This action might not be possible to undo. Are you sure you want to continue?
Process Outsourcing) Industry and to promote corporate gifts in BPO’s with reference to Company Store. BY MANASWI PURWAR (520792238)
A project report submitted for the partial fulfillment of the requirements for the degree of Master of Business Administration of Sikkim Manipal University, India.
Sikkim-Manipal University of Health, Medical and Technological Sciences Distance education wing Syndicate House
CHAPTER 1. INTRODUCTION
INTRODUCTION TO BPO INDUSTRY
Outsourcing began in the early eighties when organizations started delegating their non-core functions to an external organization that was specialized in providing a particular service, function or product. In outsourcing, the external organization would take on the management of the outsourced function. In outsourcing, the outsourcer and the outsourcing partner have a greater relationship when compared to the relationship between a buyer and a seller. In outsourcing, the outsourcer trusts the outsourcing partner with vital information. Outsourcing is no longer confined to the outsourcing of IT services. Outsourcers in the US and UK now outsource financial services, engineering services, creative services, data entry services and much more. Most organizations are opting to outsource because outsourcing enables organizations to access intellectual capital, focus on core competencies, shorten the delivery cycle time and reduce costs significantly. Organizations feel outsourcing is an effective business strategy to help improve their business. BUSINESS PROCESS OUTSOURCING – “Business Process Outsourcing” is the fastest-growing segment of outsourcing market – A industry which we all “Love to hate and hate to love”. Business process outsourcing is a type of outsourcing that involves the contracting of the operations and the responsibilities of a specific business processes or functions to a third party service provider. BPO is typically categorized in to back-office outsourcing which includes internal business functions i.e. human resources, or finance and accounting and front office outsourcing which includes customer related services i.e. call center services. Business process outsourcing (BPO) is the leveraging of technology vendors to provide and manage a company's critical and/or non-critical enterprise applications. Through the business transformation process of service-oriented transformation, which leverages the technologies and standards of service-oriented architecture, companies can increasingly leverage third party companies that act as business service providers. Business process outsourcing can use off-shore resources, but is not required.
Business process outsourcing (BPO) is the act of giving a third-party the responsibility of running what would otherwise be an internal system or service conducted in-house. Outsourcing system allows companies to contract for services that are not within the scope of their expertise, so that they can focus their time, money and energy on their core competencies instead of wasting valuable resources trying to gain Understanding of areas that are somebody else's expertise. BPO is seen as outsourcing that involves IT supported processes but that doesn’t involve discontinuities between the IT and the rest of the business process. BPO has evolved far from these IT-specific roots and now encompasses nearly every business process.To be sure, the implementation of a BPO initiative will always involve a technology component, but for that matter so does implementation of a benefits administration office at the local beer distributor. The point is, nearly every modern business innovationcomprises both a technical and a social component. Decision making, strategy setting, service delivery, and virtually every other businessactivity are now sociotechnical in nature, involving humans interfacing with technical systems. BPO is like that. Fundamentally, then, BPO is a socio-technical business innovation that provides a rich new source of competitive advantage. By socio-technical we mean that BPO requires skillful management of people and technology (hardware and software).The manager who initiates a BPO strategy must find effective ways to introduce people to technology and vice-versa. If left solely in the hands of technical specialists, a BPO initiative is likely to fail for lack of paying attention to the soft issues of human relationships, change management, and organizational culture. If left solely in the hands of nontechnical managers, it is likely to fail for unrealistic expectations about the potential and limitations of the enabling technologies.
The reasons behind outsourcing the processes are as follows –
Cost Cutting - Process outsourcing has been used for times immemorial to enhance shareholder value by controlling costs and avoiding capital expenditures associated with purchase of new systems and upgradation. These savings can then be channeled in to the core areas of the company. It has been indicated that for every dollar invested in BPO across India, the value derived by the US economy is between $ 12-14. Improving efficiency and productivity – Conventionally, executives spends their 80% of their time in management of details and only 20% on formulating strategies. But the situation is remarkably different when the business process is outsourced. This saved time helps them tremendously to explore new revenues areas, accelerate other projects, and focus on their customers. Business process outsourcing has another big advantage which leads to increase in capabilities of the employees and the company. This will results in to productivity improvements. Companies that outsource their business processes are often able to capture new efficiencies and in the process improve upon their productivity. They are in a better position to reallocate their resources to other important projects. Focus on Core competencies - The current business scenario worldwide dictates that a successful company must have a great core process to just to stay in the game. Outsourcing is the only way a company can invest its time and money on these vital core processes and at the same time get better performance out of non-core functions. To remain competitive in the global economy, you need to concentrate on what made you successful in the first place – your core business. You can't afford to expend valuable time and energy managing transactions and noncore processes that could be handled by other specialists. By outsourcing non-core processes, companies can concentrate on increasing their sales and market share, develop new products; spread out into new markets and increase customer service and satisfactions. The most important factor behind the growth in the BPO market world wide today is an increase in the number of enterprises that are reviewing their internal
operations in an attempt to fully understand their true core competencies. In the process they are able to focus more on their core competencies. Business Process Outsourcing gives more freedom to the management to focus more time, energy, and resources on building the company's core businesses. It is because the BPOs assume full responsibility for managing the day-to-day back-office operations.
Outside expertise- Company is saved from the hassles of recruiting and training personnel. BPOs ensure that experts from another company provide the needed guidance and skills, that too at very low wages. Companies that want to grow internationally must continuously invest in infrastructure and find talent around the world and this is possible only trough business process outsourcing. Many outsourcing providers are already established globally and help in increasing the capabilities of the companies that are outsourcing their work to these BPOs.
BPO BUSINESS MODELS
Different models have been used for conducting business in BPO. The regular outsourcing models of on-shoring, near-shoring and offshoring are seen in BPO as well. TPI, a sourcing advisory, has observed that in addition to on-shoring, nearshoring and offshoring, BPO operations are also conducted through the following three business models : ➢ Transactional BPO: Transactional BPO handles one aspect of a process only. The customer has to carry out a significant part of the process in-house and hence the customer owns the risk of the process. Also, outsourcing many aspects of the process in a transactional mode leads to complex fragmentation which can pose as a threat to productive delivery.
➢ Niche BPO: A niche BPO carries out 3-4 aspects of a process. A niche BPO,
which also makes certain investments in the customer's process, aims at improving the efficiency of the process. The vendor in a niche BPO works in close coordination with the buyer, sometimes seeking the services of the customer's employees. Both the vendor and the buyer share the risk of the process.
Comprehensive BPO: A comprehensive BPO handles both transactional and administrative tasks in a process and takes 70 percent responsibility of the output. The vendor purchases the buyer's assets and also hires most of its employees. Comprehensive BPO has bulk deals lasting for 7-10 years.
Number of Processes
Number of processes
Transactions only for 1 process No, migrate everything to their system No
10 + Process in a function. Yes-significant dollars and employee take on. Yes-but usually>100 and often in 1000’s. Mixed, people at both client and provider’s location. Global
Invest in client assets
Yes- but modest dollars and personnel take on.
Hire clients people
Mixed, people at both client and provider’s location Domestic >80% with some international 3-5 Years 5-10 million/Yr Make processes more efficient For Process outcomes
Contract duration Contract value / Year Business model
1-2 years $1-5 million/Yr. Offload transactions from client. For the transaction processing 90% client, 10% provider Pre transaction
7-10 years $50-100 Mn/Yr. Make functions more efficient For cost savings.
50% client, 50% provider Based on outcome
30% client, 70% provider Based on outcome
ADVANTAGES AND DISADVANTAGES OF OUTSOURCING
By gaining insight about both the good and bad of outsourcing, organizations can decide if outsourcing is right for them. Most organization jump headlong into outsourcing, without actually finding out if outsourcing is good for their business. Before outsourcing, ensure that you are aware about the pros and cons of outsourcing. The advantages and disadvantages of outsourcing can help your organization decide if outsourcing is right for your business. ADVANTAGES – Outsourcing your non-core activities will give you more time to concentrate on your core business processes . ➢ Offshoring can give you access to professional, expert and high-quality services. ➢ With outsourcing your organization can experience increased efficiency and productivity in non-core business processes . ➢ Outsourcing can help you streamline your business operations . ➢ Offshore outsourcing can help you save on time, effort, manpower, operating costs and training costs amongst others . ➢ Outsourcing can make your organization more flexible to change . ➢ You can experience an increased control of your business with outsourcing ➢ Your organization can save on investing in the latest technology, software and infrastructure as your outsourcing partner would be investing in these . ➢ Outsourcing can give you assurance that your business processes are being carried out efficiently, proficiently and within a fast turnaround time . ➢ Offshoring can help your organization save on capital expenditures. ➢ By outsourcing, your company can save on management problems as your offshore partner will be managing the team who does your work . ➢ By outsourcing, you can cater to the new and challenging demands of your customers . ➢ Outsourcing can help your organization to free up its cash flow. ➢ Sharing your business risks is possible with outsourcing . ➢ Outsourcing can give your business a competitive advantage as you will be able to increase productivity in all the areas of your business . ➢ Outsourcing can help your organization to cut is operational costs to more than half .
DISADVANTAGES – The disadvantages of outsourcing give organizations an opportunity to think about what they are stepping into. However the disadvantages of outsourcing are less than the advantages of offshore outsourcing. At times, it is more cost-effective to conduct a particular business process, rather than outsourcing it . ➢ While outsourcing services such as payroll processing services and tax preparation services, your outsourcing provider will be able to see your company’s confidential information and hence there is a threat to security and confidentiality in outsourcing . ➢ When you begin to outsource your business processes, you might find it difficult to manage the offshore provider when compared to managing processes within your organization . ➢ Offshoring can create potential redundancies for your organization . ➢ In case, your offshore service provider becomes bankrupt or goes out of business, your organization will have to immediately move your business processes in-house or find another outsourcing provider . ➢ The employees in your organization might not like the idea of you outsourcing your processes and they might express lack of interest or lack of quality at work . ➢ Your outsourcing provider might not be only providing services for your organization. Since your provider might be catering to the needs of several companies, there might be not be complete devotion to you and your company . ➢ By outsourcing, you might forget to cater to the needs of your valuable customers as your focus will be on the business process that is outsourced . ➢ In outsourcing, you may lose your control over the process that is outsourced . ➢ Outsourcing, though cost-effective, might have hidden costs, such as the legal costs incurred while signing a contract between companies. You might also have to spend a lot of time and effort in getting the contract signed . ➢ With outsourcing, your organization might suffer from a lack of customer focus . ➢ There can be several disadvantages in outsourcing, such as, renewing contracts, misunderstanding of the contract, lack of communication, poor quality and delayed services amongst others.
DIFFERERNT TYPES OF SERVICES OFFERED BY BPO’s
The services offered by the BPO’s are to serve the customer needs and offer them a satisfaction level. Providing better services is the key to retain the customers and to strengthen the client base. In developing country BPO companies offered various services to their clients like e-Accounting, Financial Analysis, Software development, Technical assistance, data entry etc….. Business process outsourcing (BPO) services enable you to redefine your operational priorities, adapt and perform better. BPO addresses efficiency and effectiveness of operations, and provides greater flexibility to adapt to the changing times.
