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To Study and Analysis of Indian BPO Industry and To Promote Corporate Gifts in BPO S
To Study and Analysis of Indian BPO Industry and To Promote Corporate Gifts in BPO S
BANGALORE
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.
Syndicate House
Manipal
1
CHAPTER 1.
INTRODUCTION
INTRODUCTION
2
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.
3
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.
4
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.
5
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.
6
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, near-
shoring and offshoring, BPO operations are also conducted through the following
three business models :
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.
7
Number of Processes Transactional Niche Comprehensive
Number of processes Transactions only for 2-4 Process 10 + Process in a
1 process function.
Invest in client assets No, migrate Yes- but modest dollars Yes-significant
everything to their and personnel take on. dollars and
system employee take on.
Accountability For the transaction For Process outcomes For cost savings.
processing
Risk Holder 90% client, 10% 50% client, 50% 30% client, 70%
provider provider provider
8
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 .
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DISADVANTAGES –
10
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.
11
3. Telemarketing Services
5. Insurance Processing
Service Example:
12
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.
Service Example:
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8. Book Keeping and Accounting Services
Service Example:
General Ledger
Accounts Receivables and Accounts Payable
Financial Statements
Bank Reconciliation
Assets / Equipment Ledgers etc.
Service Example:
Service Example:
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.
14
CHAPTER 2.
INDIAN BPO
INDUSTRY
INTRODUCTION
15
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.
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…
16
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.
17
If we compare India’s advantage over US in terms of cost involved , India stands a
leap ahead from US in cost benefits.
20000
18000
16000
14000
12000
6000
4000
2000
0
2003-04 2004-05 2005-06 2006-07
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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
offshoring model 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 are-
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.
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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.
20
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 people but 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.
21
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.
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.
22
Infrastructure –
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.
23
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.
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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.
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.
25
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.
26
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 BPO-
Wipro 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.
27
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 high-
value 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.
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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.
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.
29
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.
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.
Canada is suited for complex businesses that require proximity to the US. It has
superior employee retention rates and BPO experience.
31
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 low-
cost, low-maintenance data-entry type of work, it is the best bet.
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 English-
based 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.
32
COUNTRY USP LIMITATION
Mexico 30% cheaper than the US, Good only for low-end
Spanish speaking peoples jobs.
33
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.
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.
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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.
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.
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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.
37
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.
38
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.
39
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.
40
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.
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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.
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.
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ATTRITION RATES (%)
US - 42%
Australia - 29%
Europe - 24%
India - 18%
Global Average - 24%
ATTRITION RATES
45%
40%
35%
30%
25%
15%
10%
5%
0%
US AUSTRALIA EUROPE INDIA GLOBAL
Fig. Attrition rates at BPO in different countries. (Source-Times News New York)
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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.
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:
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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.
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SWOT ANALYSIS OF BPO INDUSTRY
STRENGTHS WEAKNESS
OPPORTUNITIES THREATS
46
CHAPTER 3.
BPO AND INDIAN
ECONOMY
INTRODUCTION
47
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:
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.
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RECESSION /SLOW-DOWN
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.
49
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.
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.
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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,
51
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.
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.
52
CHAPTER 4.
RESEARCH DESIGN
INTRODUCTION
53
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”.
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 ”.
54
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.
55
RESEARCH METHODOLOGY
Sampling Plan :
Sources of data :
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.
Fieldwork :
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.
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Limitation of the study :
57
CHAPTER 5.
COMPONY PROFILE
INTRODUCTION
58
COMPONY PROFILE
CompanyStore -
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.
Branded Merchandise
Online Redemption Programs
Pop-up Brand Store
Appreciation programs
Intensive Programs
Motivational Programs
RnR Programs
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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
The 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.
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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:
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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
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Clients company store work for !
63
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.
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CHAPTER 6.
CORPORATE
GIFTING-
Introduction
INTRODUCTION
65
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.
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
66
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.
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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.
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.
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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.
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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.
Purely an extrinsic motivator with little Carry a significant trophy value thus
emotional involvement; does not provide continue to reinforce the good
lasting satisfaction and long-term performance and behaviors.
performance stimulation.
