
!1400O1GED' chartered by Kueen %li:abeth ) for trade with @sia @fter independence in
13DE, )ndia subscribed to a model which placed a stron* emphasis on central plannin*
and a bi* role for *o-ernment owned 2ublic "ector %nterprises !2"%s' who were
established to control the 5commandin* hei*hts5 of the economy @fter the economic
reforms of 1331 the country6s economy became much more inte*rated to the world
economy, which was the effect of liberali:ation in our country and *lobali:ation
worldwide The concept of human resources has under*one drastic chan*es as far as the
)ndian )ndustry is concerned The a*e;old concept of >uman ,esource .ana*ement has
chan*ed to >uman ,esource $e-elopment This chan*e has come as a result of the
chan*e in industry from manufacturin* in the public sector to information technolo*y in
the pri-ate sector
PERFORMANCE MANAGEMENT IN HUMAN RESOURCES:
The e-olution of the concept of performance mana*ement as a new >uman ,esource
.ana*ement model reflects a chan*e of emphasis in or*ani:ations away from
command;and;control toward a facilitation model of leadership This chan*e has been
accompanied by reco*nition of the importance to the employee and the institution of
relatin* work performance to the strate*ic or lon*;term and o-erarchin* mission of the
or*ani:ation as a whole The performance mana*ement process pro-ides an opportunity
for the employee and performance mana*er to discuss de-elopment *oals and jointly
create a plan for achie-in* those *oals $e-elopment plans should contribute to
or*ani:ational *oals and the professional *rowth of the employee 1ritical to the success
of this new model, a fle<ible attitude in the face of constant chan*e is most essential Aor
performance mana*ers, this chan*in* en-ironment offers many new challen*es and
opportunities 2erformance mana*ers and their employees are increasin*ly bein* asked
to become *eneralists who step outside of traditional narrowly;defined job descriptions
in support of team objecti-es and *oals These chan*es are resultin* in the de-elopment
of new approaches to human resource mana*ement
BPO INDUSTRY AND PERFORANCE MANAGEMENT:
The 829 industry with its major thrust on knowled*e workers offers a challen*e to the
>uman ,esource mana*er The major challen*es are+
Brand equity: 2eople still consider 829 to be 5low brow5, thus makin* it
difficult to attract the best talent
Standard pre-job training: @*ain, due to the wide -ariety of the jobs, lack
of *eneral clarity on skill sets, etc, there is no standard curriculum, which
could be desi*ned and followed
Benchmarks: There are hardly any benchmarks for compensation and
benefits, performance or >, policies %-eryone is chartin* his or her own
course
Standards of performance
1ob description & essential functions
Strategic plan & Annual goals
Observation & Feedback
Performance Appraisal
Performance Development
)n both the pre;job trainin* as well as in benchmarks, the role performance mana*ement
plays is not too small 2erformance appraisals whether they be pre/post trainin*, offers
the company a quick *lance throu*h the effecti-eness and the worthiness of a person in
the or*ani:ation and also helps in effecti-e placements
PERFORMANCE MANAGEMENT IN BPO INDUSTRY:
8usiness process outsourcin* !829' satisfaction le-els are on the up O but while more
or*ani:ations are now confident when ne*otiatin* outsourcin* contracts
.ost stru**le with on*oin* mana*ement and makin* the deal deli-er on*oin* -alue,
ar*ues "imon Hindley, 2rincipal 1onsultant at 9rbys 1onsultin*
9-er the last couple of years, the outsourcin* market has turned a corner and the
widespread perception of failure has been replaced by a *rowin* acceptance that 829
can really deli-er on its potential benefits O from reduced cost to supportin* business
*rowth throu*h effecti-e access to key skills 9r*ani:ations now ha-e a le-el of
confidence in ne*otiatin* outsourcin* contracts that is enablin* far more to achie-e
strate*ic objecti-es -ia a 829 arran*ement
)ndeed, in a recent independent study undertaken by 8enchmark ,esearch on behalf of
9rbys 1onsultin*, 23 percent stated the contract e<ceeded e<pectations, 41 percent
belie-ed it was in line with e<pectations and only nine percent felt that it fell below
e<pectations
>owe-er, it is also apparent that or*ani:ations increasin*ly reco*ni:e that *ettin* to
contract is just the be*innin* of a comple<, e-ol-in* relationship with the outsource
ser-ice pro-ider %nsurin* the contract retains its successful perception throu*hout the
business o-er the lon* term requires a proacti-e approach to mana*in* the relationship
between the business and 829 ser-ice pro-ider
Aor e<ample, post contract performance mana*ement should not just be about trackin*
ser-ice le-el a*reement !"H@' metrics )f or*ani:ations are to ma<imi:e their
relationship with a 829 ser-ice pro-ider and achie-e lon*;term strate*ic benefits O or
e-en just make sure they stay on track O then other key factors need to be identified,
monitored and acti-ely mana*ed a*ainst "ome will be on*oin* re*ular measuresB others
should be modified o-er time to reflect chan*in* business priorities, and current business
strate*y and initiati-es
This wider Pbalanced scorecardC approach to performance mana*ement is not only of
-alue to the business in dri-in* continuous impro-ement and business focus, it also
helps the 829 ser-ice pro-ider in terms of pro-idin* *reater clarity of customer
perceptions and satisfaction, and clearer specification of business priorities and how the
ser-ice pro-ider can help them be deli-ered
@lthou*h initially some ser-ice pro-iders may be wary of the additional effort and
in-estment required, the wiser ones will reali:e the potential for pro-idin* wider ser-ice
and project support %ffecti-e on*oin* mana*ement can also *reatly reduce the risk of
client dissatisfaction and therefore ultimately help a-oid subsequent re;tenderin* of the
contract or ser-ices bein* taken back in;house
PROCESSES OF PERFORMANCE MANAGEENT IN BPO INDUSTRIES:
8usiness process outsourcin* !829' has become an essential trend in the current
di*itali:ation and *lobali:ation en-ironment which influences the strate*y of enterprise
*reatly )n this paper, current research and results are discussed as well as their
deficiencies Then based on business process performance measurement, the total life
cycle mana*ement framework of 829 is brou*ht forward to sol-e challen*es identified
throu*h these deficiencies @t last business process performance and mana*ement
system and rele-ant concrete methods such as business process based risk analysis,
hierarchical fu::y co*niti-e map to simulate the cause;effect lo*ical relationships amon*
performance indicators are presented as well to support the analysis and decision in the
total life cycle mana*ement
1ompanies of today and tomorrow are confronted with intense *lobal competition,
demandin* customers with rapidly chan*in* desires, shrinkin* response times and
shortened product life cycle
>owe-er, *lobali:ation also *i-es companies an opportunity to take a fresh look at their
competiti-e strate*y and e<ploit outside resources e-en in remote re*ions Thus
outsourcin* has become the most popular strate*y in business for se-eral decades
@ccordin* to the definition in Q1R, outsourcin* is the operation of shiftin* a transaction
pre-iously *o-erned internally to an e<ternal supplier throu*h a lon*;term contract, and
in-ol-in* the transfer of staff to the -endor for the firm 9b-iously, outsourcin* implies
transferrin* a si*nificant amount of mana*ement control to the supplier @lthou*h
outsourcin* )T and other specific ser-ices has taken place for about ?0 years,
outsourcin* entire functions which is called business process outsourcin* !829' started
in the late 13G0s and early 1330s Q?R
There are se-eral principal reasons for company to outsource business process The first
is apparently cost sa-in* and to focus on core capabilitiesB the second is to impro-e or
reen*ineer the outsourced business processB and the third is that a business requires
immediate access to specialist skills )n the be*innin*, companies outsource their non;
core acti-ities to countries where labor and other e<penses are low 8ut today there is
more to 829 than just cuttin* down costs 829 tends to focus more on the o-erall
creation of -alue such as efficiency, hi*h quality and customer satisfaction
7hat are the major challen*es of 829 confronted by ser-ice pro-ider !or called third
party pro-iders' and outsourcin* company at presentS Arom the point -iew of ser-ice
pro-ider, there e<ists contradiction between lar*e scale and customi:ation
$ue to the comple< nature of business processes and acti-ities, ser-ice pro-iders ha-e to
cater for the special requirements of a company &e-ertheless to meet the demand for