Customer Support Services Customer service offerings create a virtual customer service center to manage customer concerns and queries through multiple channels including voice, e-mail and chat on a 24/7 and 365 days basis. Service Example: Customers calling to check on their order status, customers calling to check for information on products and services, customers calling to verify their account status, customers calling to check their reservation status etc. Technical Support Services Technical support offerings include round-the-clock technical support and problem resolution for OEM customers and computer hardware, software, peripherals and Internet infrastructure manufacturing companies. These include installation and product support, up & running support, troubleshooting and Usage support. Service Example: Customers calling to resolve a problem with their home PC, customers calling to understand how to dial up to their ISP, customers calling with a problem with their software or hardware.
Telemarketing Services Telesales and telemarketing outsourcing services target interaction with potential customers for 'prospecting' like either for generating interest in
products and services, or to up-sell / promote and cross sell to an existing customer base or to complete the sales process online. Service Example: Outbound calling to sell wireless services for a telecom provider, outbound calling to retail households to sell leisure holidays, outbound calling to existing customers to sell a new rate card for a mobile service provider or outbound calling to sell credit or debit cards etc. 4. Employee IT Help-desk Services Employee IT help-desk services provide technical problem resolution and support for corporate employees. Service Example: of this service include level 1 and 2 multi-channel support and system problem resolutions related to desktop, notebooks, OS, connectivity etc., office productivity tools support including browsers and mail, new service requests, IT operational issues, product usage queries, routing specific requests to designated contacts and remote diagnostics etc. 5. Insurance Processing Insurance processing services provide specialized solutions to the insurance sector and support critical business processes applicable to the industry right from new business acquisition to policy maintenance to claims processing. Service Example: New Business / Promotion: Inbound/outbound sales, Initial Setup, Case Management, Underwriting, Risk assessment, Policy issuance etc. Policy Maintenance / Management: Record Changes like Name, Beneficiary, Nominee, Address; Collateral verification, Surrender Audits Accounts Receivable, Accounting, Claim Overpayment, Customer care service via voice/email etc. 6. Data Entry Services / Data Processing Services Service Example: ➢ Data entry from Paper/Books with highest accuracy and fast turn around time (TAT) ➢ Data entry from Image file in any format ➢ Business Transaction Data entry like sales / purchase / payroll. ➢ Data entry of E-Books / Electronic Books
➢ ➢ ➢ ➢ ➢
Data Entry : Yellow Pages. Data Entry and compilation from Web site Data Capture / Collection Business Card Data Entry into any Format . Data Entry from hardcopy/Printed Material into text or required format. Data Entry into Software Program and application Receipt and Bill Data Entry Catalog Data Entry. Data Entry for Mailing List/Mailing Label. Copy, Paste, Editing, Sorting, Indexing Data into required format etc.
7. Data Conversion Services Service Example: ➢ Conversion of data across various databases on different platforms. ➢ Data Conversion via Input / Output for various media. ➢ Data Conversion for databases, word processors, spreadsheets, and many other standard and custom-made software packages as per requirement. ➢ Conversion from Page maker to PDF format. ➢ Conversion from Ms-Word to HTML format ➢ Conversion from Text to Word Perfect. ➢ Conversion from Text to Word to HTML and Acrobat . ➢ Convert Raw Data into required MS Office formats. ➢ Text to PDF and PDF to Word / Text / Doc ➢ Data Compilation in PDF from Several Sources. ➢ E-Book Conversion etc.
Book Keeping and Accounting Services Service Example:
➢ General Ledger ➢ Accounts Receivables and Accounts Payable ➢ Financial Statements ➢ Bank Reconciliation ➢ Assets / Equipment Ledgers etc. 9. Form Processing Services: Service Example: ➢ Insurance claim form . ➢ Medical Form / Medical billing . ➢ Online Form Processing . ➢ Payroll Processing etc. 10.Internet / Online / Web Research Service Example: ➢ Internet Search, Product Research, Market Research, Survey, Analysis. ➢ Web and Mailing list research etc. BPO’s provides these efficient services at reasonable costs and will be able to slash the time and money requirements by a large amount. The complete range of BPO services are used by the organizations which require end-to-end management, for their business operations. The focus is on precise operational activities, combined with state of the art infrastructure, has proved to be beneficial for widespread client network.
CHAPTER 2. INDIAN BPO INDUSTRY
INDIAN BPO INDUSTRY
At the turn of the millennium, India has numerous reasons to smile about. The economy is no longer passive and redundant; on the contrary it is one that is being steered by the winds of social and economic changes. During the past few years, the country has seen phenomenal developments in its political, social and economic infrastructure, accelerated by the strong forces of globalization and Information Technology. A country with a resurgent, progressive economy; India can be rightly called the foster-child of globalization. The booming Information
Technology (IT) segment comprising ITES (IT-enabled services) / BPO (Business Process Outsourcing) are the core sectors that have driven the country into the epicenter of change. The liberalization of the Indian Telecom sector in 1994 gave an unexpected boost to the ITES/BPO industry. India has enormous opportunities emerging from globalization and consequent lowering of tariff barriers. Information Technology has given India formidable brand equity in the global markets. Indian BPO companies have a unique distinction of providing efficient business solutions with cost and quality as an advantage by using state of art technology. Through joint efforts of Government and the Industry, software development and IT enabled services have emerged as niche opportunities for India in the global context. The Government has been making continuous efforts to make India a front-runner in the age of Information revolution. In no time, India has turned into a hot destination for global offshore outsourcing companies. The expansion in this sector can be attributed to the leading IT giants, captive players and third party service providers, who dominate the Indian ITES/BPO market. While the countries around the world are vying for a fair share of the cake, India has grabbed the pie as the preferred destination for offshore outsourcing. Indeed, India is shining! By virtue of different advantages India has been able to maintain its supremacy over its rivals in the BPO industry but there are a number of other countries, which can give India run for its money in Business Process Outsourcing. Some of the prominent competitors of BPO India are China, Philippines, Mexico, Canada, and Malaysia etc… 2008 was a transformational year for the Indian Information Technology-Business Process Outsourcing (IT-BPO) sector, as it began to re-engineer itself to face the challenges presented by a macro-economic environment which witnessed substantial volatility in commodity prices, inflation, and decline in GDP rates, cross-currency movement, finally culminating in the economic downturn. In an increasingly globalised world, significant complexity and uncertainty is getting attached to this unprecedented economic crisis. The Indian economy has also been impacted by the recessionary trends, with a slowdown in GDP growth to seven per cent. The focus and exponential growth in the domestic market has partially offset this fall and insulated the country, resulting in net overall momentum. The IT-BPO industry in India has today become a growth engine for
the economy, contributing substantially to increases in the GDP, urban employment and exports, to achieve the vision of a “young and resilient” India. During the year, the sector maintained its double digit growth rate and was a net hirer. This growth has been fueled by increasing diversification in the geographic base and industry verticals, and adaptation in the service offerings portfolio. While the effects of the economic crisis are expected to linger in the near term future, the Indian IT-BPO industry has displayed resilience and tenacity in countering the unpredictable conditions and reiterating the viability of India’s fundamental value proposition. Consequently, India has retained its leadership position in the global sourcing market.While the current mood is that of “cautious optimism,” the industry is expected to witness sustainable growth over a two-year horizon, going past its USD 60 billion export target in FY2011. While the industry has significant headroom for growth, competition is increasing, with a number of countries creating enabling business environments aimed at replicating India’s success in the IT-BPO industry. Hence, concerted efforts are required by all stakeholders to address the current challenges, to ensure that India realises its potential, and maintains its leadership position. India still has the leading edge in the BPO industry, but it should keep on improvising to maintain its stability. Therefore India should be on its guard to maintain its position intact. If India has to maintain its supremacy in BPO and its software workforce, then BPO India has to learn Spanish, which is spoken in more than 24 countries. With India already stamping its superiority in the BPO sector with its knowledge of the English language, it now needs just one other language that will make the world its market, which is Spanish.
If we compare India’s advantage over US in terms of cost involved , India stands a leap ahead from US in cost benefits.
Fig. Comparison among the cost involved/benefit – source NAASCOM.
US$ Cost per FTE (Full Time Employee) Personnel G&A Expense Telecom Property Rentals Depreciation TOTAL EXPENSES
United States 42,927 8,571 1,500 2,600 3,000
India 6,179 1,000 2,328 847 1,500
India as % of US costs 14% 12% 155% 33% 50% 20%
It may seem a little strange, perhaps even ironic, to many social scientists and historians that a country known to be in perpetual slow motion, with one of the lowest literacy rates, and quite infamous for its lack of service attitude would be chosen by the world to become a global services hub. But India has been a country of stark contrasts. It continues to be. When all this began, just about half a decade back, its telecom infrastructure on which the whole offshoringmodel is dependent on, was one of the poorest, by any standard, most certainly by the standards of the countries that chose to move their services to India. In the matters of faith, India has never disappointed. From Buddhism in the era before Christ, to technology in the twenty-first century, India has delivered value—spiritual or material—whenever the world has turned to it. Offshoring has not been an exception. Most companies who have outsourced to India have realized that India has consistently delivered a higher quality, leading to the slogan —come here for cost, stay here for quality. There is no doubt that they came here for cost. But they also came here because we could speak English. They came here because India had built an awareness about itself by successfully delivering offshore IT services. However, two reasons that are extremely important in explaining the large-scale success of India areOne—India’s large pool of manpower—often gets mentioned as just another factor. In fact, India’s large human pool—so far seen as a liability and believed to be the cause of all that is negative about the country—is the single-most important asset
that has not just made people shift their services here, but will make them stay here. The icing on the cake is: unlike many of our potential competitors—this manpower is not concentrated in Delhi or Mumbai. They are spread everywhere in India. So India will not get saturated anytime. Delhi or Bangalore may, but not India. The second reason—and this is never even mentioned in the numerous presentations that you hear everyday—is the power of global Indian, more correctly the ‘embedded Indian’. India can sustain this lead over other nations, who could potentially be cheaper in comparison to India. Two major factors that would sustain India’s position as the global outsourcing hub are its demography and its intellectual prowess.
REASONS OF BEING THE #1 BPO DESTINATION
During the last decade, the IT Industry and BPO (Business Process Outsourcing), have significantly increased. India has had a fundamental role in this growth as a principal destination of Outsourcing/Off shoring for the World and the country that holds close to 65% of the total IT industry in Off shoring and 46% of the total BPO1 industry. The global outsourcing market is currently growing at a rapid pace due to the benefits that it offers, and it is projected that during the upcoming years India will continue to be one of the principal destinations for outsourcing given the variety of factors that have made it tan ideal place for this industry. For today’s youngsters, the call centers are a welcome addiction. The industry has woven such magic around the entire nation that these days a city without a call centre would be hard to find. Call centers contribute a fair share to the revenue of the Indian BPO industry. About 70% of the BPO industry’s revenue comes from call-centers, 20% from high-volume, low-value data work and the remaining 10% from higher-value information work. The average Indian’s attitude towards life has undergone a drastic change in the last few years. The motto of today’s young Indian generation is “Live life king size”. The changing lifestyles, demand for luxury and emergence of high-income spending groups coupled with a thoroughly cosmopolitan outlook of life are changing the modern Indian. Call centers are a major turn on for young graduates.
In addition to providing employment, the call centres offer excellent benefits, good working environment and attractive remuneration packages.
