Professional Documents
Culture Documents
Submitted by
Vivek Saha
Roll no. :
Registration No.:
Supervised By
February, 2013
1
This is my proud privilege to express my deepest sense of gratitude and
ineptness to my Supervisor Professor Basudeb Sahukhan, Department of
commerce, Acharya Girish Chandra College, Kolkata-700003.
Words perhaps would fail to express the gratitude I owe to him. It would have
been impossible for me to complete the project work without his constant and
inspiring guidance and valuable suggestion at every stage of the project.
I am also indebted to all other teachers of the same department for their
constant support, inspiration and suggestions.
I express my gratitude to my parents, friends for their help and inspiration to
complete the project.
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This project is based on ―BPO INDUSTRY IN INDIA‖. Business Process
Outsourcing is the delegation of one or more of the business processes to an
external provider, which in turn owns, manages and controls the selected
processes based on some specific standards. It was started in India in early 1980’s
by the British Airways who set-up their captive unit in Delhi.
BPO in India starts with low-end data entry processes, but now it move up the
value chain and deals in core business processes also. Both voice and non-voice
BPO Industry exists in India. Various types of services are performed, call
centers being the attraction today for the youth.
BPO operates through three types of business models viz. - Transactional, Niche
and Comprehensive. Finance and Accounting has also set its significant place in
BPO pie.
In 2008 BPO industry generates USD 12.8 Bn revenue, out of which exports
revenue was USD 10.9Bn. It will achieve USD 14.8 Bn by the end of 2009
(expected) and is expected to achieve USD 60Bn by 2012 and USD 225 Bn by the
end of 2020.
Cost competitiveness and talented pool of human resources are the key drivers in
the growth of BPO industry, but still some factors such as underdeveloped
infrastructure and competition from others low-cost countries are providing
challenge to the Indian industry, which needs to be addressed carefully by the
cooperation of government, NASSCOM and industry it self.
Still, India is shining in the BPO landscape and is the most attractive destination.
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1. Introduction (7-8)
. Definition 7
. Objectives 8
2. Evolution (9-10)
3. Sizing Of BPO In India (11-16)
4. Segments In BPO (16-22)
. Voice & Non-Voice 18-21
. Horizontal & Vertical 21-22
5. Steps Followed While Outsourcing. (22-23)
Annexure-1 42
Annexure-2 43
4
Sr.No Pg. No.
FIGURES
1. Definition Of BPO. 7.
2. History Of BPO In India. 9.
3. Value Of Chain Of BPO In India. 10.
4. Growth Of BPO In Terms Of Exports. 11.
5. Growth In Domestic BPO Revenue. 12.
6. Total BPO Growth in Terms Of Revenue. 13.
7. BPO & Employment. 14.
8. Size Of BPO Global Market. 15.
9. Global BPO Market Share. 16.
10. Classification Of Voice & Non-Voice BPO. 17.
11. Horizontal & Vertical BPO. 21.
12. Vertical Segments In BPO. 22.
13. Steps To Be Followed While Outsourcing. 23.
14. Financial BPO Process Being Outsourced. 26.
15. Top 10 BPO Companies. 32.
16. SWOT Analysis. 36.
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Sr.No. Pg. No.0.
TABLES
1. BPO Growth In Export. 11.
2. BPO Growth In Domestic Market. 12.
3. Overall (Export & Domestic) Growth. 13.
4. Employment Generated By BPO. 14.
5. Global BPO Market. 15.
6. Major Players In BPO Finance 18.
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1. INTRODUCTION TO BPO
DEFINITION OF BPO
OUTSOURCING: -
An organization entering into contract with another organization to operate and
manage one or more of its business processes
BASED ON
BASED ON
VOICE
LOCATION
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BUSINESS PROCESS OUTSOURCING: -
It is the delegation of one or more of IT intensive business processes to an
external provider, which in turn owns, manages, and administers the selected
processes based on defined and measurable performance criteria.
BPO as per the work performed can be classified as VOICE BASED, which
includes customer related services such as technical support, marketing etc. and
NON-VOICE, which includes internal business operations. And as per the
location involved it can be classified as:
OBJECTIVES OF BPO:
Traditionally, the main objective of companies outsourcing their business
processes to India was the want of low cost. But now-a-days, companies that
offshore their business processes to India are no longer looking at cost reduction
alone. They typically want to achieve:
1) Process improvement and efficiency - faster turnaround and greater
productivity
2 ) C o s t s a v i n g s .