fle<ible but multi;clients outsourcin* arran*ements, it is promisin* that the ad-ent of
standards;based architectures, such as 7eb "er-ices which pro-ide a standardi:ed )T
en-ironment will achie-e the seamless inte*ration between ser-ice pro-ider and
outsourcin* company
7hile from the point -iew of outsourcin* company and combined with many failure
cases, the principal challen*e and obstacle stems from loss of control on outsourced
acti-ities which always leads to the hu*e risk and hi*h failure rate "o the key to success
in all 829 se*ments, re*ardless of process or industry, is the ability to measure process
performance before a process is outsourced and durin* the life cycle of the en*a*ement
@lthou*h 829 is a *rowin* trend and has finally mo-ed from concept to reality, the
e<istin* hu*e risk and lack of support approaches and technolo*ies still lead to hi*h ratio
of unsuccessful cases 7ith the efforts of many researchers research work on this field is
si*nificantly de-eloped but still has not fully stepped up to meet the actual requirements
of potential world market Aurthermore these deficiencies in research findin*s mainly
focus on mana*in* approaches, not technical support >owe-er with the rapid )T
application de-elopment in 829 and dramatic impro-ement of business process
mana*ement, the procurement of process data turns to easier and business process;based
829 mana*ement with technical support is *ettin* possible
TOTAL LIFE CYCLE MANAGEMENT OF BPO BASED ON PROCESS
PERFORMANCE ANALYSIS
Throu*h the abo-e literature re-iew and to meet the challen*e abo-e mentioned, it is
inno-ati-e and feasible to propose technical support to 829 *roundin* on business
process analysis and put forward total life cycle mana*ement framework of 829 based
on business process performance analysis
Total Life Cycle Management of BPO-Framework

The total life cycle framework is proposed in attempt to shed li*ht on the relationship
between 829 and business process performance the total life cycle mana*ement
framework is proposed here @nd in the -iew of constructin* 829, its total life cycle is
composed of se-en phases which are illustrated in Ai*1 %ach phase will be elaborated
in the followin* section
(1) Analyzing and planning outsourcing
)t is ob-ious that 829 will brin* opportunities accompanied with risks to an outsourcin*
company "o before the Tmake or buyU decision, it is -ery critical to take an all;sided
analysis )n this sta*e, the analysis, which is normally based both on performance and
risk factors, firstly focuses on current business process if a-ailable Thus a comparison
can be made between the pre;outsourced and outsourced process
(2) Selecting service providers

)n this sta*e a set of e-aluation criteria must be defined to select prospecti-e 829
ser-ice pro-ider These criteria typically include cost, quality, )T capability and financial
stability @fter listin* the e-aluation criteria in a hierarchical way, decision method like
@>2 or e<pert system can be adopted to e-aluate potential pro-iders Then a formal
request for proposal !,A2' which take the abo-e e-aluation criteria listin* as a part
initiates the process
Thus the client and the prospecti-e ser-ice pro-iders enter into inter-iews, not only
re*ardin* price, but also skill, culture and commitment matchin* Ainally a ser-ice
pro-ider can be selected accordin* to the e-aluation criteria based on comparison, ,A2
responses and inter-iews
(3) Contracting and negotiating
)n this sta*e, the strate*y and major solutions of 829 are settledB problem resolution
procedures are establishedB to assure continued process impro-ement incenti-es as well
as punishments e-en rules for termination of contract before its le*ally specified end are
defined 7hatCs more, ser-ice le-el a*reement !"H@' has been widely used as a
reference for performance measurement
(4) Transferring activity
The details related to transferrin* business acti-ities like timetable for transfer, human
resources handlin* are mostly described in the outsourcin* contracts "ince the control
of business process is now reassi*ned to ser-ice pro-ider, how to properly inte*rate the
outsourced processes into the outsourcin* company and define their interfaces should be
paid *reat attention to
(5) Managing ongoing supplier
@fter the adaptation period, outsourcin* company now chan*es its role from operational
mana*ement into a more strate*ic one !monitorin* the 829 acti-ities and performance'
and forms a mana*ement team in char*e of coordination (enerally, because the
methods used by the mana*ement team to super-ise 829 acti-ities are scheduled by the
contracts !such as re*ular reports deli-ered by ser-ice pro-iders, periodical meetin*' and
lack of effecti-e technical support and analysis methodolo*y, this phase is always
confronted with many problems
(6) Ending Contract
@t the end of an outsourcin* contract the outsourcin* company has three options+ to
rene*otiate the contract with the same supplier, to chan*e supplier or to in;source the
acti-ity a*ain The two first options hi*hli*ht the cyclical nature of 829 while the last
one corresponds to its termination
(7) Constructing business process performance and management system
)n the abo-e framework shown in Ai* 1, this phase locatin* in the centre is put forward
to pro-ide effecti-e support for the most crucial three phases in the life cycle+ analy:in*
and plannin* outsourcin*, contractin* and ne*otiatin*, mana*in* on*oin* supplier The
importance of this phase is usually ne*lected or underestimated by stakeholders of
outsourcin* acti-ities which may cause many serious problems durin* the e<ecution of
outsourcin* contracts

To apply and support the total life cycle mana*ement framework, it is necessary to offer
rele-ant approaches and methods
@ccordin*ly business process performance and mana*ement system and some concrete
performance measurement methods are proposed as follows
)n terms of business process, as shown in Ai* 2, business process performance and
mana*ement system is composed of fi-e modules;;;business process modelin*, process
performance measurement system, process monitorin*, and process dia*nosis and
process impro-ement Airstly after determinin* business process lo*ic and collectin*
related process parameters, business process models are built by e<ploitin* suitable
process modelin* methods such as )$%A3, %21 and so on 8ecause there are two kinds
of hypotheses+ one is non )T;enabled business process while the other is )T;enabled, the
analysis thou*hts are split in two parts
The first part is to directly apply some dia*nosis and analysis methods like business
process based risk analysis and find out the unreasonable structure or parameter settin*
which need impro-ement The second part is based on performance measurement system
which is constructed normally in a hierarchical way accordin* to 829 strate*y,
stakeholdersC interests and business process objecti-es etc The measurement system
based on business process is supposed to be created to determine the performance of
829 "uch a system should be desi*ned to measure how well the outsourcin* strate*y
and objecti-es are bein* accomplished The system must be in place before the
outsourcin* starts so that a comparison can be made
Then throu*h the runnin* )T system, data related to the indicators monitored can be
e<tracted to assist business process dia*nosis The monitored indicators should include
measures broader than the traditional operational and financial onesB for e<ample,
includin* indicators to e-aluate the beha-ior of the supplier towards the relationship and
the impro-ements that the supplier brou*ht to the acti-ity .ethods such as e<tended
fu::y co*niti-e map combined with process data minin* can be introduced to dia*nose
the runnin* rele-ant business process @nd the followin* section is about to briefly
introduce some sorts of concrete methods in business process performance and
mana*ement system to support the application of total life cycle mana*ement framework
of 829
Ai*ure 2+ 8usiness process performance and mana*ement system
(1) Business process performance system construction
2erformance measurement of 829 is a constant challen*e @ll too often mana*ers *i-e
up tryin* to create inte*rated performance measurement systems !2."' because of the
difficulties in mana*in* inter;or*ani:ation transactions 8ut unless this problem is
addressed it is difficult to see how 829 can be realistically de-eloped in the future @nd
it is su**ested that a switch from transaction based 2." to process based 2." Q3R is
more likely to achie-e a robust and focused 2." leadin* to better and more consistent
customer ser-ice le-els 2rocess performance normally measured from the followin*
aspects+ ser-ice cost, time, ser-ice quality, ser-ice differentiation and so on @nd from
the -iew of stakeholders is also another way to construct process based 2."