Creates expectations, leads to entitlement Provide tangible symbol of achievement
and consequently looses its motivating and serve as an encouragement to other
value. employees.
A rupee is a rupee; participant attaches no Reinforce the association with sponsor
greater emotional or inspirational value to company and thus increase loyalty.
cash. Lacks emotional impact of tangible
rewards; thus quickly spent and forgotten.
No "trophy" value to be a constant Provide guilt-free enjoyment of reward
reminder and continue to motivate. It is thus increase the motivating impact.
difficult to show off; thus limits the
lasting impact of the reward.
Difficult to target a particular behavior Both extrinsic and intrinsic motivators;
because of the lacking association with a provide strong emotional appeal to
particular achievement. participants' personal wants and interests.
Recipients often can't recall what they Carry a higher perceived value because of
purchased with cash reward which further the increased emotional attachment;
diminished its impact. therefore, stimulate performance better
than cold cash.
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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.”
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FUNCTIONING OF A WEB STORE
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ATTRITION RATE AND CORPORATE GIFTING
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.
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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.
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.
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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.
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.
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CHAPTER 7.
DATA ANALYSIS
&
INTERPRETATION
INTRODUCTION
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DATA ANALYSIS AND INTERPRETATION
Sample taken = 50
Finding 1.
Preference as reward and recognition –
Cash.
Tangible Goods.
Table 1.
Graph 1.
Sample Size=50
CASH
TANGIBLE
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.
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Finding 2.
Preference among the tangible goods -
Customized Goods.
Off-the-shelf Goods.
Table 2.
Graph 2.
Sample Size= 50
Customized
Off-the-shelf
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.
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Finding 3.
Importance of featuring company’s logo/Name in which individual is working
Essential.
Quiet Important.
Not Important.
Table 3.
Essential
Quiet Important
Not Important
Iterpretation-
6% respondents doesn’t give any importance at all to feature company’s name and
logo.
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Finding 4.
What types of goods do you tend to look for as a gift ?
Table 4.
Graph 4.
Sample Size= 50
High Value
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Interpretation –
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.
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Finding 5.
What is the key role of gifts and incentives ?
Table 5.
Graph 5.
25
20
15
0
Enhancing Engender Create loyalty Cement Brand aware
company's goowill existing
image relationship
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Interpretation – It is clear from the above table and graph shown that the major
role of gifts and incentive is to create brand awareness.
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Finding 6. Do you feel that corporate gifts and incentives achieve their purpose
and objectives ?
Always
Sometimes
Not very often.
Table 6.
25
20
Always, 30%
15
Sometimes,
Sample Size=50
10 48%
Not Ver often,
5 22%
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Interpretation –
From the above table and graph shown, it is interpreted that around 30 %
respondents think that rewarding fulfills its objective.
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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.
GRAPH 7.
Declining of dollars in
comparison to rupee
Credit crunch
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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.
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FINDING 8. Why the tax rate is increasing rapidly?
Due to inflation.
Due to economy boom .
Due to government official .
TABLE 8.
GRAPH 8.
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.
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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 .
TABLE 9.
GRAPH 9.
Flexibility of timings, 8%
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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.
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RECOMMENDATION’s
Public and private investment in infrastructure with all concerned bodies adopting
a customised approach to meeting the needs of the BPO industry.
Industry and the government must work together to make legally viable standards
of due diligence.
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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.
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.
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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.
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.
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BIBLIOGRAPHY
Google.com
Bpoindia.org
go4bpo.com
Indianbposolutions.com
Business Today
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Questionnaire
Dear Sir/Madam,
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 - …………………………………………
( 1.) What do you think is the main reason behind outsourcing the processes ?
( 2.) What do you think is the main reason behind India being the #1 BPO destination ?
( 3.) Who among these countries is the biggest threat to Indian BPO Industry ?
95
( 4.) what attracts the most to the youth to join BPO ?
c.) Attractive lifestyle and culture [ ] d.) Education level doesn’t matter [ ]
( 5.) What do you think the main reason behind recession in economy?
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( 8.) What do you prefer –
( 11.) What is the key role of Gifts and Incentives ? (Select One)
(12.) Do you feel that corporate gifts and incentives achieve their purpose/objective ?
Thank You again for your time and sharing valuable information, experiences and views.
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