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2. VALUE CHAIN OF BPO IN INDIA:
Value chain is a chain describing the value of business processes being outsourced to
India. Value can be explained as the importance of business processes to the firm
outsourcing its business operations. India is moving up in the value-chain. At the
beginning only low end data entry processes were outsourced to India. With the
passage of time trend goes on changing. From low value data entry processes chain
moves up to core processes being outsourced now-a-days. It started with:
MID-1990’s- DATA ENTRY PROCESSES: Data entry simply includes entry of data
from papers, books or any hard copy format to computer aided soft copy.
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Fig. 4 –GROWTH OF BPO IN TERMS OF EXPORTs
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The above figure clearly shows that exports in the BPO market are increasing at
the fluctuating rate. In 2003 it was USD 2.6 billion. Then it increased to USD 3.1
billion in 2004.And in the financial year 2008 it was USD 10.9 billion. It is
expected to reach at USD 12.8 billion by the end of 2009. Figure indicates that it
grows almost at the rate of 50% from 2003 to 2006. After that it grows almost at
the rate of 20%-30%.
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The above figure shows the trend of growth in domestic revenues of Indian BPO
industry. It shows that onshore component is less than offshore component. In 2003
revenue of BPO from domestic industry was USD 0.2 Billion. It increased to USD 0.3
Billion in 2004. Then in 2008 it was USD1.6Billion and is expected to reach USD 1.9
Billion at the end of 2009. It is growing at a slow pace than export component of BPO
market.
As shown by the figure overall BPO grow steadily at the rate of almost 28% in
2005 total BPO industry was USD 12.5 Billion while it is expected to reach USD
Billion in 2009.
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So the greatest pool of graduates is moving towards the BPO industry thereby
decreasing the unemployment and developing the economy by utilizing the
available pool of talent.
Global BPO market is also growing at the rapid pace. As shown by the following
table in 2012 it was USD 5.1 Billion and progressed to USD 53.4 Billion in 2017.
4. SEGMENTS IN BPO
BPO in India is organized in many segments. Previously there was only low end
voice operations were outsourced to India. In the early days of BPO in India voice
operations were the major actors leaving a very small proportion for non-voice
activities. But, as India moves up in the value chain, non-voice operations starting
occupy a bigger proportion of the BPO pie. Except voice and non-voice, BPO in
India can also be segmented into horizontal and vertical.
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So business process outsourcing can be segmented as:
BPO
NON-VOICE
VOICE BPO
BPO
APPOINTMENT SETTINGS
DEBT COLLECTION
HELP DESK
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FIGURE 10: CLASSIFICATION OF VOICE AND NON-VOICE
BPO
(A) VOICE BPO (FRONT OFFICE OPERATIONS)
1. INBOUND SALES:
2. OUTBOUND SALES
3. TELEMARKETING
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4. CUSTOMER SERVICE
5. ORDER PROCESSING
6. TECHNICAL SUPPORT
7. APPOINTMENT SETTING
8. DEBT COLLECTION
9. HELP DESK
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10. MARKET RESEARCH AND QUALITY SURVEYS
1. ACCOUNTING.
2. DATA ENTRY.
Data entry services helps in getting large amounts of information added into databases
or specific applications, cost effectively.
3. DATABASE MANAGEMENT.
Every business has customer and contact databases to manage and keep up to date.
Database management service allows keeping database clean and up to date through a
program of contacting our customers to ensure you have the latest information.
4. CLAIMS PROCESSING.
Typically associated with the insurance industry, claims processing actually covers any
process that starts with a customer enquiry that requires investigation, analysis,
assessment, decision, and follow-up with a formal response.
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5. TRANSCRIPTION.
6. HUMAN RESOURCE
Human resources are the manpower employed by the firm. It is the valuable asset of
the company. More and more businesses are outsourcing their human resource
business function or parts of that function to experts who do this service full-time. This
ranges from hiring processes to management of employee benefits process to payroll.
Businesses that find a high quality service provider outsource their HR activities and
can increase their employee satisfaction vis-à-vis reduce expenses.
2. High value and low volume. High-volume and low-value are the horizontal BPO’s
while high-value and low-volume are the vertical BPO’s.
Horizontal Vertical
BPO
BPO BPO
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(A) HORIZONTAL BPO
Security level
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6. REGULATORY FRAMWORK ON INDIAN BPO
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B. SARABANES OXLEY ACT.