There are several reasons to choose India consistently number one BPO destination or service provider – Human Resources – Availability of suitable human resources is one of those factors which have made India one of the hotspots of BPO/IT industry. India is home to a vast pool of human resources consisting of educated, English speaking, tech-savvy personnel. Every year, approximately 19 million students are enrolled in high schools and 10 million students in pre-graduate degree courses across India. Moreover, 2.1 million graduates and 0.3 million post-graduates pass out of India's non-engineering colleges. These figures very well give the idea of human resources availability in India. This great pool of human resources holds the key to IT/BPO destination i.e. India. India is rich not only in terms of number of qualified peoplebut the quality is also of international level. IT/BPO industry. If we calculate the availability of human resources at current rates, there will approximately be 17 million people available to the IT industry by the year 2008. Language – India definitely enjoys the benefits of a vast pool of skilled workers who are proficient in English language. India produces the largest number of graduates every year and most of these graduates have the knowledge of English language. Thus, language is one of those factors which attract MNCs to contract out their business operations to Indian BPOs and IT companies. Though there are competitors like China which also have a large pool of skilled workers but they don't have enough graduates who have command over English language. In addition to this the Indian education system also places strong emphasis on mathematics and science. This has resulted into a large number of science and engineering graduates. Mastery over quantitative concepts coupled with English proficiency makes India one of the hot spots of the IT/BPO word. It has enabled the India to take advantage of the current international demand for IT.
Government Policies The Indian government realizes that Information Technology has the potential to influence extensive economic development in the country. IT is now one of the top priorities of the Indian government and favorable policies are being formulated to extract maximum benefits from the industry. Here, we are highlighting some of the government policies which have proved very beneficial in the growth of IT/BPO industry. These favorable government policies have gone a long way in making India a BPO/IT hub.
➢ The reforms have reduced licensing requirements and made foreign technology accessible. The reforms have also removed restrictions on investment and made the process of investment easier. This has tremendously helped the IT/BPO industries. ➢ The Indian government is actively promoting FDI and investments from NRIs (Non-Resident Indians). FDI can be brought in through the automatic route, based on powers accorded to the Reserve Bank of India. ➢ In pursuance of liberalization and globalization, the Indian government has been formulating and implementing more transparent and investment friendly policies. This is now reflecting in many areas. Till 1994, DOT was the sole provider of basic telecom services in India but the new telecom policy opened the field to the private operators as well. It has made India one of the fastest growing countries in the field of telecom. ➢ Another significant example of the liberal policy of the Indian government is the IT Act. The IT Bill passed in 2000 provides a legal framework for the recognition of electronic contracts, prevention of computer crimes, electronic filing of documents, etc. ➢ In pursuance of the liberal policies, the Indian government has been continuously proposing amendments in the Indian Evidence Act, Indian Penal Code and the RBI Act. The mechanism of digital signature has been
proposed to address the issues of jurisdiction, authentication and origination.
Recognizing the importance of Venture Capital Funding, the Ministry of Information Technology has set up a National Venture Fund for the Software and IT Industry with a corpus of Rs. 100 crore. The main aim of the venture capital Fund is to provide Venture Capital to start up software professionals and small IT units. Nasscom (most important promoter of the IT/BPO industry) has been playing a crucial role in helping the IT industry achieve the IT and ITES vision and make India far ahead of other players in the field of IT and BPO.
Nasscom has helped the government implement almost all the original recommendations of the last Nasscom-McKinsey Report, 1999 concerning the capital markets, venture capitalists, SEBI and the Companies Act. Infrastructure – Improved infrastructure is another important factor which has helped India to achieve tremendous success in the field of IT/BPO. There has been tremendous growth and improvement in telecom, power and roads infrastructure in the last few years in India. The overall roads and highways infrastructure scenario in India has also witnessed major improvements over the last few years. We have now entered the arena of multi lane highways. Most of the cities and towns are connected and interlinked to each other. Major investments have gone into the development of highways, both on the side of the central and state Governments. Relevant telecom facilities are an important precondition for the success of the software and BPO industry. The Indian government has taken numerous steps to improve the telecom infrastructure in the country. The international bandwidth situation has improved dramatically over the last 3 years. The privatization of the telecom Industry has resulted not only in significant drop in rates but also better services. The telecom costs have dropped by about 85%. Similar changes have been observed in the power sector infrastructure as well. Power availability has also improved dramatically over the last few years. This has gone a long way in ensuring uninterrupted power supply to the IT/BPO destinations like Bangalore, Delhi, Chennai, Bombay, Pune and Calcutta. In addition to this state governments in India have undertaken reforms in the power sector to improve power supply to ITES companies.
Cost-effective – Cost effective man power is yet another important factor which makes India a hot spot of IT/BPO industry. With a vast pool of skilled human resources ready to work at lower wages in comparison to the European or American countries India is attracting business process outsourcing. In India, the manpower cost is approximately one-tenth of what it is overseas. For example, per agent cost in USA is approximately $40,000 while in India it is only $5,000. It is but natural that companies contract out their work to cost effective destinations like India. India produces about 100,000 engineers every year. These can be used in call centers for troubleshooting/tech support, as the salaries are dramatically lower than in Europe or the US. In such situations MNCs choose to outsource their business processes to cost effective India rather than offshoring to other costly destinations. Time Zone Difference – India has an 8-12 hour time zone difference with respect to the US and other developed markets. It is of great advantage in BPO operations, which offers reduced turnaround times, since processing services are performed at night hours in the developed countries. India is able to offer a 24x7 services and reduction in turnaround times by leveraging time zone differences. This difference in time zone is because of India's unique geographic location. When it is day in India, it is night in America and even as we go to bed, they rise and go to work. This time difference has been intelligently brought to their advantage by the call centre’s/BPO’s. Most of the Indian call centers servicing American customers have timings between 5:30 p.m. to 9:30 a.m. This time zone difference benefits not only the Americans but also the Indians. Not only does the time difference allow Indian companies/BPOs/Call centers to service American clients by working in the nights, it also helps in better utilization of their resources. The companies can utilize the same resources to serve other clients in India and abroad during the day. Thus the time zone difference also helps in sharing of resources which, in turn, saves costs and also earns call centers better revenues.
KEY PLAYERS : INDIAN BPO INDUSTRY
BPO (Business Process Outsourcing) has become the latest buzzword for young career aspirants in India. BPOs not only attract millions of young job seekers, they also open numerous options for the companies that want to outsource their work. Here, listed the top ten BPO firms that deliver the best in terms of both customer and employee satisfaction.
Genpact Founded in 1997, Genpact has emerged as the largest employer in the IT and BPO operations with more than 50,000 employees. Genpact helps clients improve the ways in which they do business by continuously improving their processes. The company achieved another milestone by acquiring Citi BPO for USD 630 million in 2007.Genpact has more than 30 operations centers in nine countries including India, China, United States and Philippines.
WNS Global ServicesWNS Global Services is a leader in business process outsourcing (BPO) operations. The company has proved itself in critical business processes, by catering to the needs of both Indian and foreign clients. WNS Global Services offers services in various fields such as travel, insurance, finance, healthcare, manufacturing and other professional services. It also deals with accounting, HR and payroll.The corporate office of WNS Global Solution is located in Mumbai. In addition to four Indian locations, the company has branches in the UK, USA, Sri Lanka and Romania.
GE India GE has been a leader in Indian BPO industry, although some other companies have emerged as front-runners in the last few years. GE is made up of six businesses, each of which has a separate division for operations. The six business operations of GE are GE Commercial Finance, GE Infrastructure, GE Healthcare, GE Money, GE Industrial and NBC Universal.
TCS BPO Although TCS (Tata Consultancy Services) began its operation as a software company and is considered as one of the top three IT companies in India, it excelled in BPO operations within a short period. TCS BPO is undoubtedly one of the leading BPO Companies in India. In 2006, TCS BPO was named as one of the world's top BPO providers by the International Association of Outsourcing Professionals.TCS BPO offers quality services in areas such as Finance & Accounting, Banking, HR Outsourcing, KPO, Insurance, Payroll, Healthcare, Telecom, Media, Travel and Entertainment. TCS operates from more than 41 countries and has more than 155 offices across the globe.
IBM Daksh Daksh is a big name when it comes to Indian BPO industry. Even before it was acquired by the IBM, Daksh always received awards and recognition for excellent employee and customer satisfaction. It also has two branches in Manila, Philippines.IBM Daksh offers solutions in Customer Relationship Management (CRM), financial services, industrial services, communication, travel, retail, hospitality and distribution industries. The company has both call centers and back office operations.
Accenture Accenture is a global management consulting, technology services and outsourcing company, which is committed to delivering the best when it comes to client and employee satisfaction. Accenture has a good track record in Indian BPO industry. It has received accolade both in India and abroad.Accenture offers services in Airline, Automotive, Banking, Finance, Communications, Energy, Electronics, Insurance, Media, Entertainment, Health, Public Services, Travel and many other areas. Accenture has offices and operations in more than 150 cities across the world.
Transworks Transworks BPO is a part of Aditya Birla Group in India. It is now known as Aditya Birla Minacs. Aditya Birla Minacs recently featured in the Leaders category of the 2008 Global Outsourcing 100. The list was released by the International Association of Outsourcing Professionals (IAOP). The company has offices in six countries including India, USA, Canada and Philippines. In India, its head office is located in Bangalore. It also has branches in Mumbai and Baroda. The key services offered by Trnasworks or Aditya Birla Minacs are knowledge process outsourcing and integrated marketing services that include sales, customer service, back office administration and channel support operations.
Wipro BPOWipro BPO, powered by its parent company Wipro Technologies has achieved significant growth over the past few years. After the acquisition of
Spectramind in 2002, Wipro BPO took a quantum jump in the BPO services. It operates from 9 different locations in the world including India and Eastern Europe. Wipro BPO offers BPO services in Banking, Insurance, Travel & Hospitality, Hi-Tech Manufacturing, Telecom, Healthcare, HR Services, Legal Process Outsourcing and Knowledge services. Wipro BPO is now called as Wipro Spectramind.
HCL BPO Like Wipro and TCS, HCL BPO is powered by the leading IT company HCL, which was founded by Shiv Nadar in 1976. HCL BPO is one of the early players in the BPO industry. It has more than 12,000 professionals working from India and Northern Ireland. HCL BPO Services is the largest in Northern Ireland.HCL BPO offers services in Telecom, Retail, Banking, Finance, Insurance, Manufacturing, Supply Chain Management, Accounting, Knowledge Process Outsourcing, Legal and Technical Support Services. It ranked third in Highest Satisfaction for Business Process Outsourcing by the Black Book of Outsourcing in 2007.
Convergys Convergys India is a part of Convergys Group, which is headquartered in Cincinnati, Ohio. It has 77 customer contact centers, three data centers and other facilities in the United States, Canada, Latin America, Europe, the Middle East and Asia. In India, Convergys has branches in Bangalore, Hyderabad, Mumbai, Delhi, Pune and Thane.Convergys is known for highvalue services and client satisfaction. It offers services in Communications, Financial Services, Healthcare, Government, Manufacturing, Retail, Insurance, Technology and Transportation. Convergys has both call centre and blended processes.