!2) Risk analysis--- from business process model to fault tree
The risk related to a concerned process model which is associated with the cost of failure
process as well as system una-ailability is an important topic in the research of business
process performance The requirement to impro-e the process is also an attracti-e issue
To meet these challen*es, it is necessary to e-aluate the risk of new process models "o
it is -ery important that reliability analysis and risk assessment from se-eral aspects of
process modelin*, such as process structure and process functions To reali:e rele-ant
risk analysis and assessment, the fault tree analysis technique is presented This kind of
technique was de-eloped by > @ 7atson of the 8ell Telephone Haboratories in 1341;
1342 in an air force contract and it is also effecti-e for qualitati-e and quantitati-e
measurement 7ith reference to si*nificant research and results of QDR, at first, the
process models are depicted by rele-ant process modelin* tools issued by our research
team and then these process models will be mapped to related fault tree structures
@fterwards throu*h the minimal cut and path sets of fault tree technique, a methodolo*y
for identifyin* critical acti-ities in process models as well as in fault tree from reliability
and structural point -iew are put forward @nd this sort of technique can also be applied
in other aspects to e-aluate process models
(3) Extended fuzzy cognitive maps
"ince fu::y co*niti-e maps !A1.s' Q4R are a -ery intuitional and powerful tool for
simulation and analysis of dynamic systems, they are introduced to model the cause;
effect lo*ic relationship between process performance indicators and support reasonin*
of anticipated business process performance A1.s were ori*inally de-eloped in 13G0
by /osko, and since then successfully applied to numerous domains, such as
en*ineerin*, medicine, control, and political affairs A1. is a modelin* methodolo*y for
comple< decision systems, which ori*inated from the combination of fu::y lo*ic and
neural networks @n A1. Q2R describes the beha-ior of a system in terms of concepts
and each concept represents an entity, a state, a -ariable, or a characteristic of the
system The proposed mechanism utili:es the fu::y causal characteristics of A1.s as a
new modelin* technique to *enerate a hierarchical network of interconnected
performance indicators The wei*ht which indicates the fu::y cause;effect influences
from one indicator to another comes from e<pert knowled*e or analysis results based on
process data minin* @nd the proposed method aims at simulatin* the operational
efficiency of comple< hierarchical process models with imprecise relationships, while
quantifyin* the impact of the impro-ed process on the o-erall outsourcin* strate*y
2erformance appraisals ha-e become a tool of much importance in today6s mana*ement
scenario This could be used best only with the help of objecti-e and fair >, practices
The outputs of which could be used for 9r*ani:ation de-elopment rather than for mere
employee efficiency impro-ement 1asual and subjecti-e appraisals will not be able to
stand the test of fairness and le*ality if challen*ed Airms are thus bein* forced to
emphasi:e a participati-e but joint management by objectives followed by a
participati-e, joint;periodic appraisal, to brin* more clarity into the system
8ecause companies in-ol-ed in 829 are confronted with many challen*es especially
like the lack of performance measurement and mana*ement throu*hout the lifecycle, this
paper proposes a total life cycle mana*ement framework of 829 based on business
process performance @lso concrete methods such as business process based risk
analysis, hierarchical fu::y co*niti-e maps to simulate the cause;effect lo*ical
relationships amon* performance indicators are presented as well to support the analysis
and decision of the most important three sta*es in the 829 life cycle
)t is su**ested that a careful consideration of this framework and the use of related
supportin* technical methods can pro-ide insi*hts for 829 ser-ice pro-iders,
outsourcin* company, )T mana*ers and academicians
8. SUCCESSION PLANNING OF BPO INDUSTRY
"uccession plannin* is an essential part of corporate strate*y in most )T or*ani:ations
7hile the desi*n of the succession chart looks *ood on paper, it has often been found
that the plannin* process fails to meet requirements at the time of fillin* a key position
that has just been -acated )t is not an easy task dealin* with the e-er;chan*in* equations
of the leadership pipeline @ccordin* to a report by #";based business research firm
1uttin* %d*e, while many companies ha-e succession plans, -ery few follow throu*h
with the ri*orous implementation required )n fact, E0 percent of succession plans fail
due to bad e<ecution
"uccession plannin* has to ensure that the ri*ht people with the ri*ht skills are in the
ri*ht place at the ri*ht time )t can be done in three ways+ role;based, indi-idual;based
and team;based The first is about identifyin* key positions, the second focuses upon key
people, and the last in-ol-es replacin* a section of people or resources
Reviewing talent
9ne of the challen*es in all or*ani:ations is plannin* for >, needs )t is essential to
adopt a disciplined approach to match >, resources with the anticipated needs of an
or*ani:ation This includes ali*nin* the succession plannin* process with business
strate*y
TThe purpose of the talent re-iew is to fi*ure out the talent required to implement the
business strate*y and constantly stren*then the talent pool The talent re-iew and
plannin* process helps us identify talent for emer*in* roles in the or*ani:ation, says
8ijay "ahoo, -ice;president !talent en*a*ement and de-elopment' and head of >,,
7ipro Technolo*ies 1ommitment from the top mana*ement is another key factor for
ensurin* the success of succession plannin* "ahoo re-eals that in 7ipro, the chairman
!@:im 2remji' and -ice;chairman and 1%9 !Mi-ek 2aul' *i-e enormous importance and
their personal time for talent re-iew and plannin*, and personally super-ise the
de-elopment and implementation of the talent plan for key roles
@ccordin* to "ahoo, the other essential factors are+ !a' accountability, as the succession
plannin* pro*ramme requires ownership at all le-els in the or*ani:ation %ach mana*er
should be responsible for assessin* and de-elopin* the talent in his or her team !b'
1onstant attention, as it can be temptin* to o-erlook the need for succession plannin* in
the face of more immediate needs
Planning the process
The bench stren*th of current and future leaders *i-es a competiti-e ed*e to e-ery
or*ani:ation @t 7ipro, the succession plannin* pro*ramme is called Talent ,e-iew and
2lannin* !T,2', and it is the most critical part of the or*ani:ations leadership buildin*
and talent mana*ement process T9nce our business strate*y for the year is finali:ed, we
identify the critical roles to e<ecute it 7e re-iew the talent a-ailable for those roles
internally as well as e<ternally 7e plan for the succession of e<istin* critical roles,
includin* that of the 1%9, and identify employees who are ready to take o-er the roles
immediately and o-er the ne<t 1;2 or 2;3 years, informs "ahoo >e adds that the
company does de-elopmental plannin* for each identified internal candidate in terms of
job rotation, trainin*, coachin* and performance counselin* They also keep track of
potential e<ternal candidates, and establish touch points for attractin* them at the
appropriate time
The respecti-e "8# heads and the "8# >, heads do the T,2 for the top three le-els of
their business This contributes to the T,2 at the 7ipro Technolo*ies le-el, where the
chairman and -ice;chairman, alon* with the >, head, *et in-ol-ed in talent plannin* for
the top three le-els &e<t is the implementation of the talent strate*ies by de-elopin* and
re-iewin* the action plan
@t )nfinite 1omputer "olutions !)1"', which has a *lobal headcount of 1,G00, employees
ha-e also taken up hi*her roles without a chan*e in desi*nation, with support from
functional heads and senior mana*ement teamsS @ skill;*ap analysis is done of the
candidates, and requisite trainin* pro-ided to make them able successors
Clear focus
)t is a known fact that while most mana*ement is interested in de-elopin* a pool of
successors for key positions, they find it a difficult task to ensure the success of their
efforts "uccession plannin* can *et -ery complicated 9r*ani:ations must therefore
ha-e a clear focus
7ipro has quarterly talent en*a*ement and de-elopment !T%$' re-iews, and action
points of each "8# and -ertical are tracked T7e also track the number of senior
positions that are filled internally, which *i-es an indication of the success of the
pro*ramme @t the macro le-el, the retention fi*ure also reflects the effecti-eness of the
succession plannin* pro*ramme, since one of the objecti-es of the pro*ramme is to help
employees reali:e their career aspirations and thus retain them in the or*ani:ation
"ystematic succession plannin* does *enerate leadership talent, and an or*ani:ation can
measure its effecti-eness by lookin* at the leadership talent it has created and pro-ided
to the industry 7ipro is one of the top companies when it comes to creatin* top;class
leaders in the )T industry T.any of our e<;employees are headin* successful )T
companies,U says "ahoo with apparent pride
The training difference
9r*ani:ations are less -ulnerable to leadership crises when thereCs a shadow *roup of
successors who are able and a-ailable to step into their shoes Trainin* plays a key role
in succession plannin* )t is imperati-e to strate*ies, desi*n and implements pro*rammes
to train future leaders
7ipro has its lifecycle leadership de-elopment pro*rammes, which are synchroni:ed
with the roles employees play at different sta*es of their corporate life These include the
&ew Headers 2ro*ramme, 7ipro Headers 2ro*ramme, 8usiness Headers 2ro*ramme and
"trate*ic Headers 2ro*ramme for different leadership positions that an employee will
assume in the or*ani:ation
.ost or*ani:ations do skill;*ap analysis of the selected candidates @ schedule is drawn
for the prospecti-e indi-idual to acquire the knowled*e, skills and competencies within a
time;frame, says "under ,ajan, *eneral mana*er, >, = administration, )1" >e adds
that the trainin* could be throu*h internal pro*rammes or on;the;job !local as well as
*lobal' to *ain cross;functional or cross;*eo*raphical e<posure for better maturity of the
e<pertise that would enhance the confidence le-el of the person
1ust-in-time succession
Then there just;in;time succession, which maps e<istin* competencies of the staff to fill
an important position "uccession plannin* software uses competency analysis which
lets companies understand the demand side of the equation with what their staff has to
offer "uccession plannin* is not an issue of a positionB you can plan for two or three
years, but by that time the to;be;successor may ha-e already left the or*ani:ationB
consequently it is not rele-ant )nstead of lookin* at a job to fill, or*ani:ations should
profile it in terms of competencies, *o to the data bank, and find whose competency
profile matches the job, ad-ises "tephen .artin, president of )T@2 %urope The key to
this is competency de-elopment across the or*ani:ationB )T@2 has done succession
plannin* for many *lobal or*ani:ations throu*h competency de-elopment
7hate-er be the methodolo*y, measurin* the effecti-eness of a succession plannin*
pro*ramme is critical to e-ery or*ani:ation, irrespecti-e of its si:e @fter all, it is more
than just the passin* of power and responsibility it is about sur-i-al and continuity
9. REWARDS AND RECOGNITION IN BPO INDUSTRY
>, professionals all o-er the world, workin* is 1all;1enter or 1ontact 1enter or 829
industries are breakin* their heads to formulate ,etention "trate*ies but nothin* is
workin* in their fa-or The a-era*e attrition rate in this sector is still 3?;D0I &o perks,
no rewardsVjust nothin* is workin*
8efore proceedin* further, letCs see why people are lea-in*S 7hy there is hi*h attrition
rate
Why people are moving?