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A. SEGMENTS IN BPO FINANCE.
2. NON-BFSI COMPANIES.
From them, the finance function is important as it helps the rest of the organization
runs smoothly. So such a company will outsource functions likes sales orders
processing, accounts payable, receivable managements, balance-sheet management and
cash management. For instance, a US based industrial major currently evaluating
finance BPO companies in India has 850 employees looking at finance at a total annual
cost of $110 million. Global airlines also, under cost pressures, are looking India to
outsource revenue accounting and sales audit functions. These include British Airways,
Australian Airlines, Malaysian Airlines and Qatar Airways.
MIDDLE END
ACTIVITIES
2.
(AROUND 25%-
33%)
2. MIDDLE LEVEL:
The middle level which constitutes almost 25% to 35% of the work includes processes
like accounting operations, general ledger consolidation, reporting. It also includes
tasks such as income tax returns.
3. TOP-END ACTIVITIES:
The top end activities constitute only 10% of the work in the finance and accounting vertical.
At the top end of the scale are activities like administration of mortgage-backed securities,
financial planning and analysis, requiring expertise of at least MBA finance or a statistics
graduate. Other work in this category includes equity/debt market research and analysis.
Study conducted by Deloitte suggests that the firms achieve 39 percent cost savings
from moving operations to low-cost centers.
The above table explains the major BPO players who are dealing in outsourcing finance
including other business process, and the number of people employed by them in finance 28
outsourcing.
9. TRENDS IN INDIAN BPO INDUSTRY
Trends imply the various changes which we are going to see in the near future in Indian BPO
industry whether positive or negative.
Overall, the fast-paced growth in outsourcing will slow in 2009, as companies lower
their spending on information technology, consolidate or exit markets, and find skilled labor
locally from layoffs in financial services and other industries.
New government direction under OBAMA could promote higher emphasis on socially
responsible business environments; driving outsources to create solutions that address them.
IAOP predicts will include industry competitive employee retention and welfare programs.
7. SERVICE PROVIDERS WILL SHIFT FROM TIER-1 TO TIER-2 AND TIER-3 CITIES
THEREBY CREATING RURAL BPO’S.
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A. DRIVERS OF BPO GROWTH IN INDIA:
There are mainly six important business drivers that are pushing enterprises
to consider the BPO option in India. These are:
1. ABUNDANT TALENT.
India’s young demographic profile is an inherent advantage complemented by an academic
infrastructure that generates a large pool of English speaking talent. Talent suitability
concerns are being addressed through a combination of government, academia and industry
led initiatives. It includes efforts by NASSCOM and other education agencies like UGC and
AICTE to facilitate industry inputs on curriculum and teaching.
The enabling policy environment in India was instrumental in catalyzing the early phase
of growth in this sector. Policy makers in India have laid special emphasis on encouraging
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foreign participation, with participating firms enjoying minimum regulatory and policy
restrictions along with a broad range of fiscal and procedural incentives.
5. OTHERS:
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10. COMPETITIVE LANDSCAPE OF BPO IN INDIA
BPO Industry in India is growing very fast. It is gaining ground everywhere. There is a lot
of competition today in BPO landscape. Let’s check out which are the major players in India.
We will study this under two heads:
Following is the list of Top 10 BPO Companies In India By Maximum Revenue as per data
released by Dataquest, an industry journal. The BPO companies in India posted a total
revenue of Rs. 32,246 crore in 2010-2011.
As per the Industry fact sheet published by NASSCOM, the Indian ITES-BPO segment grew
at 37% in 2005-06 (ITES-BPO) and the exports are expected to cross US$ 9 billion by end
2007.
an independent company and was rebranded Genpact. It is India's No. 1 BPO firm.
2. WNS GLOBAL
3. IBM DAKSH
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4. ADITYA BIRLA MINACS WORLDWIDE
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5. WIPRO BPO:
1. ISEVA.
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3. EFUNDS INTERNATIONAL.
4. AJUBA.
5. MOTIF.
Critical analysis means an appraisal based on careful analytical evaluation. Now for
analyzing the BPO industry we will study its:
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1. BENEFITS OF OUTSOURCING:
Outsourcing your non-core activities will give you more time to concentrate on
your core business processes.
Off shoring 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.
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.
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.
Off shoring 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.
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 its operational costs to more than
half.