BPO COMPETITORS OF INDIA
From the last two decades Business Process Outsourcing is catering various industries like Retail, Insurance, Mortgage, Banking and Finance, Healthcare, Telecommunications, Technology, Travel and Hospitality and more. Companies are consolidating and standardizing operating processes by outsourcing the business process to third parties that offer economies and focused management expertise. In the present scenario many UK and USA based companies are resorting to Asian countries like India, China, Russia and Philippines to outsource their business processes. Offshore BPO is predicted to grow at a significant rate per year. BPO within Asia-Pacific market is expected to display a growth rate of about $14 billion by 2010. Business Process Outsourcing help companies achieve indomitable position in the service market and generate high profits by improving their business operations. Business Process Outsourcing is a tool that allows the companies to survive in the cut throat competition by retaining their customers and providing high rate of customer satisfaction. The advancements in technology and infrastructure have made it easier to carry out BPO services. Countries offering cost advantage by way of cheap labor along with skilled workforce are ideal destinations for BPO industry. Out of the U.S. $35-37 billion offshore BPO market in 2008, India remained the leading offshore destination with 35% market share. The Philippines, which is
barely 1/10th of India’s size, represented 15% of the offshore BPO market. The Philippines has emerged as a key destination for English-based work especially for the North American market. Growing at 46% annually since 2004, the US $6.8 billion Philippines’ offshore market today employs over 450,000 people. Most of the people employed are for voice-based services. By virtue of certain advantages India has been able to maintain its supremacy over its rivals in the BPO industry but there are a number of other countries, which can give India run for its money in Business Process Outsourcing. Some of the prominent competitors of BPO India are China, Philippines, Mexico, Canada, and Malaysia. Future of BPO in China: China is perhaps the biggest challenge in the future and the largest threat to India, and with the largest population and fastest economic growth, the Chinese have at least two advantages in the global outsourcing market -- manufacturing and IT . According to sources, the call centre industry in China is expected to grow by 22% this year and will reach to 28 billion dollar revenue by 2010. This industry will give employment to around 158,000 people including bank services and technical support staff for IT companies. Multinational companies are attracted to set up more BPO firms in China owing to high productivity and cost-effective human resources. China enjoys a great advantage in terms of large pool of people. China has certain advantages in offering low manpower costs compared to India, and being close to Japan, its BPO market is also likely to grow through the Japanese outsourcing route. As India currently offers no BPO services in Japan, China will capitalise on its proximity to itbut the Chinese have a great limitation, as they do not have enough English speaking graduates like India. The main disadvantages of China are lack of good quality record in software, whereas India has a better image as quality supplier. Future of BPO in Philippines: Business process outsourcing or BPO is an emerging industry in the Philippines. Since 1980s service sector has seen good growth in Philippines. Employment of labor force has seen a major shift from agriculture to service sector. Philippines enjoys advantages in being a former United States colony that helps in emulating US culture and language, well developed IT skill set, third largest English speaking nation in the world and large
scale technical training programme. Philippines has slowly but surely established itself as the second largest destination for non-voice business process outsourcing market. This, the country has been able to achieve on the back of successful offshore delivery of voice-based customer service support. However, even today, BPO delivery from the Philippines is no longer limited to voice-based services, and a number of companies are already leveraging the Philippines for delivery of a wide array of non-voice BPO functions. Philippines business process outsourcing (BPO) industry is going strong and it has been estimated that by the year 2010 the BPO industry revenues will be approximately US$12 billion. Also the industry will generate one billion jobs by 2010. Philippines BPOs are doing greatly in legal and medical transcription, finance, logistics and accounting. Future of BPO in Russia: In the present scenario many companies are banking upon Russia’s outsourcers wish to have a large number of BPO firms. Russian outsourcing is known for cost effective quality services which gives the clients all good reasons to hire Russian BPO firms. Russia is emerging as a skilled back office administration to the world’s leading corporations. Hundreds of companies are investing in Russia in outsourcing and this market is going to reach a billion dollars. Large foreign firms have realised that in Russia there are "fantastic programmers they cant find in the US or India," and are increasingly delegating projects to Russian companies. People know that a vibrant IT market is developing in Russia. And you have to be in Russia because its a very fast growing market. Intel has invested 700 million dollars (515 million euros) in Russia in the last 15 years, while aircraft construction giant Boeing and telecoms equipment firm Motorola have also set up centres there employing local engineers. Further Google and HP have also made their intensions clear by announcing their arrival in Russia. So far things are going perfectly in favour of the Russia thus making it a better place to invest for other players across the globe. FUTURE of BPO in Canada and Ireland – The biggest advantage that these English-speaking countries offer is their similarity to the US’s in terms of people and culture. They also have good infrastructure and low economic and political risks. Ireland has a labour force of
just 1.8 million and professionals are expensive ($23,000 per year against $2,5005,000 in India). Canada’s advantage is low real estate prices and low salaries compared to the US, but they are high compared to India. Vis-a-vis the US, clients can save up to 25% in Canada. Canadian villages are also well suited for 200-300people operations. In India, savings are higher but US firms feel reduced risk is worth the extra money. Canada is suited for complex businesses that require proximity to the US. It has superior employee retention rates and BPO experience.
Future of BPO in Brazil and Maxico – Mexico and Brazil have an edge because their time zones are similar to the US and they are also close to the US. Also, labour costs are low (around $1,300 per annum). But proficiency in English is poor and skill levels are very low. Thus, scalability is the major concern. They are, however, ideal for operations like document management that require proximity to the US. Brazil’s strengths include huge investments in IT and telecom and a large low-cost labour pool, which is cheaper than Mexico’s. But Mexico’s forte is Spanish language skills. US companies have saved 25-40% by outsourcing their work to Mexico. However, Mexico lacks technical and mathematical skills. But for lowcost, low-maintenance data-entry type of work, it is the best bet. Future of BPO in South Africa – South Africa is emerging as a hot BPO destination because it has a time zone compatible with Europe and a 17- million strong labour pool (compared to India’s 270 million). The government’s support to BPO activities and a robust Englishbased education system are attractive propositions for US firms to move their operations to this nation. Costs are about 25% lower than in Europe. But skills are not as easily available.
Hence India still has the leading edge in the BPO industry, but it should keep on improvising to maintain its stability. Therefore India should be on its guard to
maintain its position intact. If India has to maintain its supremacy in BPO and its software workforce, then BPO India has to learn Spanish, which is spoken in more than 24 countries. With India already stamping its superiority in the BPO sector with its knowledge of the English language, it now needs just one other language that will make the world its market, which is Spanish. Though countries like Australia, Canada and Ireland are the other players, they are not serious competitors to India due to a small population base. COUNTRY Philippines USP Understands the US market. Voice work. Low attrition. Canada, Ireland, Australia South Africa Understand the US; high-end skills. Time one similar to Europe; 25% cost savings; good for niche work. Technical Skills High Costs. LIMITATION More expensive then India. Small Talent Pool.
Russia , Ukraine
Poor infrastructure; corruption; language. No English speaking capability.
Czech Republic, Hungary Mexico
European language skills 30% cheaper than the US, Spanish speaking peoples
Small talent pool; high costs. Good only for low-end jobs.
Table : The World of BPO-source NASSCOM
India has been the leader in BPO services for a few years now. But, according to reports, this is going to change with countries like China and Philippines joining the race and offering BPO services at much cheaper prices. According to the research firm Gartner, India is likely to lose market share in offshore business process outsourcing (BPO), from 80% to about 55%. India, which was considered to be the hotspot for all BPO related activities, may soon lose its sheen to other developing countries like China, Philippines and Srilanka. India was one of the first countries to see the opportunity and start with BPO operations. Moreover, it also had the strategic advantages such as skilled manpower, linguistic capabilities, low labour cost, telecom connectivity etc… Right now, India leads the BPO business with a large market share. But all this is set to change soon as other countries are waking up to the potential of the BPO business and starting their own BPO firms. Experts forecast that India will remain one of the top 5 outsourcing destinations but will lose the power that it enjoys now.
There are many factors that have lead to this situation. Some of the main reasons are:
Low manpower cost: One of the main advantages India had over outsourcing countries was the manpower cost factor. With countries like China and Philippines jumping into the race, India is fast losing this advantage. These countries operate at low manpower costs and as such, offer very low prices to their customers. Infrastructure: With increasing business and change in client requirements, the need to update infrastructural facilities has increased. As of now, India does not have a long-term plan to improve infrastructure whereas other countries have put strategic thoughts to develop a well defined roadmap and to ensure that the infrastructure needed to house such BPO firms are in place. Moreover, India’s poor infrastructure adds to the business cost as Indian firms require a lot of redundancies such as power and telecom backups. Government policies: The Indian government tax policies such as taxes on ESOPS, rental space etc is making Indian companies less competitive and costlier when compared to the new players in the field. In countries like China, Philippines, Srilanka and South Africa governments are offering 10 to 15 year tax breaks and China even offers income-tax holiday to its BPO employees. Workforce quality: The lack of government interest in ensuring an employable workforce leaves a lot of loopholes that have to be filled by BPO companies through incurring costs on training, which again makes the Indian BPO firms more expensive than the other developing countries. The governments of countries like China and Philippines are ready to invest money to train their workforce and make them employable. Attrition: Problems like unusual working hours, stress, job insecurity etc have lead to high attrition rates in the Indian BPO industry. Moreover, more and more people now do not take a BPO career seriously. For most of the
youngsters today, BPOs are a just a place to earn money during their free time. As such, the industry is facing a major shortage of manpower. Such situations force the outsourcing companies to look for better pastures.
Apart from the points mentioned above, there are other problems such as time difference and distance from the outsourcing countries that India is facing. Most of the new ventures planned by other countries overcome these shortcomings and provide a less costly, reliable option to the outsourcers. Unless the Indian government does something soon to handle the situation, it won’t be long before we would have lost the position that we hold in the global BPO segment.
REASONS BEHIND JOINING BPO
Business process outsourcing, the most flourishing Indian industry sector has emerged as India’s most promising sector, and has been growing at a rate of 40-50 per cent since its inception. BPO is a very fast paced and a high momentum industry which attracts the youth towards it . Today India is fast changing, so is its youth. The past few years have seen a complete makeover in the urban youth and the environment they live in. The increase in the number of coffee houses, swanky malls, multiplexes or automobiles display the spending trend of the young Indians. And one of the main factors boosting it, is the growth of the BPO sector in India. The tremendous growth of Indian call centers in the last few years has resulted in considerable socio-economic and cultural developments in Indian society. Indian youth ranging from their lifestyle, personality, career, attitude, gender, and language to their whole identity. This has positively impacted the time, talent and skills of the Indian youth; no doubt, they are reaching their career milestones and financial goals much faster and earlier than before. Some of the reasons as why people prefer to join a BPO ➢ One can earn a quick buck and lots of it. ➢ Financial Independence : gateway to good pay packages. ➢ Education level doesn't matter : One can join BPO after 12th.
➢ No investment needed to upgrade you unlike many other professions. ➢ communication skills can be greatly improved. ➢ No technical qualification required but if you have then it would help you understand the technical part of process quickly. ➢ understanding the culture of different countries. ➢ Did not get a better job. ➢ Find nothing better to do. ➢ Good work environment- truly world class. ➢ Good Benefits . ➢ Flexibility of time . ➢ Attractive life style . Without doubt, no industry has created so many jobs and sustained so many people like the BPO industry. One cannot deny the fact that the BPO industry has benefited Indian youth.
WORK CULTURE OF BPO
The Call Center culture is an inevitable outcome of the unconventional working hours where time zone difference naturally exist between India and countries like America. The BPO culture has altered the way Indians have lived for years permeating their social and personal space. The call center is usually bustling at night when operations are in full swing thus forcing employees to follow a nocturnal lifestyle and activities appealing to the youth for its revolutionary style of functioning. A call center job necessitates that workers adopt the western culture so as to identify themselves with their customers leading to a gradual percolating of the western culture in the environment. The atmosphere in which the workforce effectively works to deliver high quality performance.