7hen there are so many benefits associated with 829 industryV when there are so
many pri-ile*es for the 829 employees than what makes them to chan*e the
company/industrySS )s it only .9&%0 that matters or anythin* else as wellSS @fter
takin* e<it;inter-iews and analy:in* the trend ) am able to list out followin* reasons for
a 829 professional to chan*e his/her job
&o *rowth opportunity/lack of promotion
Aor hi*her "alary
Aor >i*her education
.is*uidance by the company
2olicies and procedures are not conduci-e
&o personal life
2hysical strains
#neasy relationship with peers or mana*ers
HetCs also see as what are the -arious benefitsVthat ha-e been e<tended to people
workin* in this sector
Employee Benefits Provided By Majority of the BPO Companies
@ part from the le*al and mandatory benefits such as pro-ident;fund and *ratuity, below
is a list of other benefitsV829 professionals are entitled to the followin*+
1 Group Medical-claim Insurance Scheme: This insurance scheme is to pro-ide
adequate insurance co-era*e of employees for e<penses related to hospitali:ation
due to illness, disease or injury or pre*nancy in case of female employees or
spouse of male employees @ll employees and their dependent family members
are eli*ible $ependent family members include spouse, non;earnin* parents and
children abo-e three months
2 Personal Accident Insurance Scheme: This scheme is to pro-ide adequate
insurance co-era*e for >ospitali:ation e<penses arisin* out of injuries sustained
in an accident This co-ers total / partial disablement / death due to accident and
due to accidents
3 Subsidized Food and Transportation: The or*ani:ations pro-ide transportation
facility to all the employees from home till office at subsidi:ed rates The lunch
pro-ided is also subsidi:ed
D Company Leased Accommodation: "ome of the companies pro-ides shared
accommodation for all the out station employees, in fact some of the 829
companies also undertakes to pay electricity/water bills as well as the "ociety
char*es for the shared accommodation The purpose is to pro-ide to the
employees to lead a more comfortable work life balance
? Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities
include pool tables, chess tables and coffee bars 1ompanies also ha-e well
equipped *yms, personal trainers and showers at facilities
4 Corporate Credit Card: The main purpose of the corporate credit card is enable
the timely and efficient payment of official e<penses which the employees
undertake for purposes such as tra-el related e<penses like >otel bills, @ir tickets
etc
E Cellular Phone / Laptop: 1ellular phone and / or Haptop are pro-ided to the
employees on the basis of business need The employee is responsible for the
maintenance and safe*uardin* of the asset
G Personal Health Care (Regular medical check-ups): "ome of the 8296"
pro-ides the facility for e<tensi-e health check;up Aor employees with abo-e D0
years of a*e, the medical check;up can be done once a year
3 Loans: .any 829 companies pro-ide loan facility on three different occasions+
%mployees are pro-ided with financial assistance in case of a medical
emer*ency %mployees are also pro-ided with financial assistance at the time of
their weddin* @nd, The new recruits are pro-ided with interest free loans to
assist them in their initial settlement at the work location
10 Educational Benefits: .any 829 companies ha-e this policy to de-elop the
personality and knowled*e le-el of their employees and hence reimburse the
e<penses incurred towards tuition fees, e<amination fees, and purchase of books
subject, for pursuin* .8@, and/or other mana*ement qualification at )ndia6s top
most 8usiness "chools
11 Performance based incentives: )n many 829 companies they ha-e plans for,
performance based incenti-e scheme The parameters for calculation are process
performance ie speed, accuracy and producti-ity of each process The 2ay for
2erformance can be as much as 22I of the salary
12 Flexi-time: The main objecti-e of the fle<time policy is to pro-ide opportunity
to employees to work with fle<ible work schedules and set out conditions for
a-ailin* this pro-ision Ale<ible work schedules are initiated by employees and
appro-ed by mana*ement to meet business commitments while supportin*
employee personal life needs The factors on which Ale<i time is allowed to an
employee include+ 1hild or 2arent care, >ealth situation, .aternity, Aormal
education pro*ram
13 Flexible Salary Benefits: )ts main objecti-e is to pro-ide fle<ibility to the
employees to plan a ta<;effecti-e compensation structure by balancin* the
monthly net income, yearly benefits and income ta< payable )t is applicable of
all the employees of the or*ani:ation The "alary consists of 8asic, $@ and
1on-eyance @llowance The Ale<ible 8enefit 2lan consists of+ >ouse ,ent
@llowance, Hea-e Tra-el @ssistance, .edical ,eimbursement, "pecial
@llowance
1D Regular Get together and other cultural programs: The companies or*ani:es
cultural pro*ram as and when possible but most of the times, once in a quarter, in
which all the employees are *i-en an opportunity to display their talents in
dramatics, sin*in*, actin*, dancin* etc @part from that the or*ani:ations also
conduct -arious sports pro*rams such as 1ricket, football, etc and re*ularly play
matches with the teams of other or*ani:ations and colle*es
1? Wedding Day Gift: %mployee is *i-en a *ift -oucher of ,s 2000/; to ,s E000/;
based on their le-el in the or*ani:ation
14 Employee Referral Scheme: )n se-eral companies employee referral scheme is
implemented to encoura*e employees to refer friends and relati-es for
employment in the or*ani:ation
1E Employee Stock Option Plan: &ow, the actual question, why people are
lea-in*S 7hat types of retention strate*ies are requiredS 7hat is e<pected from
>, 2rofessional and how they can address this issueS
Retention - A Big Challenge
Aundamental chan*es are takin* place in the work force and the workplace that promise
to radically alter the way companies relate to their employees >irin* and retainin* *ood
employees ha-e become the chief concerns of nearly e-ery company in e-ery industry
1ompanies that understand what their employees want and need in the workplace and
make a strate*ic decision to proacti-ely fulfill those needs will become the dominant
players in their respecti-e markets
The fierce competition for qualified workers results from a number of workplace trends,
includin*+
@ robust economy
"hift in how people -iew their careers
1han*es in the unspoken 5contract5 between employer and employee
1orporate cocoonin*
@ new *eneration of workers
1han*es in social mores
Hife balance
1oncurrent with these trends, the emer*in* work force is de-elopin* -ery different
attitudes about their role the workplace Today6s employees place a hi*h priority on the
followin*+
Aamily orientation
Kuality of life issues
@utonomy
To hold onto your people, you ha-e to work counter to pre-ailin* trends causin* the job
churnin* "mart employers make it a strate*ic initiati-e to understand what their people
want and need ;; then *i-e it to them
Retention Strategies
This is not an e<hausti-e list, one can add or delete any of the below mentioned
strate*ies "econdly, the need of the hour is to ha-e 5ri*ht basics5 %-ery indi-idual is
different, his needs are different, and his emotions, his problems are different "o, dear
>,;2rofessionalsVsit down and concentrate on your basics ) ha-e classified retention
strate*ies into two parts+ .ain and @ncillary
Main retention strategies
This is not an e<hausti-e list, one can add or delete any of the below mentioned
strate*ies "econdly, the need of the hour is to ha-e 5ri*ht basics5 %-ery indi-idual is
different, his needs are different, and his emotions, his problems are different "o, dear
>,;2rofessionalsVsit down and concentrate on your basics
1 Communications - Getting Your People to Care
1ommunication is the first step toward creatin* the kind of en-ironment that people
care about, and if they care, they just may stay )6m not talkin* about a lot of &ew
@*e strokin* desi*ned to brin* out the inner person or false praise that creates a
misplaced sense of security )nstead, keep your people in the loop about what6s
happenin* with the company @t any time, all of your employees should ha-e a
pretty *ood idea of how business has been, and they should be aware of what issues
the company is attemptin* to address
That means that you re*ularly keep your people up to date with important e-ents
affectin* the company )f &o-ember was *ood, let them know, and while you6re at it,
tell them what you e<pect to happen in $ecember "hare *ood news, as well as
points of concern )f you6-e *ot 5issues,5 talk about them before they start makin*
you cra:y @nd if they don6t *et resol-ed, fi*ure out whether the problem stems from
a couple of indi-iduals or from your system