If you want your organization to stay ahead of competition, concentrate on core
competencies and make use of the latest technologies, then outsourcing can help
your organization achieve all this and more.
2. LIMITATIONS OF OUTSOURCING:
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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 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.
WEAKNESS
STRENGHT THREATS
OPPORTUNITIES
1. STRENGTHS:
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2. WEAKNESSES:
Recent months have seen a rise in the level of attrition rates among BPO workers who
are quitting their jobs to pursue higher studies. Of late workers have shown a tendency
not to pursue BPO as a full-time career.
The cost of telecom and network infrastructure is much higher in India than in the US.
Manpower shortage.
Local infrastructure.
3. OPPORTUNITIES:
To work closely with associations like Nasscom to portray India as the most favoured
BPO/ITES destination in the world.
Indian BPO/ITES companies should work closely with Western governments and
assuage their concerns and issues.
India can be branded as a quality BPO destination rather than a low-cost destination.
$60 billion BPO business by 2010.
4. THREATS:
The anti-outsourcing legislation in the US state of New Jersey. Three more states in the
United States are planning legislation against outsourcing. These are- Connecticut,
Missouri and Wisconsin.
Workers in British Telecom have protested against outsourcing of work to Indian BPO
companies.
Other BPO/ITES destinations such as China, Philippines and South Africa could have
an edge on the cost factor.
Slowdown of demand.
11. CONCLUSION
Business Process Outsourcing industry is growing rapidly since its inception. Indian
BPO’s are going through exciting times. Starting with captive units and low-end
activities BPO’s are now moving to high-end activities. Indian BPO’s are operating in
both front-office and back-office operations.BPO industry in India is growing at the
rate of 28% and is expected to reach around USD14.8 Bn in2009. Exports are
accounting major proportion, which are in journey to touch USD 12.8 Bn by the end of
2009. These are growing at the fluctuating rate of around 20%-30% a year. Domestic
BPO market is also in growth and has accounted USD1.6 Bn in 2008.Inspite of this
BPO’s are helping in the development of economy by decreasing the evil
of unemployment. Since the evolution of BPO it is serving the country by providing the
employment to talented and able youth of the country. Up till 2009 it has generated
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around 730,000 employments in the country. Shift in BPO services has also been
experienced with moving from low-end to BFSI (Banking, Financial Services and
Insurance) and Hi-Tech sector. But the economic downturn has impacted the growth of
BPO industry. Still it occupied 60% of the offshore market. The industry is expected to
achieve USD 60 Bn by the end of 2012. And USD 225 Bn by the end of 2020.Various
trends have been experienced in BPO.
The BPO industry is drawing significant attention and India, by virtue of its
dominance in this sector is at the center of this attention. The shift of the Indian
economy towards more service orientation suggests that in the long term, India will
continue to be a major player in the global BPO industry.
Despite the growth that this industry is witnessing, there are certain areas that require
greater attention going forward from service providers to ensure that the industry
remains firmly on the growth path. This survey was conducted with the objective of
analyzing some of the key trends that will drive the future direction of the industry. We
Have endeavored to highlight some of the key risks that the industry faces and will face
as the industry evolves. We have also discussed the corresponding risk-mitigants that
service providers and companies are focusing on, to manage the risks. We hope that
this survey provides service providers with a deeper understanding of the
Industry they operate in and acts as an important input to potential customers
considering outsourcing their processes to India.
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1. www.nasscom.com
2. www.bpoindia.com
3. www.equaterra.com
4. www.economictimes.com
5. www.coolavenues.com
6. www.outsourceindia.com
7. www.tutorialreports.com
8. www.dataquest.com
9. www.outsourcingprofessional.com
10. www.google.co.in
11. www.wikipedia.com
12. www.chillibreeze.com
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Supervisor’s Certificate
The project which he is submitting is his genuine and original work to the best of
my knowledge.
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Student’s Declaration
I hereby declare that the Project Work with the title ―Business Processing
Outsource (BPO)‖ submitted by me for partial fulfillment of the degree of
B.Com (Honours) in Accountancy & Finance under the University of Calcutta is
my original work and has not been submitted earlier to any other University for
the fulfillment of the requirement for any course of study.
I also declare that no chapter of this manuscript in whole or in part has been
incorporated in this report from any earlier work done by others or by me.
However, extracts of any literature which has been used for this report has been
duly acknowledged providing details of such literature in the references.
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