Energetic setting: BPOs have a vibrant environment. Generally the interiors are also done up in a way that it makes people feel nice and energetic. This
glamorous industry also involves a lot of hard work and specialized skills to deal with all kind of customers. 24X7 work environment: BPOs have a round the clock working culture and people work in day and night shifts. This is because International BPOs offer services to countries like US and UK that have different time zones. Perfect amalgamation: The work culture in quality BPOs is a blend of professionalism and friendliness. Humans are not treated like machines but are given equal opportunities of growth in every sphere of learning. BPOs create a friendly working atmosphere so that the employees don’t feel suffocated. Rejuvenation channels: Long working hours and pressure to meet deadlines and achieve targets takes its toll on the well being of the employees. Quality BPOs offer world class channels to de-stress employees and to motivate them. Entertaining events and parties are organized at regular intervals so that the employees are relieved and invigorated to take the challenges head on. World-class BPOs also have gym, sports and café facilities.
Pep up the energy levels: BPO employees work hard to meet deadlines and targets. Motivation is a great booster when it comes to delivering high end results. So to ensure that the team is motivated, team leads and managers keep the morale of the employees high through encouraging words. Good and outstanding work is always recognized and rewarded in the form of perks, incentives, gift certificates, etc. in the BPO sector. At no point in time the employees feel the dearth of guidance and warmth of encouraging words. Rich culture ties and exchange: People from every nook and corner of the world are lured by the state-of-the-art facilities and hefty pay packages. Apart from the culture shock there is a gold mine prospect of rubbing shoulders with people from different educational, professional and cultural backgrounds. Increase In knowledge – A lot of vendors provide the management with flexible as well as scalable services to meet the customers’ changing
requirements, along with supporting company acquisitions, consolidations, in addition to joint ventures.
SPOILSPORTS IN BPO’s INDUSTRY
BPOs have proved a grand success. Business process outsourcing, the most flourishing Indian industry sector has emerged as India’s most promising sector, and has been growing at a rate of 40-50 per cent since its inception. BPO is a very fast paced and a high momentum industry. BPO industry is expected to generate one million jobs by the year 2008. Taking advantage form the abundant skills and low cost benefits, large number of BPO companies have mushroomed in India in recent years, many of the well established IT companies have also started their BPO divisions. But, there is another side of the BPO picture too. The side that has already brought the BPO industry in limelight many times. This picture is concerned with the non viability of the BPO and the fact that the young generation of India is actually loosing out in the BPO. It is true that now day’s employees are not working for salary because they want to relaxation in job. Most youngsters do not like joining the business process outsourcing (BPO) due to stress and health issue. BPO employees are quitting BPO job’s to get rid of the stress and strain at work place.
Following are the key spoilsports that have their huge impact on the fastest growing industry : Stress: Growing stress levels of call center agents led us to delve deeper and find out the factors that play spoilsport in the otherwise rewarding BPO job. Employees are facing stress problem in BPO due to that their health is down. If customers are not getting comfort and the full relaxation in BPO companies then they quit the company. Long working hours: Any call center agent works for 12 hours on any given day with only three 15 minute breaks through the day. This becomes difficult to manage as the body and mind tires out after a point of time. Business process outsourcing organisations, commonly known as call centres – work when rest of the India sleeps! Most of the BPO organisations work according to the international (US and UK) timings, therefore most of the BPO employees work in might shifts starting anywhere from 10 p.m. to 2 a.m. and ending at 6 a.m. to 10 a.m. There is also a graveyard shift starting at 4 a.m. working in such shifts having odd timings have started showing hazardous results on the health of the Indian youth. Travel time: Most BPOs are set away from the bustle of cities and it takes more than an hour or two for cabs to reach their destination. Repetitive nature of work: A call center job gives little room for innovations and individual work. A day's work is defined for everyone in the same manner. The same script, same kind of calls and customers make the job monotonous and stressful on a day-to-day job.
Overtime: Although this is not one of the larger concerns, call center executive feel stressed by the factor; with 16% of the respondents admitting the same. Most companies adequately compensate for working overtime especially if one works on weekends.
Health issues: Factors like long night shifts, stress, pressure to perform on metrics, high call volumes and irate customers invariably take a toll on the health of the
BPO executive. Common ailments that emerge are insomnia, depression, visual and hearing problems, and digestive problems. An increasing number of BPO executives are seeking counseling from psychiatrists and psychologists today. Prolonged working in shifts of odd hour’s can have major implications on the physical and mental health of the employees. The physical strains like sleep disorders, depression, odd working shifts, learning foreign accents, constantly handling abusive calls and high stress levels are making the BPO employees more prone to hypertension and heart attacks. Depression is the most common problem faced by BPO employees. Frequent headaches, feeling of fatigue, sleeping disorders and frustration have become regular problems .
Pressure to perform on metrics: Efforts to attain the desired balance between the quantity and quality of calls remains a perennial challenge. The above factors are a sticky aspect of a career in a BPO. However, innovative HR policies aimed at relieving stress at all major BPO's have definitely initiated the process for a stress free work culture for the BPO work force.
AREA OF CONCERN IN BPO
Working in a BPO, many feel is a job that does not require much skill. Any body possessing a basic education, good communication skills is employable after some training. Companies do not mind taking in people who are middle aged, and homemakers. There is no sense of accomplishment among the employees. Financial desperation on the part of some people leads them to take up jobs in BPOs- People out of college join BPOs to earn money to finance their higher education, some as a way of improving their life styles. Some others join because they could not find anything else. In short, very few people take up employment in BPOs for the love of it. The tasks that BPOs perform are diverse: telemarketing, technical support service, customer support service, insurance processing, data entry and conversion services, bookkeeping and accounting and online researching, and form processing. The problem that this creates is that there can be no standardized training program suitable to all the BPOs that can be given to the prospective employees before they are actually absorbed into the company. High expectations from the outsourcing companies tend to de-motivate the workers. In many cases, the outsourcers think only of achieving targets.
They are obsessed with quality work, business continuity, time frame, security of information. However, satisfying them is not always possible. The expectations should be realistic taking into account the work ethics of the region of the service provider, as well as, its culture and polity.
Attrition in BPOs :- The single largest worry of the BPO industry is attrition. In the outsourcing context, ‘attrition' means a gradual reduction in the number of people working in a company due to retirement, resignation, or death. The rate of attrition in the BPO industry in India is currently nearly 50%. Attrition in individual firms varies from 15% in the larger firms to up to 40% in the smaller ones. Analysts believed that if this left unchecked, there would be a shortage of professionals. ATTRITION RATES (%) US - 42% Australia - 29% Europe - 24% India - 18% Global Average - 24%
Fig. Attrition rates at BPO in different countries. (Source-Times News New York)
➢ Control - By using BPO services many firms loosing managerial control, because it is not easy to manage outside service providers than managing one’s own staff working possibly in the same edifice.
Security – The main disadvantage of BPO or outsourcing is its security and secrecy. In case, if in a firm who operates in services like MT, bank accounts, then in these kind of circumstances firm must be very careful in selecting which services it wants to outsource and to which provider.
Top challenges faced by BPO Companies
The major challenges to the BPO companies in present scenario are as follows – 1. No clear strategy There are numerous good reasons to outsource, but the worst is not to have a reason. Some companies suffer with the “us too” complex. This arises when a competitor is successfully outsourcing, so it must be good for your company too. BPO should create added value for the company and shareholders by releasing resources from spending time on accounts payable, invoicing and general ledger processing to focus on strategic analysis, finance mission development and policy setting and approval. BPO can also add value by integrating different functions within your organisation that otherwise could not be cost-justified, and, at the same time, provide the necessary resources to maintain the integration. Some companies even take it a step further and partner up with the service provider to develop new tools and processes. The risk and rewards are then shared between then two, including revenue created from offering the tools and processes to other organisations. 2. Selecting the right service provider When evaluating a BPO service provider, the three key criteria to look for are: a proven track record, technical excellence and the ability to deliver improvement. When evaluating any potential service provider, these are some of the essential questions to ask: ○ Is the supplier aligned to the strategic goals of the business? ○ Does the supplier understand the business today and will they have the ability to in the future? ○ Is the supplier being innovative in solving long-term business issues? ○ Does the relationship add any value to core business operations? The most effective method of answering these questions is to talk to existing clients, preferably within the same industry as your organisation. Learn from their experience – identify the issues they encountered and their method of resolution. 3. Contract negotiation Service level agreements (SLAs) lie at the core of the BPO contract. These identify the service deliverables and expectations of your service provider. Good contracts will also describe the reporting methods for service levels measurement, how, when and the level of attainment required. This will include any potential penalties or benefits.
An important issue that is often missed from the contract is the termination or exit strategy. Legally, both parties should have an agreement for how to terminate the contract at any point in time, should it be necessary. Be aware that in contrast to traditional IT, outsourcing BPO SLAs are business-based, not IT-based. Therefore, you will need to focus on handling processes, business outcomes and people. 4. Creating a successful relationship On this point, traditional IT outsourcing and BPO are no different. It is essential that you have a good relationship with your service provider to achieve a successful outsourcing contract. IT service providers have recognised the importance of a strong cultural match. However, many BPO service providers do not yet appreciate the importance of this. It is imperative that the client and service provider trust each other. If there is no trust, there will be mistrust. This will create issues for each party. The relationship will become ineffectual, the service will suffer and communication will break down. Various other challenges are ➢ US economy slowing down - particularly the Banking and Insurance segments. ➢ Lack of Incentives from the Government - sunset cluase for STPI units. ➢ Failure to attract and retain top talent at all levels - Executive, Middle and Senior Management. ➢ Bad media publicity - always showing the ill affects of working. ➢ Failure by the Companies to project 'careers' instead of 'jobs'. ➢ Poor perception by the job seekers.
SWOT ANALYSIS OF BPO INDUSTRY
STRENGTHS • • • • Large number of talented graduates Affordable and quality education as compared to developed countries English language benefit Well-developed IT industry
WEAKNESS • • • • Scarce foreign language skills other than English. Lack of customer service culture Expensive and poor quality telecom infrastructure Failure to attract and retain top talent
Strong customer base of well known companies Powerful venture capital interest in investing in growth opportunity
at all levels. • • • Bad publicity. Cultural differences High attrition rates, therefore less no. of people with extensive call centre experience
OPPORTUNITIES • Horizontal and vertical expansion of existing customer base into new markets. Time zone difference between India and target markets, Increasing awareness of outsourcing services . • • • •
THREATS High Billing rates Political instability Government policies India's competitors in Eastern Europe, Latin America and the Asia Pacific regions offering cheap BPO services Increasing technology automation.
SWOT : Strengths, Weakness, Opportunities and Threats of the subject.
CHAPTER 3. BPO AND INDIAN ECONOMY
BPO AND INDIAN ECONOMY
BPO Role in India’s Economic Growth has been tremendous, especially in the last few years, when the demand for outsourcing work to India has been significant among western companies. The role played by BPOs in boosting India’s economy shows that the IT and ITeS sector have been contributing largely to the economic growth of India. The growth in the contribution of BPOs to Gross Domestic Product has shown a steady rise from 1.2% to 5.4%. It is hence evident that the BPO industry is making an impact on the Indian economy. BPOs are aiming at contributing towards bringing in more earnings to the country and IP creation. BPO Role in India’s economic growth is set towards making a significant impact in the time to come as well. The driving forces that account for the increase in foreign investments through the BPOs in India are: • Emphasis on quality services • Skilled sets and workers • Cost effectiveness • Quality products • English speaking manpower
These features of the Indian BPO industry attract long-term contracts and as a result, there are high earnings which in turn result in major contribution to economic growth. As a matter of fact, the Indian BPO industry is leading in the market and is improving in the area of training professionals in learning foreign languages and increasing the number of skilled workers. This will give India the ability to sustain its global leadership and probably generate export revenues of USD 10 billion by 2010. The setting up of more BPOs is also bringing in more job opportunities for the Indian youth. BPO role in India’s economic growth will even facilitate great maneuvering in the country’s balance of payments. BPO role in India’s economic growth is definitely at the growth stage but is all set for a major contribution to the Indian economy, especially if the government supports the sector in terms of financial growth, openness to trade, rural-urban migration, and education.