The point here is that you want to treat these people as your partners, which they are
They may not ha-e to worry about co-erin* the payroll this week, but they do ha-e
worries of their own Treat them with at least as much respect as they *i-e you @s
the store6s owner or mana*er, you set the tone for the entire or*ani:ation )f your
salespeople, for instance, enjoy their encounters with you, they are much more likely
to *reet customers with a positi-e attitude They are also much more likely to enjoy
their work when they don6t ha-e a fire;breathin* dra*on lookin* to sin*e their butts
Histen to your employees when they ha-e ideas for impro-ement @*ain, the benefits
e<tend beyond just makin* people feel appreciated for their contributions These are,
after all, the people who do the work e-ery day They may ha-e some ideas to
impro-e producti-ity, and when they do come up with one, let e-erybody know
where it came from 2ost a 5bra* board5 in your break room, or circulate an internal
newsletter that touts these contributions The pay;off is a conta*ious feelin* of pride
and, perhaps, some new efficiency that sa-es the company money
2 Set Clear Expectations
o >ow often do you appraise your employees/team;membersS
o 7hat are your e<pectations from your employees/team;membersS 7hat
are the parameters to measure their performanceS >a-e you
communicated to themS
o 7hat will be the consequences, if they failS
o 7hat will be the rewards, if they e<ceed the e<pected le-elS
)f you are not ha-in* any e<pectations, how you are *oin* to appraise, your employeesS
0es, you are *oin* to be biased, because you don6t ha-e set standards
The role of a 1%9, >, .ana*er is like a director of a mo-ieB choreo*rapher of a sta*e
show, where there is a defined role for each character, each participant
"ettin* e<pectations initiates the process .ana*ers need to sit down with each
employee and clearly define what6s e<pected of them .ana*ement consultant, /enneth
2hilips, states that when e<pectations are not clear, employees may not be in sync with
their job6s current demands and priorities "ettin* e<pectations is not a once and done
acti-ity Jobs chan*e 2riorities chan*e ,esources chan*e .ana*ers need to re-ise and
set new e<pectations throu*hout the year "ettin* e<pectations re-ol-es around the
followin* three areas+
o /ey job responsibilities
o 2erformance factors and standards
o (oals
7hy is a settin* e<pectation importantS Kuite simply, this process can be the
cornerstone of impro-in* the moti-ational climate within your sphere of responsibility
)f your employees know what is e<pected of them, it allows them to focus on results and
to monitor themsel-es a*ainst the set standards %n-ironments in which e<pectations are
not clear, or chan*e from week to week, seldom create hi*h;performin* work *roups
The three principles that should dri-e e<pectations are clarity, rele-ance, and simplicity
Clarity. %<pectations should focus on outcomes, not acti-ities )n other words, you
achie-e clarity when you identify the e<pected results rather than the method for
achie-in* them .ana*ers often make the mistake of attemptin* to direct the process
that an employee will use rather than bein* clear about results The ad-anta*e of
identifyin* the outcome is that you, the mana*er, focus only on the *oalB after all, the
employee will de-elop the method for achie-in* the desired results
$efinin* the objecti-e often requires some thou*ht on the part of the mana*er because it
is easy to fall into the 5acti-ities trap5 7hile de-elopin* a strate*ic plan for a
department or di-ision is a worthy acti-ity, it does not represent an outcome )n the
acti-ities trap, de-elopin* a plan is the *oal, rather than increasin* your market share
,ele-ance The principle of rele-ance helps define the 5why5 of the assi*nment )f your
employees ha-e a full understandin* of the project6s importance, they can make
adjustments as unanticipated factors crop up within the process They probably also will
be more committed to the result because they can see more easily how it fits into the bi*
picture and how their efforts impact the company
This understandin* typically is accomplished throu*h dialo*ue between the mana*er and
subordinate, which allows for a more thorou*h re-iew of the situation and for feedback
and discussion This process builds *ood will with the employee and sets the sta*e for
additional responsibilities
"implicity creates a sense of *roundin* for employees as they endea-or to carry out
assi*nments )f mana*ers identify the work in simple, strai*htforward terms, employees
will find it much easier to follow throu*h on mana*ers6 wishes To accomplish this, a
mana*er must identify the key messa*e in a fashion that the employee can embrace
3. Proper Rewarding
@ research reports says that in today6s scenario,
o E0I of your employees are less moti-ated today than they used to be
o G0I of your employees could perform si*nificantly better if they wanted
to
o ?0I of your employees only put enou*h effort into their work to keep
their job
@s you mi*ht be aware of %mployee ,eward co-ers how people are rewarded in
accordance with their -alue to an or*ani:ation )t is about both financial and non;
financial rewards and embraces the strate*ies, policies, structures and processes used to
de-elop and maintain reward systems The ways in which people are -alued can make a
considerable impact on the effecti-eness of the or*ani:ation, and is at the heart of the
employment relationship
The aim of employee reward policies and practices, if any in your or*ani:ation is to help
attract, retain and moti-ate hi*h;quality people (ettin* it wron* can ha-e a si*nificant
ne*ati-e effect on the moti-ation, commitment and morale of employees 2ersonnel and
de-elopment professionals will be in-ol-ed frequently in reward issues, whether they are
*eneralists or speciali:e in people resourcin*, learnin* and de-elopment or employee
relations /eep followin* parameters in mind, while desi*nin* a reward policy+
4. Build a high degree of recognition value into every reward you offer.
,eco*nition is the most cost;effecti-e moti-ator there is 7hile the hi*h cost of other
rewards forces us to *i-e them sparin*ly, reco*nition can be *i-en any time, at -ery little
cost
"ome -ery ordinary items and e-ents can be imbued with e<traordinary moti-ational
si*nificance, far in e<cess of their monetary -alue ) am constantly ama:ed at how
moti-atin* a pi::a or mo-ie tickets can be if is *i-en with sufficient appreciation @
sincere thank you can be deli-ered at any place and at any time, costs absolutely nothin*
and can be more moti-ationally powerful than a substantial monetary bonus
9r*ani:ations can pro-ide inno-ati-e reco*nition in an infinite number of ways
Aor e<ample, !@ >ypothetical )ncident' a small manufacturin* company made its
employees feel like heroes when they attained a major safety milestone ; 100 days
without a sin*le accident 9n the mornin* of day 100, it was announced that a catered
lunch would be ser-ed the ne<t day, if they made it to the ?+30 shift without an accident
@t ?+1? anticipatin* was buildin* .ana*ers took confetti and streamers to the balcony
o-erlookin* the shop floor 7hen the ?+30 whistle blew, there were con*ratulations all
around, confetti flew throu*h the air and banners were unfurled )t was a *reat moment
for e-eryone ; and one that was not soon for*otten The reco*nition -alue of this
celebration was e<tremely hi*h, while the monetary cost was relati-ely low
>i*hly moti-atin* or*ani:ations e-en celebrate small successes @ health;conscious
company distributes fruit bowls to employees6 work areas when key personal milestones
are attained @nother company uses a more fattenin* approach+ fresh;baked chocolate;
chip cookies to say thank you
5. Reduce entitlements and link as many rewards as possible to performance.
1learly the traditional 5pay for loyalty5 systems in most or*ani:ations need to be
chan*ed $on6t let attendance be your major criterion for rewards .ost employees
resent those who only put in their time and yet recei-e the same reward as those who *o
the e<tra mile Today6s employees ha-e hi*her e<pectations for what work can and
should be, and they want to recei-e rewards that reflect their personal efforts and
contributions
This is why so many companies are mo-in* toward performance;based rewards,
includin* performance bonuses, *ain;sharin* and non;monetary reco*nition @lthou*h
not a panacea, companies are findin* that these new reward systems do allow them to
*i-e substantial rewards to those who really deser-e them "mart or*ani:ations are
lookin* for opportunities to reduce across;the;board entitlements, and thereby find more
resources for discretionary performance;based rewards, without increasin* the total cost
of rewards
6 Troubleshoot your reward system to make sure that what it is rewarding is what
you really want to happen.