A recession is a decline in a country's gross domestic product (GDP) growth for two or more consecutive quarters of a year. A recession is also preceded by several quarters of slowing down. A recession normally takes place when consumers lose confidence in the growth of the economy and spend less. This leads to a decreased demand for goods and services, which in turn leads to a decrease in production, lay-offs and a sharp rise in unemployment. Investors spend less as they fear stocks values will fall and thus stock markets fall on negative sentiment. The defaults on sub-prime mortgages (home loan defaults) have led to a major crisis in the US. Sub-prime is a high risk debt offered to people with poor credit worthiness or unstable incomes. Major banks have landed in trouble after people could not pay back loans. The housing market soared on the back of easy availability of loans. The realty sector boomed but could not sustain the momentum for long, and it collapsed under the gargantuan weight of crippling loan defaults. Foreclosures spread like wildfire putting the US economy on shaky ground. This, coupled with rising oil prices at $100 a barrel, slowed down the growth of the economy. US economy is facing a downturn period. The economy that has been the driving force for the economies of other developing nations is in its slump time. The
calculations say that this downfall of US will affect the IT industries and other sectors of the most nations. The analysts are calculating the effect of US recession on Indian Economy and its various sectors. They are reckoning the effects of this downfall period on Indian Exports, IT developments, growth in Software sector and BPO sector . The fear of a recession looms over the United States. And as the cliche goes, whenever the US sneezes, the world catches a cold. This is evident from the way the Indian markets crashed taking a cue from a probable recession in the US and a global economic slowdown. Weakening of the American economy is bad news, not just for India, but for the rest of the world too. There is news that expose US call centers are not much involved in proactive customer service. The experts are foreseeing these factors as the opportunities for Indian BPO industry. They are advising that Indian BPO sector should place itself in the US BPO shoes to reinvent the services of the customers that otherwise use the US services. The BPO sector will keep on booming as it is an essential service. The fact that besides many promises, Indian IT industry is slowing down and the effects could be seen in its current policies. There have been shrinking absorption of labor and decline of many other services can not be argued. But the reports clarify that this will not be same for the BPO sector. The reports state that Indian BPO sector has the potential of reaching US $1.6 billion by 2008 and US $50 billion by 2012, with this recession continuing. This sector will add 2.5% to India’s GDP growth. It will provide employment to about two million people. But achieving all the success depends on the way BPO players will take the change. They have to remain focused to grab the opportunities that US recession has offered them. This growth factor is dedicated to the arising prospects in domestic sector. The BPO industry can turn to the evolving break in domestic market. (Source of Article : Rediffmail.com, Business) The current economic meltdown in the United States and other developed countries is likely to benefit the Indian BPO industry as it would compel more companies in these markets to look at outsourcing as a way to cut costs and enhance efficiencies.
Rupee impact and the challenges for BPO Industry
The sharp appreciation of the rupee in relation to the dollar and, to a lesser extent, the euro, the pound and the yen has naturally affected the booming software exports and the BPO industry. The biggest challenge is the appreciation of rupee against dollar. All the billings for BPO are done in dollar where as the expenditures are maintained in rupee. The outsourcing businesses operating in India are feeling the pinch in their profit margins due to appreciation of rupee as against the dollar. A one percent rise in the rupee against the dollar has around 75-80 basis points impact on the operating margins for BPO companies. While it is true that the INR has appreciated against the dollar to record levels over the past one year, and now hovers at INR 40 to a USD, the fact is: so have most other currencies, including the Euro, gained against the US dollar. Little googling reveals something not so startling. The INR may have gone up in comparison to the USD, but so have most others. Thus, effectively, the INR has maintained its level against most other currencies (that have let market forces determine the rate). Hence, the real issue is not that the INR is appreciating, but that the USD is depreciating .To track the Dollar that has been falling against all currencies .Thus to be quite honest, it certainly is not strengthening of the Rupee but rather the weakening of the Dollar.
The world adopted dollar as the reserve currency because of its ability to withstand any kind of onslaught.
The main reason behind falling of dollar against rupee and various other currencies is that’s because the US is running a historically high trade deficit (it imports more than what it exports). It’s simple — bigger the trade deficit faster will be the dollar’s decline.” The average US consumer has become a buyer instead of a seller. This acted as a double-whammy. While, on the one hand, the US wealth was getting transferred to other countries in the form of imports (when the US imports, exporting countries earn foreign exchange), financial speculation was slowly giving way to bubbles in the stock markets and the realty sector. There is rising concern over the steep appreciation in the rupee, was putting a strain on BPOs. the impact is more severe in the case of BPOs as most of their expenses are in rupee . The Information Technology (IT) and Business Process Outsourcing (BPO) companies in India felt the pinch as 70 percent of the payment by the clients was done in dollars resulting in losses for companies in this sector. In this connection NASSCOM president Kiran Karnik, said, "There will be no impact of the rupee appreciation on the top lines of companies. As far as profitability goes, the impact will be less on the bottom lines of big (top-tier IT companies) companies and for small IT companies, the impact will be big as they have little lever to safeguard their earnings due to rupee appreciation through hedging, moving more work onsite. The rupee’s strong performance is expected to force the pace of consolidation among these but a shift to lower cost destinations is also likely. On the positive side, marketing and other promotional costs will come down. The bigger companies, some of them with iconic status, have a special responsibility in continuing to boost productivity, innovate and improve on their already successful global delivery models. For the top companies, a rising rupee need not be a threat; it could spur a move towards greater innovation and efficiency. This time is the major sustainability test for BPO sector. At the concluding note, Indian BPO sector will continue to boom in the adverse conditions also. It will have the significant growth in coming years and will bring large revenues for Indian Economy. It will polish the shine that India is having in BPO sector.
CHAPTER 4. RESEARCH DESIGN
Title of the project : “To study and analysis of Indian BPO(Business Process Outsourcing) Industry and to promote the corporate Gifting culture in BPO’s with reference to company store. in”.
Statement of the problem : The Business process outsourcing, the most flourishing Indian industry sector has emerged as India’s most promising sector, and has been growing at a constant rate. Due to the extensive work pressure and stress-full work culture the employees sometimes get de-motivated. The company named “Hour Glass Essentials Pvt. Ltd.” has one of its vertical called Company Store.in basically a web store that deals with corporate gifting. The company wants to increase the awareness about the web stores and different gifting products portfolio as well as helping out the corporate to settle down their own web store for their employees. The present study has been undertaken to analyze the BPO Industry particular, conducted on behalf of “company store.in ”.
Objective of the study :
➢ To study and analysis of Indian BPO industry. ➢ Identifying the factors that have made India the #1 choice for BPO to locate in. ➢ Effect of recession/ slowdown on BPO sector. ➢ To generate the awareness/culture for corporate gifting. ➢ To develop strategies, loyalty programs for BPO’s workforce and to provide first hand information to the company.
Scope of the study : The marketing research in this context is concerned with one of its several functions, marketing research that deals with the study of BPO sector for analyzing the employees attitudes towards corporate gifts, that are used to appreciate them for their hard work and motivates them to repeat the same.
Sampling Plan : This study being expectation around 50 respondents ,basically employees those work for the top BPO’s located in Bangalore, the IT city using stratified sampling method.
Sources of data : Primary data is collected for the research. Questionnaire : A structured questionnaire is prepared for the data collection and the survey is conducted through the questionnaire in Electronic City, Bangalore. The questionnaire was filled by 50 respondents. It is the only primary source used in this study and based on the questionnaire only the study has been conducted.
This study involved a field work in electronic city, Bangalore in the form of administration of questionnaire, collection of responses and other related field activities.
Limitation of the study : Time is the major constrains. The study is restricted to the Electronic city, Bangalore only. The study is based on the assumptions that all the responses given are true. Sample size is small; hence the out come cannot be applicable to the universe. ➢ Respondent provides data from their own intuitions and perception, which may be rough estimates. ➢ Since this study is time specified, the study findings are valid only for this study only. ➢ ➢ ➢ ➢
CHAPTER 5. COMPONY PROFILE
CompanyStoreCompany Store is a logo merchandise company that blends creativity, technology and committed professionals, into an organization that supports the branding and marketing initiatives of our corporate customers. We provide our customers with the highest quality business solutions that further brand loyalty with their clients, prospects and employees. Our business operates consistent with our Core Values and in an environment where individuals are respected, encouraged and held accountable. State-of-the-art technology coupled with personalised service - this is the company store forte. Your requirements are interpreted in the context of budget, target and motivation and translated into the perfect gifting strategy evoking just the right reaction. Leading with insights from our in-house research and experience, it assist many of the world’s largest companies in meeting their most important business goals. It help the clients understand, enable and motivate their employees, customers and partners. With decade of experience in the Corporate Gifting business, CompanyStore now offers you a technology solution to setup your own online Corporate Gift Store. and to improve brand recognition and awareness. Company store programs ➢ Branded Merchandise ➢ Online Redemption Programs ➢ Pop-up Brand Store
Appreciation programs ➢ Intensive Programs ➢ Motivational Programs RnR Programs Custom designed programs
➢ Consumer Loyalty ➢ Consumer Promotion ➢ Birthday, Gift, Anniversary and Long Service Award Programs
Recruit and Refferal Programs
➢ Peer to Peer ➢ Manager to Employee ➢ Performance/Long Service ➢ Call Centre Programs ➢ Special Events/Trade Shows We believe appreciating people reveals talents, builds confidence, and encourages contribution. And the most influential way to appreciate people is to provide a fertile environment where they can grow.
VISION AND MISSIONThe vision is to create customer intimate relationships with the customers with whom we work, and to deploy our resources to accomplish customers unique needs with a passion to exceed to expectation. We desire not to be the biggest, but the best, in the eyes of our customers, employees and shareholders.
What CompanyStore do for you ?
It match merchandise with messages to make things happen-to motivate actions and behaviors that meet its clients' business and brand objectives to: ➢ Protect brand identity and trademarks ➢ Enhance employee engagement ➢ Strengthen distribution channel partnerships ➢ Leverage brand sponsorship investments ➢ Reduce costs ➢ Streamline procurement processes ➢ Foster team attitudes and group collaboration ➢ Reduce employee turnover ➢ Improve brand recognition and awareness ➢ Ensure employee safety ➢ Increase productivity ➢ Leverage technology investments ➢ Drive purchasing compliance ➢ Improve organizational communications
Gifting Clients, Rewarding Distributors, Employees’ Schemes, Promotional Schemes for enhancement of sales, each of these require Excellent Ideas, which should be perceived by the beneficiary as Important. An ideal corporate gift is one which the receiver would like to keep and cherish for a long time.