The Haw of ,ewards ; 57hat you reward is what you *et5 ; )s e<tremely powerful &o
matter what your orientation materials or job description mi*ht say, it is the rewards
your or*ani:ation *i-es that communicate the real e<pectations The most important
question to ask in e-aluatin* the reward system in your or*ani:ation is, do the rewards
we are *i-in* elicit the performance we wantS "tart with the results you want to achie-e
and then pinpoint the types of beha-iors needed to achie-e them Aor e<ample+
o )f you belie-e teamwork is *oin* to *et you the results you want, make
sure you reward teamwork, and not internal competition between
departments
o )f you want quality, make sure that producti-ity isn6t o-er emphasi:ed
@nd,
o )f you want lon*;term solutions, don6t reward quick fi<es
@lso, don6t confuse employees with too many rewards )t is better to focus rewards on
the critical few beha-iors and results, rather than dilutin* them by rewardin* the tri-ial
many
E Reward promptly. ,ewards should be *i-en as soon as possible after the
performance has taken place This is why the most successful *ain;sharin* pro*rams pay
employees monthly, rather than quarterly or annually as in the past
There is a well;accepted law of beha-ioral psycholo*y, that if you want someone to
repeat a beha-ior, you should positi-ely reco*ni:e it immediately Arom this law, smart
super-isors and mana*ers can learn a -ital lesson+ Hook for any employee doin*
somethin* ri*ht, ri*ht now, and reco*ni:es it
@ support to this, here is my fa-orite reward story+
57hen a senior mana*er in one or*ani:ation was tryin* to fi*ure out a way to reco*ni:e
an employee who had just done a *reat job, he spontaneously picked up a banana !which
his wife had packed in his lunch', and handed it to the astonished employee with hearty
con*ratulations &ow, one of the hi*hest honors in that company has been dubbed the
5(olden 8anana @ward55
8. Give employees a choice of rewards. ,ewards are as different as the people who
recei-e them and it doesn6t make sense to *i-e rewards that recipients don6t find
rewardin* Aor e<ample, some people prefer more pay, while others prefer more time
off @ promotion mi*ht be more rewardin* to one person, while a job;sharin*
arran*ement mi*ht be more rewardin* for another "ome people are e<cited about sports
e-ents, others about mo-ies "ome employees would lo-e a dinner in a romantic
restaurant, others a book by their fa-orite author Aood, fun, education, impro-ed work
en-ironment, *ifts, tra-el, and family;oriented acti-ities ; the options are endless
>ow do you know what will be rewardin* to employeesS @sk them "mart or*ani:ations
are also lettin* employees choose their own rewards from reward menus and catalo*s
2ersonali:in* rewards shows that a company cares enou*h to disco-er what 5interests5
each employee, rather than just distributin* *eneric items )t also reduces the followin*
dan*er+ )n one or*ani:ation ) was -isitin*, an employee opened a bi* drawer in his desk
and disdainfully showed me all the 5worthless trinkets5 he had collected o-er the years
3 Increase the longevity of your rewards. This can be done in a number of ways+ 9ne
of the keys to reward lon*e-ity is symbolism The more symbolic an item is of the
accomplishment, the more likely it is to continue remindin* the employee of why it was
*i-en Aor instance, a T;shirt of coffee mu* with a meanin*ful inscription will continue
rewardin* those who wear it, or use it, lon* after its initial receipt There are many
tokens of appreciation ) still keep on or near my desk that remind me of the joy of past
accomplishments, while the monetary rewards ) ha-e recei-ed are lon* spent and lon*
for*otten
@nother way to increase the lon*e-ity of rewards in your or*ani:ation is by usin* some
kind of point system ,ather than rewardin* each indi-idual beha-ior or
accomplishment, points can be awarded, which employees can accumulate and
e-entually trade for items from a reward menu or *ift catalo* This keeps the
anticipation of rewards fresh for lon*er periods of time )t also addresses the need for
reward indi-iduali:ation
9ne company that desi*ns moti-ational systems offers an electronic debit;card system to
help lar*er clients cope with the comple<ity of distributin*, trackin* and redeemin*
employees6 points %mployees can use their points to purchase -irtually anythin* they
want, from sports equipment and clothin* to automobiles and o-erseas -acations They
only ca-eat for such pro*rams is to make sure that the reco*nition -alue of the rewards
isn6t lost because of the impersonal nature of the technolo*y
9ne company uses a *ame it 1all "afety 8in*o @ll employees recei-e a weekly bin*o
card 7hen an employee is obser-ed workin* safely, a number is presented !immediate
reco*nition' 7hen they *et 5bin*o5, they recei-e a safety jacket !alon* with appropriate
-erbal reinforcement' The rewards escalate for subsequent wins This type of pro*ram
keeps employees interested for lon* periods of time, e-en thou*h there mi*ht be weeks
or months between rewards, and makes routine work more fun o-erall
)nterestin*ly, when researchers ha-e in-esti*ated the moti-ational dynamics of these
workplace *ames, they ha-e found that the major moti-ator is the playin*, not the pri:e
10. Be continually vigilant of demotivators that may undermine your organization's
best efforts to provide power rewards, and reduce them promptly: .ost
demoti-ators can be dramatically reduced by solicitin* employee in-ol-ement in
identifyin* hi*hest;priority demoti-ators and by enlistin* top;mana*ement commitment
to support their reduction
)t is probably self;e-ident that considerable sensiti-ity is needed in the administration of
any reward system 9ne demoti-ators that is probably endemic in any reward system
modification !especially as an or*ani:ation mo-es from entitlements to more
performance;based rewards' is a sense that somethin* is bein* taken away %mployees
need to be educated about the reasons that this is bein* done, understand the ultimate
benefits to them and the or*ani:ation, and should probably ha-e some input into the
chan*e process
To a-oid the perception of unfairness, it is important, first and foremost, that the process
for allocatin* rewards is -iewed by employees as bein* impartial This requires an
objecti-e measurement system that few or*ani:ations ha-e 7ithout such objecti-e
measurement, any reward system is probably destined to failure
11. Ancillary Retention Strategies The quality of the super-ision an employee recei-es
is critical to employee retention 2eople lea-e mana*ers and super-isors more often than
they lea-e companies or jobs )t is not enou*h that the super-isor is well liked or a nice
person, startin* with clear e<pectations of the employee, the super-isor has a critical role
to play in retention @nythin* the super-isor does to make an employee feel un-alued
will contribute to turno-er Arequent employee complaints center on these areas
Hack of clarity about e<pectations,
Hack of clarity about earnin* potential,
Hack of feedback about performance,
Aailure to hold scheduled meetin*s, and
Aailure to pro-ide a framework within which the employee
percei-es he can succeed
12 The ability of the employee to speak his or her mind freely within the or*ani:ation is
another key factor in employee retention $oes your or*ani:ation solicit ideas and
pro-ide an en-ironment in which people are comfortable pro-idin* feedbackS )f so,
employees offer ideas, feel free to critici:e and commit to continuous impro-ement )f
not, they bite their ton*ues or find themsel-es constantly 5in trouble5 ; until they lea-e
13 Talent and skill utili:ation is another en-ironmental factor your key employees seek
in your workplace @ moti-ated employee wants to contribute to work areas outside of
his specific job description >ow many people could contribute far more than they
currently doS 0ou just need to know their skills, talent and e<perience, and take the time
to tap into it @s an e<ample, in a small company, a mana*er pursued a new marketin*
plan and lo*o with the help of e<ternal consultants @n internal sales rep, with se-en
years of ad a*ency and lo*o de-elopment e<perience, repeatedly offered to help >is
offer was i*nored and he cited this as one reason why he quit his job )n fact, the
reco*nition that the company didn6t want to take ad-anta*e of his knowled*e and
capabilities helped precipitate his job search
1D The perception of fairness and equitable treatment is important in employee
retention )n one company, a new sales rep was *i-en the most potentially successful,
commission;producin* accounts 1urrent staff -iewed these decisions as takin* food off
their tables 0ou can bet a number of them are lookin* for their ne<t opportunity
)n another instance, a staff person, just a year or two out of colle*e, was *i-en 20,000 in
raises o-er a si< month time period )nformation of this type ne-er stays secret in
companies so you know, beyond any shadow of a doubtB the morale of se-eral other
employees will be affected
Aor e<ample, you ha-e a staff person who -iews her role as important and she brin*s ten
years of e<perience, an .8@ and a *reat contribution record to the table 7hen she
finds she is makin* less money than this employee, she is likely to look for a new job
.inimally, her morale and moti-ation will take a bi* hit $id the staff person deser-e
the raisesS 0es 8ut, reco*ni:e that there will be impact on others
1? 0our best employees, those employees you want to retain, seek frequent
opportunities to learn and *row in their careers, knowled*e and skill 7ithout the
opportunity to try new opportunities, sit on challen*in* committees, attend seminars and
read and discuss books, they feel they will sta*nate
14 A career-oriented, valued employee must experience growth opportunities
within your organization. @ commonplace complaint or lament ) hear durin* an e<it
inter-iew is that the employee ne-er felt senior mana*ers knew he e<isted 8y senior
mana*ers ) refer to the president of a small company or a department or di-ision head in
a lar*er company
1E Take time to meet with new employees to learn about their talents, abilities and
skills. Meet with each employee periodically. 0ou6ll ha-e more useful information and
keep your fin*ers on the pulse of your or*ani:ation )t6s a critical tool to help employees
feel welcomed, acknowled*ed and loyal
1G &o matter what the circumstances are but never, never, ever threaten an
employee's job or income. %-en if you know layoffs loom if you fail to meet
production or sales *oals, it is a mistake to foreshadow this information with employees
)t makes them ner-ousB no matter how you phrase the informationB no matter how you
e<plain the information, e-en if you6re absolutely correct, your best staff members will
update their resumes )6m not ad-ocatin* keepin* solid information away from peopleB
howe-er, think before you say anythin* that makes people feel they need to search for
another job
10. CHALLENGES FOR HR PROFFESSIONAL IN BPO INDUSTRY
Business process outsourcing (BPO) is a broad term referring to outsourcing in all
fields. A BPO differentiates itself by either putting in new technology or applying
existing technology in a new way to improve a process.
8usiness 2rocess 9utsourcin* !829' is the dele*ation of one or more )T;intensi-e
business processes to an e<ternal pro-ider that in turn owns administers and mana*es the
selected process based on defined and measurable performance criteria 8usiness
2rocess 9utsourcin* !829' is one of the fastest *rowin* se*ments of the )nformation
Technolo*y %nabled "er-ices !)T%"' industry
Aew of the moti-ation factors as to why 829 is *ainin* *round are+
Aactor 1ost @d-anta*e
%conomy of "cale
8usiness ,isk .iti*ation
"uperior 1ompetency
#tili:ation )mpro-ement
(enerally outsourcin* can be defined as ; An organization entering into a contract with
another organization to oerate an! "anage one or "ore o# it$ %u$ine$$ roce$$e$&
Different Types of Services Being Offered By BPO's
1 Customer Support Services
9ur customer ser-ice offerin*s create a -irtual customer ser-ice center to mana*e
customer concerns and queries throu*h multiple channels includin* -oice, e;mail
and chat on a 2D/E and 34? days basis
"er-ice %<ample+ 1ustomers callin* to check on their order status, customers
callin* to check for information on products and ser-ices, customers callin* to
-erify their account status, customers callin* to check their reser-ation status etc
2. Technical Support Services
9ur technical support offerin*s include round;the;clock technical support and
problem resolution for 9%. customers and computer hardware, software,
peripherals and )nternet infrastructure manufacturin* companies These include
installation and product support, up = runnin* support, troubleshootin* and
#sa*e support
"er-ice %<ample+ 1ustomers callin* to resol-e a problem with their home 21,
customers callin* to understand how to dial up to their )"2, customers callin*
with a problem with their software or hardware
3 Telemarketing Services
9ur telesales and telemarketin* outsourcin* ser-ices tar*et interaction with
potential customers for 6prospectin*6 like either for *eneratin* interest in products
and ser-ices, or to up;sell / promote and cross sell to an e<istin* customer base or
to complete the sales process online
"er-ice %<ample+ 9utbound callin* to sell wireless ser-ices for a telecom
pro-ider, outbound callin* to retail households to sell leisure holidays, outbound
callin* to e<istin* customers to sell a new rate card for a mobile ser-ice pro-ider
or outbound callin* to sell credit or debit cards etc
D Employee IT Help-desk Services
9ur employee )T help;desk ser-ices pro-ide technical problem resolution and
support for corporate employees
"er-ice %<ample+ of this ser-ice include le-el 1 and 2 multi;channel support
across a wide ran*e of shrink wrapped and H98 applications, system problem
resolutions related to desktop, notebooks, 9", connecti-ity etc, office
producti-ity tools support includin* browsers and mail, new ser-ice requests, )T
operational issues, product usa*e queries, routin* specific requests to desi*nated
contacts and remote dia*nostics etc
? Insurance Processing
9ur insurance processin* ser-ices pro-ide speciali:ed solutions to the insurance
sector and support critical business processes applicable to the industry ri*ht
from new business acquisition to policy maintenance to claims processin*
"er-ice %<ample+
New Business / Promotion:
)nbound/outbound sales, )nitial "etup, 1ase .ana*ement, #nderwritin*, ,isk
assessment, 2olicy issuance etc
Policy Maintenance / Management:
,ecord 1han*es like &ame, 8eneficiary, &ominee, @ddressB 1ollateral
-erification, "urrender @udits @ccounts ,ecei-able, @ccountin*, 1laim
9-erpayment, 1ustomer care ser-ice -ia -oice/email etc
6. Data Entry Services / Data Processing Services
"er-ice %<ample+
o $ata entry from 2aper/8ooks with hi*hest accuracy and fast turn around
time !T@T'
o $ata entry from )ma*e file in any format
o 8usiness Transaction $ata entry like sales / purchase / payroll
o $ata entry of %;8ooks / %lectronic 8ooks
o $ata %ntry + 0ellow 2a*es / 7hite 2a*es /eyin*
o $ata %ntry and compilation from 7eb site
o $ata 1apture / 1ollection
o 8usiness 1ard $ata %ntry into any Aormat
o $ata %ntry from hardcopy/2rinted .aterial into te<t or required format
o $ata %ntry into "oftware 2ro*ram and application
o ,eceipt and 8ill $ata %ntry
o 1atalo* $ata %ntry
o $ata %ntry for .ailin* Hist/.ailin* Habel
o .anuscriptin* typin* in to word
o Taped Transcription in to word
o 1opy, 2aste, %ditin*, "ortin*, )nde<in* $ata into required format etc
7. Data Conversion Services
"er-ice %<ample+
o 1on-ersion of data across -arious databases on different platforms
o $ata 1on-ersion -ia )nput / 9utput for -arious media
o $ata 1on-ersion for databases, word processors, spreadsheets, and many
other standard and custom;made software packa*es as per requirement
o 1on-ersion from 2a*e maker to 2$A format
o 1on-ersion from .s;7ord to >T.H format
o 1on-ersion from Te<t to 7ord 2erfect
o 1on-ersion from Te<t to 7ord to >T.H and @crobat
o 1on-ert ,aw $ata into required ." 9ffice formats
o Te<t to 2$A and 2$A to 7ord / Te<t / $oc
o $ata 1ompilation in 2$A from "e-eral "ources
o %;8ook 1on-ersion etc
G Scanning, OCR with Editing & Indexing Services
"er-ice %<ample+
o >i*h speed )ma*e;"cannin* and $ata capture ser-ices
o >i*h speed lar*e -olume scannin*
o 91, $ata Arom "canned pa*e / ima*e
o "can = 91, paper 8ook in to 1$
o @$98% 2$A 1on-ersion "er-ices
o 1on-ersion from paper or e;file to -arious formats
3 Book Keeping and Accounting Services
"er-ice %<ample+
o (eneral Hed*er
o @ccounts ,ecei-ables and @ccounts 2ayable
o Ainancial "tatements
o 8ank ,econciliation
o @ssets / %quipment Hed*ers etc
10. Form Processing Services:
"er-ice %<ample+
o )nsurance claim form
o .edical Aorm / .edical billin*
o 9nline Aorm 2rocessin*
o 2ayroll 2rocessin* etc
11. Internet / Online / Web Research
"er-ice %<ample+
o )nternet "earch, 2roduct ,esearch, .arket ,esearch, "ur-ey, @nalysis
o 7eb and .ailin* list research etc
Challenges for a HR Professional in BPO
1 8rand equity+ 2eople still consider 829 to be 5low brow5, thus makin* it
difficult to attract the best talent
2 "tandard pre;job trainin*+ @*ain, due to the wide -ariety of the jobs, lack of
*eneral clarity on skill sets, etc, there is no standard curriculum, which could be
desi*ned and followed
3 8enchmarks+ There are hardly any benchmarks for compensation and benefits,
performance or >, policies %-eryone is chartin* their own course
D 1ustomer;companies tend to demand better results from outsourcin* partners
than what they could actually e<pect from their own departments 57hen the job
is bein* done 10,000 miles away, demands on parameters such as quality, turn
around timeliness, information security, business continuity and disaster
reco-ery, etc, are far hi*her than at home "o, how to be more efficient than the
ori*inalS
? Hack of focused trainin* and certifications
(i-en this back*round, the recruitin* and compensation challen*es of >,
departments are only understandable
Key To success
The key to success in rampin* up talent in a 829 en-ironment is a rapid trainin*
module The trainin* component has to be seen as an important sub;process, requirin*
constant re;en*ineerin*
Business Process Outsourcing: The Top Rankers
7&" has emer*ed as the top 829 in )ndia, pushin* 7ipro "pectra mind to the second
position, accordin* to a sur-ey done by &@""19. The basis of rankin* is the
re-enues *enerated by the 829 companies in 2003;0D, as per #" (@@2 @ list of top
fifteen 829 companies in )ndia is *i-en below
1 7&" (roup
2 7ipro "pectra mind
3 $aksh e;"er-ices
D 1on-er*es
? >1H Technolo*ies
4 Jenta
E )1)1) 9ne source
G .phasi"
3 %NH
10 Tracmail
11 (TH Htd
12 -1ustomer
13 >T.T
1D 2D/E 1ustomer
1? "utherland Technolo*ies
The parameters for the sur-ey was+ %mployee "i:e !9peration le-el e<ecuti-es',
2ercenta*e of last salary hike, 1ost to company, 9-erall "atisfaction "core, 1omposite
"atisfaction, 1ompany 1ulture, Job 1ontent / (rowth, Trainin*, "alary and
1ompensation, @ppraisal "ystem, 2eople, 2referred 1ompany+ !2ercenta*e of
respondents of a company who named their own company as the preferred one', $ream