We help companies to appreciate people who do great work, because celebrating great work inspires people to invent, to create, to discover. And wgen people are inspired, companies grow. Product lines : Apparel Caps and Hats Watches and Timepieces Drinkware Luxury gifts Business gifts Bags, Packs and Totes Funky gifts Eco friendly merchandise (Go Green) Writing Instruments Fun and games Desk and Stationery
Clients company store work for !
METHODOLOGY FOLLOWED BY THE COMPONY
Given the range of challenges companystore is asked to tackle for their clients every day, there is no single approach that works best for every situation. But companystore bring a big-picture, insight-driven perspective. And when necessary, they have the people, skills and expertise to go far deeper than our competition. The common-sense methodology we bring to every challenge reflects this way of thinking. This is how we’ve earned the trust of some of the most successful companies in the world.
CHAPTER 6. CORPORATE GIFTING-Introduction
CORPORATE GIFT- INTRODUCTION
Corporate gifts are an important tool in the marketing communication mix. In the corporate world, gift giving can be a double-edge sword (Pachter, 1995). If used properly, they provide the company with a valuable means of strengthening relationships with its key customers and employees, creating goodwill, fostering new relationships and promoting the company’s business. A properly timed and appropriate gift is one of the best ways of conveying the important message that a relationship matters.
Verbal communication is soon forgotten but gifts with your company’s logo on them form a reminder of your company to the customers for maintaining long term relations and to the employees of the company too, to increase the sense of responsibility and attachment among them.
A corporate gift can be anything from stationary to an all-inclusive Caribbean holiday for two. The type of gifts used is limited only by the imagination. A gift is given as a corporate gesture in recognition of business conducted or as part of business to business promotion while incentives are products or schemes perceived to be of relatively high value and typically used to reward staff or long standing business customers. Companies that wish to purchase corporate gifts and incentives can choose from a seemingly endless range of items, which can be placed into three broad categories, based on the value of the item and purpose of the gift –
➢ Give-aways, generally low value, high volume, less personal items that are
used mainly to promote a company’s name.
➢ Standard gifts, which suit most occasions of gift giving and cover a range of
prices, but always achieve a higher perceived value that “give-away” and are presented in a more personal manner.
➢ Luxury gifts, that are high value, low volume items that address an
individual and carry prestige often based on strong brands.
The clear objectives that the company wants to achieve in gift giving include: expressing appreciation for customers, creating brand awareness or enhancing the company’s image, promoting new product or service, and motivating your own staff. Corporate gifts are a kind of business investment. Business gift giving builds
on the foundation of reciprocity theory, which says that giving can lead to a recipient’s perceived sense of obligation to return the favour.
One important objective to give a business gift is to keep the company’s name on people’s mind(make the brand visible) .If a gift is “corporate”, it implies that the company wants its name associated with gift and to use it as a permanent reminder to the recipient. A truly corporate gift should be given not to an individual but a company. In most cases a “corporate” gift is in fact a “personal” gift as the recipient is normally a person.
As the old adage says, it is not the gift -it’s the thought that counts. An inexpensive but meaningful gift will bear out a lavish but pointless one every time . Corporate gifts should always be chosen with care and sensitivity. A gift is a very personal thing but Corporate gifts, by definition, are impersonal.
Corporate gifts can have the personal touch .Today’s successful gifts tend to be personalised or have a personal touch; they are more creative and more memorable. people love to see their names in print, especially on something they use frequently.
WHY GIFTS ?
Every person has different reasons for working. The reasons for working are as individual as the person. But, we all work because we obtain something that we need from work. The something we obtain from work impacts our morale and motivation and the quality of our lives. Some people work for love; others work for personal fulfillment. Others like to accomplish goals and feel as if they are contributing to something larger than themselves, something important. Some people have personal missions they accomplish through meaningful work. Others truly love what they do or the clients they serve. Whatever your personal reasons for working, the bottom line, however, is that almost everyone works for money. Whatever you call it: compensation, salary, bonuses, benefits or remuneration, money pays the bills. At a time when employee loyalty is considered as a quality that is increasingly hard to find, firms are taking extra efforts to reward and recognize people who stay with them for long. There was a time when an employee would just be rewarded for a job well done. And organizations over time have realized that rewarding the employee and appreciating his/her work for a job well done helps boost one’s morale and helps them excel on their projects. However, with the changing times and mindset of India Inc., organizations have now realized that apart from boosting the morale of the employees, rewarding them could also help in gaining their loyalty which in turn can help in curbing the rising attrition. Incentives help create positive emotion in the workplace, which greatly influences commitment to a work task ➢ Recipients relive the special recognition and appreciate the organization that honored them
➢ Items are memorable and reinforce the relationship between the reward earner and the reward provider
Awards appeal to the employees' higher needs thus increasing the
aspirational and in turn motivational value. Always remember word of mouth is the best method of advertising. Companies do not have control over consumers, but they do have access to their own employees. And that’s why it becomes so important to keep them happy and never underestimate them at any point and should leverage them to create a positive impact of the company to the people at large.
CASH AND TANGIBLE AWARD’S
There are two ways of rewarding an individual. Some prefer cash rewards since the bottom line, however, is that almost everyone works for money while some prefer tangible rewards for their work appreciation as they last for longer period and has higher recall value. Cash rewards Purely an extrinsic motivator with little emotional involvement; does not provide lasting satisfaction and long-term performance stimulation. Creates expectations, leads to entitlement and consequently looses its motivating value. A rupee is a rupee; participant attaches no greater emotional or inspirational value to cash. Lacks emotional impact of tangible rewards; thus quickly spent and forgotten. No "trophy" value to be a constant reminder and continue to motivate. It is difficult to show off; thus limits the lasting impact of the reward. Difficult to target a particular behavior because of the lacking association with a particular achievement. Recipients often can't recall what they purchased with cash reward which further diminished its impact. Tangible rewards Carry a significant trophy value thus continue to reinforce the good performance and behaviors. Provide tangible symbol of achievement and serve as an encouragement to other employees. Reinforce the association with sponsor company and thus increase loyalty.
Provide guilt-free enjoyment of reward thus increase the motivating impact.
Both extrinsic and intrinsic motivators; provide strong emotional appeal to participants' personal wants and interests. Carry a higher perceived value because of the increased emotional attachment; therefore, stimulate performance better than cold cash.
Employees Gift Ideas –
Employees are considered as the real asset for the company. So it is important to motivate them from time to time and boost their morale. And the best way to do is by giving them gifts. Employee gifts are powerful tools that can improve productivity, decrease employee turnover, and encourage teamwork in the workplace. Big corporate giants spends a lot of money on employee motivating programs because they find that the benefits more than pay for themselves. Some of the gift ideas you can try out are you can gift your employee apparel like shirt or t-shirt with the company name and logo. You can gift them branded apparel with the company name. It is a gift they will really appreciate. You can gift them cash cheque according to their performance but better to gift them something else other than cash. You can go for apparel, electronics, gift sets or travel items, which are more valuable and more memorable than cash. Gifts like wristwatches with the company name engraved on it can also be given. Even wall clocks are also given as gifts. If some employee has shown very good performance than you can gift him or her a computer or a laptop. It will be a boosting for their morale. You can even send them on a trip to some place for relaxation. It will help them to increase their efficiency level. Other generic gift items you can opt for are pen set, office stationary items, brief cases, bags, wallets and ladies purse with office name and logo , diary, pen stand etc…. Among the other gift items and employer can gift are showpieces with office name and logo. Even according to occasions gifts are given to employer like during any festivals chocolate boxes, wine bottles, beer bottles, candies, cakes and cookies are given especially during Christmas. If somebody is getting married that time special gifts are given from the company side. Sometime for very good performance car are also given to employees. Special movie shows are also arranged for all the employees. Gifts in form of feast and party in good hotels are also arranged for the employees. For good performance some employees are send on a foreign trip. So there are various ways you can please your employees. “The gifts should be custom made there by giving the personal touch and making the employee feel like a part of the family. The company logo should be present but if the employees name is also present it adds to the gift.”
FUNCTIONING OF A WEB STORE
ATTRITION RATE AND CORPORATE GIFTING
At a time when employee loyalty is considered as a quality that is increasingly hard to find, firms are taking extra efforts to reward and recognize people who stay with them for long. There was a time when an employee would just be rewarded for a job well done. And organizations over time have realized that rewarding the employee and appreciating his/her work for a job well done helps boost one’s morale and helps them excel on their projects. However, with the changing times and mindset of India Inc., organizations have now realized that apart from boosting the morale of the employees, rewarding them could also help in gaining their loyalty which in turn can help in curbing the rising attrition. Since attrition rate among the employees is the main area of concern. So there arises the need of Retaining quality talent. That might not be possible by providing, monetary gains alone. It is quite evident that retention of quality is possible only in organizations where there is strong focus on individual development and growth opportunities. This is perhaps the primary expectation of many individuals. They invest careers in organizations were there is significant professional value appreciation over a period of time. Many firms have excellent reward and recognition policies to acknowledge the long tenure of the employee. Various rewards range from personalized gifts and gift vouchers to dinner at luxury hotels or family holiday packages depending on the experience with the firm. Experts agree that the most efficient strategy to retain quality talents in providing an environment which cares about its employees. It becomes important to strike a balance between fun and work while maintaining the competitive edge among teams. Small achievements matter a lot both to the individual and add towards the enhancement of the organization. Benefits have a great intangible value to demonstrate how caring the organization is. Rewarding a continued experience with an organization might make job hoppers to rethink and stay long. Prioritizing employee recognition can ensure a positive, productive, innovative organizational climate. Provide employee recognition to say “thank you” and to encourage more of the actions and thinking you believe will make your organization successful. People who feel appreciated are more positive about themselves and their ability to contribute.
CORPORATE GIFTING – FUTURE IN INDIA
Breaking into the competitive corporate gift industry is easier said than done! It is all about ideas for giving a great gift and winning over the people who work for you and whom you work for. No doubt, corporate gifting is a highly competitive and crowded field. Every body in India and around the world enjoys receiving a gift. In a vast country like India, where different festivals are celebrated with great enthusiasm and fervor, gifting plans need to be ever-evolving and all encompassing. They need to match the joy and spirit of even an important regional festival. This will largely depend on the location of any organization. There are so many ways in which captivating corporate gifts can be designed. It’s the spirit of the occasion and not the price tag that counts! This is where the research and knowledge factor comes into play. An understanding of factors such as budget constraints, timeliness of a gifting plan, correct choice of occasion, relevant theme for gifting is essential. The success of a corporate gifting business is not merely about the “art of selling’. It’s more to do with discovering the ‘joy of gifting’ them. In today’s tough times, when loyalty and commitment can be a bit too much to ask for, owing to lack of hazy business prospects; appreciating the employees by gift is a good choice. Giving impressive and stylish gifts create a favorable impression. These can create awareness, build goodwill or communicate a message. These prime benefits of gifting gave rise to the trend of corporate gifting in India. The Indian gift market is growing vigorously. The trend of gifting is an age old tradition but earlier gifts were restricted to sweets and chocolates. Today, the market if flooded with multitude of gift articles. Companies use these gifts articles as a tool for advertising and promoting their business. Corporate India has beaten the corporate gift market with an estimate of Rs 100 crore. It has become one of the dynamic industries that contribute a major share to the country’s economy. The future of Indian corporate world is shinning bright and the trend of corporate gifting is expected to beat the western market in the coming years. The main aim of corporate gifting in India, is brand recognition, brand building and brand performance. If you want to strengthen your customer /employee base then corporate gifts are the best solution.