1ompany+ !2ercenta*e of respondents in the total sample who preferred a particular
company'
Employee Benefits Provided By Majority of the BPO Companies
2ro-ident Aund+ @s per the statutory *uidelines, the employee is required to
contribute a percenta*e of his basic salary and $@ to a common fund The
employer for this fund contributes as well The employee can use the amount
deposited in this fund for -arious personal purposes such as purchase of a new
house, marria*e etc
(ratuity+ (ratuity is one of the retrial benefits *i-en to the employee in which
the employer e-ery year contributes a particular amount The fund created can be
used by the employee for the purpose of lon*;term in-estment in -arious thin*s
such as a house etc
(roup .edical claim )nsurance "cheme+ This insurance scheme is to pro-ide
adequate insurance co-era*e of employees for e<penses related to hospitali:ation
due to illness, disease or injury or pre*nancy in case of female employees or
spouse of male employees @ll employees and their dependent family members
are eli*ible $ependent family members include spouse, non;earnin* parents and
children abo-e three months
2ersonal @ccident )nsurance "cheme+ This scheme is to pro-ide adequate
insurance co-era*e for >ospitali:ation e<penses arisin* out of injuries sustained
in an accident )t is applicable to all the employees of JA7T1 and co-ers total /
partial disablement / death due to accident and due to accidents
"ubsidi:ed Aood and Transportation+ The or*ani:ations pro-ide transportation
facility to all the employees from home till office at subsidi:ed rates The lunch
pro-ided is also subsidi:ed
1ompany Heased @ccommodation+ "ome of the companies pro-ide shared
accommodation for all the out station employees, in fact some of the 829
companies also undertakes to pay electricity/water bills as well as the "ociety
char*es for the shared accommodation The purpose is to pro-ide to the
employees to lead a more comfortable work life balance
,ecreation, 1afeteria, @T. and 1oncier*e facilities+ The recreation facilities
include pool tables, chess tables and coffee bars 1ompanies also ha-e well
equipped *yms, personal trainers and showers at facilities
1orporate 1redit 1ard+ The main purpose of the corporate credit card is enable
the timely and efficient payment of official e<penses which the employees
undertake for purposes such as tra-el related e<penses like >otel bills, @ir tickets
etc
1ellular 2hone / Haptop+ 1ellular phone and / or Haptop is pro-ided to the
employees on the basis of business need The employee is responsible for the
maintenance and safe*uardin* of the asset
2ersonal >ealth 1are !,e*ular medical check;ups'+ "ome of the 8296" pro-ides
the facility for e<tensi-e health check;up Aor employees with abo-e D0 years of
a*e, the medical check;up can be done once a year
Hoans+ .any 829 companies pro-ides loan facility on three different occasions+
%mployees are pro-ided with financial assistance in case of a medical
emer*ency %mployees are also pro-ided with financial assistance at the time of
their weddin* @nd, The new recruits are pro-ided with interest free loans to
assist them in their initial settlement at the work location
%ducational 8enefits+ .any 829 companies ha-e this policy to de-elop the
personality and knowled*e le-el of their employees and hence reimburses the
e<penses incurred towards tuition fees, e<amination fees, and purchase of books
subject, for pursuin* .8@, and/or other mana*ement qualification at )ndia6s top
most 8usiness "chools
2erformance based incenti-es+ )n many 829 companies they ha-e plans for ,
performance based incenti-e scheme The parameters for calculation are process
performance ie speed, accuracy and producti-ity of each process The 2ay for
2erformance can be as much as 22I of the salary
Ale<i;time+ The main objecti-e of the fle<time policy is to pro-ide opportunity to
employees to work with fle<ible work schedules and set out conditions for
a-ailin* this pro-ision Ale<ible work schedules are initiated by employees and
appro-ed by mana*ement to meet business commitments while supportin*
employee personal life needs The factors on which Ale<i time is allowed to an
employee include+ 1hild or 2arent care, >ealth situation, .aternity, Aormal
education pro*ram
Ale<ible "alary 8enefits+ )ts main objecti-e is to pro-ide fle<ibility to the
employees to plan a ta<;effecti-e compensation structure by balancin* the
monthly net income, yearly benefits and income ta< payable )t is applicable of
all the employees of the or*ani:ation The "alary consists of 8asic, $@ and
1on-eyance @llowance The Ale<ible 8enefit 2lan consists of+ >ouse ,ent
@llowance, Hea-e Tra-el @ssistance, .edical ,eimbursement, "pecial
@llowance
,e*ular (et to*ether and other cultural pro*rams+ The companies or*ani:es
cultural pro*ram as and when possible but most of the times, once in a quarter, in
which all the employees are *i-en an opportunity to display their talents in
dramatics, sin*in*, actin*, dancin* etc @part from that the or*ani:ations also
conduct -arious sports pro*rams such as 1ricket, football, etc and re*ularly play
matches with the teams of other or*ani:ations and colle*es
7eddin* $ay (ift+ %mployee is *i-en a *ift -oucher of ,s 2000/; to ,s E000/;
based on their le-el in the or*ani:ation
%mployee ,eferral "cheme+ )n se-eral companies employee referral scheme is
implemented to encoura*e employees to refer friends and relati-es for
employment in the or*ani:ation
2aid $ays 9ff
.aternity Hea-e
%mployee "tock 9ption 2lan
CONCLUSION
)nspite of all these benefits, the attrition rate in 829 industry is -ery hi*h, whyS 7hat is
the reason for an employee to lea-eS These and many more are the questions that need
immediate attention from the industrial *urus
Why people prefer to join BPO's?
)n *eneral a person with any *raduation can join any of the 829 "ome 8296s like to
take people with .8@ but then a*ain the speciali:ation are of an indi-idual hardly
makes any difference @*ain, this is the industryB where there is no reference checks and
-ery often people don6t e-en specify there e<act a*e Hets me share with you some of the
reasons as why people prefer to join a 829+
1 $id not *et a better job
2 Aind nothin* better to do
3 %ducation le-el doesn6t matter
D (ood work en-ironment
? (ood 8enefits
4 Ale<ibility of time
E @ttracti-e life style
G Transport facility
Why people leave the BPO's?
7hen there are so many benefits associated with 829 industrywhen there are so many
pri-ile*es for the 829 employees than what makes them to chan*e the
company/industrySS )s it only .9&%0 that matters or anythin* else as wellSS >ere are
some of the reasons for a 829 professional to chan*e his/her job
1 &o *rowth opportunity/lack of promotion
2 Aor hi*her "alary
3 Aor >i*her education
D .is*uidance by the company
? 2olicies and procedures are not conduci-e
4 &o personal life
E 2hysical strains
G #neasy relationship with peers or mana*ers
What they have to say?
7ith so much of uncertainty in the market 2eople are tryin* their best to stop or to at
least ha-e a control on the attrition ratelet me share with you the opinion of the real
*urus of the industry TTrainin* is a -ery important aspect of the )T%";829 industry
T1areer *rowth in the industry is robust and there is a lon*;term opportunity The *reat
*rowth momentum that the industry is witnessin* is creatin* both -ertical and lateral
career opportunities There also e<ists enou*h *rowth opportunities in the middle;
mana*ement and super-isory le-el within the industry5
)t will not be possible for the industry to arri-e at a blanket a*reement on poachin* but
bilateral a*reements between companies are bein* si*ned 8asic norms are bein* put in
place and code of ethics is bein* stressed upon by industry players within the sector with
respect to >, practices 7e are encoura*in* companies to adopt responsible beha-ior in
order to ensure that the industry does not become a -ictim of its own actions )ndustry
needs to *o a**ressi-e but not cannibalistic5