6 Important Keys to Corporate Gifting Success
It is always best to give a gift that is personalized, but not too personal as it may create a misunderstanding. Occasions : Send a gift on an unexpected occasion. Key Dates : Identify the key dates of your clients. For example, send gifts to your clients on their birthdays, anniversaries or some important and special days. Image Building : Putting a logo on the gift is very important but it should be done in a scuttle manner making the gift more presentable. Corporate gifting is a great way to say thank you and also to promote business, products or services, to show respect, to express an apology, over all it helps to enhance companies image and reputation . Right Choice : Choose an appropriate gift that suits the recipient’s taste and preferences and not yours. Small Note : a personal note or a card to accompany the corporate gift. Hand written notes are much preferred.
CHAPTER 7. DATA ANALYSIS & INTERPRETATION
DATA ANALYSISAND INTERPRETATION Sample taken = 50 Finding 1.
Preference as reward and recognition – ➢ Cash. ➢ Tangible Goods. Table 1.
Type of Reward Cash Tangible Goods Graph 1.
Number of Respondents 34 16
Interpretation.From the above table and graph shown it is inferred that among the group of respondents, more than 70 % preferred cash as an mode of rewarding employees in comparison to any tangible goods being offered to them.
Preference among the tangible goods ➢ Customized Goods. ➢ Off-the-shelf Goods. Table 2. Type of Tangible Rewards Customized Off-the-shelf Number of Respondents 41 9
Interpretation – From the above table and graph shown it is easily inferred that the customized products are preferred among the set of respondents as compared to off-the-shelf products as an reward and recognition.
Importance of featuring company’s logo/Name in which individual is working
➢ ➢ ➢
Essential. Quiet Important. Not Important.
Table 3. Logo /Name of the organization Essential Quiet Important Not Important Graph 3. Number of respondents 35 12 3
IterpretationAround 70 % respondents preferred company’s Logo/Name to be featured on the gifts. 24% gives importance to featuring it but not necessary. 6% respondents doesn’t give any importance at all to feature company’s name and logo.
What types of goods do you tend to look for as a gift ? ➢ A mixture of gifts to suit the different needs. ➢ Low Value . ➢ High Value.
Table 4. Type of Goods Mixture of gifts Low valued High Valued Graph 4. Number of respondents 42 8 % of respondents 84% 16%
From the above interpreted graph and table it is clearly shown that the mixture of goods that suits the different needs of employees is preferred most rather than high valued gifts and low value Items. 84 % respondents favors the gifts that suits different needs. ➢ 16 % go with high value gifts. ➢ No respondents favored low valued gifts.
What is the key role of gifts and incentives ? ➢ Enhancing the company image. ➢ Engender goodwill. ➢ Reate loyalty. ➢ To cement existing business client/employee relation. ➢ Increase brand awareness. Table 5. Role of gifts and Incentives Enhancing company’s image Engender goodwill Create loyalty Cement existing relationship Increase brand awareness 9 7 10 24 Number of respondents
Interpretation – It is clear from the above table and graph shown that the major role of gifts and incentive is to create brand awareness.
Finding 6. Do you feel that corporate gifts and incentives achieve their purpose
and objectives ? ➢ Always ➢ Sometimes ➢ Not very often.
Table 6. Purpose and objective’s Always Sometimes Not very often Graph 6. Number of respondents 15 24 11 % respondents 30% 48% 22%
Interpretation – From the above table and graph shown, it is interpreted that around 30 % respondents think that rewarding fulfills its objective. Majority of respondents are in state of confusion, whether objective of rewarding are achieved or not.
FINDING 7 . What do you think the main reason behind recession in economy?
➢ Due to US political backlash. ➢ Declining in dollors in comparison to rupee ➢ Credit Crunch.
TABLE 7. OPTIONS Due to US political backlash Declining in dollars in comparison to rupee defaults on sub-prime mortgages(Credit crunch) Number of Respondents 8 19 23 %percentage 16% 38% 46%
Inference :- From the above table it is clear that 38% of BPO respondents say that the main reason behind recession in economy is due to declining in dollars in comparison to rupee and 16% of the respondents say that due to political backlash and the majority i.e. 46% respondents say it is due to defaults on sub-prime mortgages(Credit crunch). So from the analysis it is identified that the recession in economy is due to recent credit crunch.
FINDING 8. Why the tax rate is increasing rapidly?
➢ ➢ ➢
Due to inflation. Due to economy boom . Due to government official .
TABLE 8. Option Due to Inflation Due to economy boom Due to government official GRAPH 8. No. of Respondents 26 15 9 % Percentage 52% 30% 18%
Inference :- As many as 52% of the respondents say that due to inflation the tax rate is increasing rapidly, 30% say due to economy boon, 18% say that it is due to government officials. So it is identified that most of the respondents say due to inflation the tax rate in increasing.
FINDING 9. what attracts the most to the youth to join BPO ?
➢ ➢ ➢ ➢
Financial Independence . Flexibility of Timings . Attractive lifestyle and culture . Education level doesn’t matter .
Option Financial Independence Flexibility of Timings Attractive lifestyle and culture Education level doesn’t matter GRAPH 9.
No. of Respondents 24 4 14 8
% Percentage 48% 8% 28% 16%
INFERENCE :From the above table it is clear that 48% of the BPO respondents say that the reason behind joining BPO’s is because of financial independency. They need not to dependent on someone for their expenditure’s, 28% of them say it is due to attractive lifestyle and the culture practiced ,16% of them say it is because for joining the BPO’s education level doesn’t matter at all, one can join BPO just after 12th and 8% says that its flexible timing that attracts them most to join BPO. So it is identified that most of the respondents say it is due to salary i.e. Financial Independence.
Recommendations for India's BPO industry :-
1.) A rebranding exercise India should no longer be presented as a cost-effective destination alone, but one that is driven by skills and quality. The industry is however, still in its nascent stages of consolidation and needs to rebrand itself in terms of value addition, competition and innovation. 2.) A conscious effort towards sound infrastructure Public and private investment in infrastructure with all concerned bodies adopting a customised approach to meeting the needs of the BPO industry. 3.) Setting the benchmark for information security Public and private partnerships need to be developed in strengthening the courts understanding of security issues. In addition, a robust and effective mechanism needs to be implemented for information sharing among industry, government and other interested parties. Timely dispensation of justice, including concrete alternative dispute resolution mechanism is also an imperative.
Industry and the government must work together to make legally viable standards of due diligence. 4.) Staying on top of technology India's scientific and research establishments should be encouraged to devote greater attention to the new class of technology that is emerging to enable secure and increase efficiency of remotely delivered services. Private investment should be encouraged in development and commercialisation of technology. 5.) Availability of risk capital and flexibility in taxation Credit institutions need to develop customised norms for the BPO industry. The availability of risk capital needs to be enhanced in early stage ventures. Third party hosted infrastructure BPO companies should be eligible to favourable tax treatment afforded to the infrastructure sector. 6.) Raising the bar for education system Industry in association with management schools should develop BPO specific graduate level programmes for mid-management and modify curriculum and the quality of instruction in entry-level educational institutions. Technical institutions should develop competency around the specialised technology required for the BPO industry. Recommendations regarding corporate gifting :In spite of more high-end processes being outsourced to India and security issues being addressed, India's 'sunshine industry' has been going through rough waters. It has been facing daunting challenges like attrition as high as 20-80 per cent and an imbalance in the demand and supply of skilled and talented workforce. There has been started the corporate gifting culture and its gaining importance in appreciating employees as well as clients for their work which motivates them towards better results and increased efficiency. All of the business gifts range can be engraved with your corporate message or promotional image allowing you to really create a special corporate gift which will help your company to stand out. There is no single gift that will serve the purpose across the line. Hence, right like all other corporate activities are strategised and planned even ’’ Corporate gifts’’ should be well planned. I think that it is crucial to send gifts to your employees
and important clients just as a small token to show them that you care and you appreciate them. It is very clear from the research, that Tangible gifts i.e. something that is of use to them on a day to day basis effects the most since, every time they take it out they will remember that you gave that to them. Decide on the budget ( the amount you want to spend on the gift) ,the relevance of occasion and the kind of relationship ( Whether a Business prospect,a senior employee ,Boss , colleague , a Business visitor,whether a Non-Indian ( nationality ) or is it a relative of direct business accomplice). Office related things that are mostly given to the office going corporate. So though expensive I think all good companies have to resort to it. Try to be creative in your gifts . In nutshell - Have a separate gifting policy. Gifts are not the end :Gifts are given to make the receiver feel ’made my day’ kind of good feeling. The longer the gift remains in the other party’s often short-term memory the better for your business. But the Gifts themselves are not the end in themselves when it comes to building lasting business relationships. It is almost like dating a girl. One need to often take them out for dinner, entertain them in five star hotels & your house. Build a personal rapport with them etc. etc. But gifts are a decent way to start with like a red rose on valentines day.
➢ Google.com ➢ Bpoindia.org ➢ go4bpo.com ➢ Indianbposolutions.com ➢ Business Today ➢ Daily Newspapers- TOI, HT, DH.
I am a student of International School of Business and Research undertaking “an research study on use of corporate gifting culture in BPO/IT Industry”. This exercise is a part of our curriculum. I would be obliged if you could provide me with some of your valuable time to answer a few question’ss. Name - ………………………………………….. Organization - …………………………………… Designation - …………………………………….. Email-Id - ………………………………………… Contact No.- ………………………………………
( 1.) What do you think is the main reason behind outsourcing the processes ?
a) Cost Cutting [ ] b.) Improving efficiency and productivity [ ] , c.) Tofocus core competencies [ ] d.) Outside expertise [ ].
( 2.) What do you think is the main reason behind India being the #1 BPO destination ?
a) Pool of human resources [ ] b.) English speaking peoples [ ] c.) Infrastructure [ ] d.) Cost effectiveness [ ]
( 3.) Who among these countries is the biggest threat to Indian BPO Industry ?
a) Phillippines[ ] c.) Russia [ ]
b.) China [ ] d.) Russia [ ]
( 4.) what attracts the most to the youth to join BPO ?
a) Financial Independence [ ] c.) Attractive lifestyle and culture [ ]
b.) Flexibility of Timings [ ] d.) Education level doesn’t matter [ ]
( 5.) What do you think the main reason behind recession in economy?
a) Due to US political backlash [
b) Declining in dollars in comparison to rupee [
c) defaults on sub-prime mortgages(Credit crunch)[
( 6.) Why the tax rate is increasing rapidly?
a) Due to inflation [
] b) Due to economy boom [
c) Due to government official [
( 7.) What do you prefer as reward and recognition –
a.) Cash [
b) Tangible Goods [
( 8.) What do you prefer –
a.) Customized [
b) Off-the-shelf [ ]
( 9.) How important is it that gifts feature your company’s logo/Name ?
sa.) Essential [
b) Quite Important [ ] c.) Not Important [ ]
( 10.) What type of goods do you tend to look for as a gift ?
a.)Amixture of gifts to suit the different needs.[
b) Low Value
c) Due to government official [
( 11.) What is the key role of Gifts and Incentives ? (Select One)
a) b) c) d) e)
Enhancing the company Image. [ ] Engender Goodwill. [ ] Create loyalty. [ ] To cement existing business client/employee relationship. [ ] Increase brand awareness. [ ]
(12.) Do you feel that corporate gifts and incentives achieve their purpose/objective ?
a) Always [ ]
b.) Sometimes [ ]
c.) Not very often [ ]
Thank You again for your time and sharing valuable information, experiences and views.