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What is business process outsourcing? Business process outsourcing otherwise know as BPO is the process of leveraging technology vendors in various third world or developing nations for doing a job which was once the responsibility of the enterprise. Or simply put, it is the process of shifting an internal job process to an outside/external company which might have a completely different geographical location. Generally the processes being outsourcing as part of BPO are backend jobs like call/help centers, medical transcription, billing, payroll processing, data entry and the like. Most of these jobs are outsourcing by first world nations like USA and UK to third world nations like India, Philippines, China, Malaysia and some eastern European countries. These nations have a good pool of English speaking youth who receive accent and job related training before they are inducted at a salary which is much lesser than what their counterparts in first world nations would demand. This allows first world organizations to get higher profits and provide better services by lowering the prices and by recruiting more labor than they could possibly do otherwise. In addition to benefiting the first world nations, business process outsourcing has also benefited third world nations by generating much needed jobs.
What is BPO?
BPO as expanded sounds as Business Process Outsourcing and can be aptly defined as the act of utilizing the services of a third party by a company in order to perform its back office operations that might be payroll administration, customer help desks/ call centers, tele- marketing, accounting, billing; the list is endless. Business Process Outsourcing (BPO) is outsourcing of business functions generally performed by white collar and clerical employees to achieve various benefits such as cost savings, better quality and ability to focus on core competence. BPO involves outsourcing processes that are not core to a company, however, are essential for smooth operation of the company. The customer transfers the complete responsibility of these functions to the vendor who guarantees certain service quality standards. Such processes include customer service, payroll processing, inventory management, etc. The global market size for BPO is estimated to be around USD 382.5 billion in 2004 according to market intelligence firm IDC. The research firm expects robust growth in the BPO industry with more and more companies reaping the benefits of BPO all over the world. The BPO market size is expected to reach USD 641.2 billion by 2009 with a Cumulative Annual Growth Rate (CAGR) of 10.9 percent from 2005 to 2009. BPO has evolved over the years, beginning with time-sharing data processing in the 1960s; according to technology research and consulting firm ebs. Over these years, like outsourcing, BPO has moved from being transactional (task oriented) to being strategic (process oriented).
Business Process Outsourcing includes the following areas and a lot more
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Back office operations Customer Relationship Management Call Centers and telemarketing Tele-servicing and product support Payroll maintenance Finance / Accounting/billing Human Resources Logistics Management Supply Chain Management Medical transcription Back Office Operations Insurance Claims Processing Legal database maintenance
The BPO Industry
The BPO industry has flourished at a frantic pace in the last few years and companies have ended up with huge savings by being a part of the industry. By outsourcing their back office business processes to cheaper nations like China, India, Philippines, Mexico, South Africa etc companies can cut costs, better concentrate on their core businesses and strengths, ensure better customer satisfaction and in a way get an edge over their competitors. A report suggests that US firms have saved nearly $8 billion through outsourcing to third world nations like India. Industry size India has revenues of 10.9 billion USD from offshore BPO and 30 billion USD from IT and total BPO (expected in FY 2008). India thus has some 5-6% share of the total BPO Industry, but a commanding 63% share of the offshore component. This 63% is a drop from the 70% offshore share that India enjoyed last year, despite the industry growing 38% in India last year, other locations like Eastern Europe,Philippines, Morocco, Egypt and South Africa have emerged to take a share of the market. China is also trying to grow from a very small base in this industry. However, while the BPO industry is expected to continue to grow in India, its market
8-10 telecoms. making conditions really viable for a positive growth in the BPO industry. they estimate that 8% of that capacity was utilized as of 2006. A variable cost structure helps a company responding to changes in required capacity and does not require a company to invest in assets. 10-12 auto. 8 pharma. WNS Global Services. accounting and HR. The top five Indian BPO exporters for 2006-2007 according to NASSCOM are Genpact. According to McKinsey. and TCS BPO. Chennai and New Delhi. Most services provided by BPO vendors are offered on a fee-for-service basis This can help a company becoming more flexible by transforming fixed into variable costs. IBM Daksh. An advantage of BPO is the way in which it helps to increase a company¶s flexibility. 25-35 insurance. several sources have different ways in which they perceive organizational flexibility. 10-12 travel/hospitality.share of the offshore piece is expected to decline. BPO Benefits and Limitations Benefits of BPO y y y y y Increase productivity Cut operational costs Provide better service Save costs Improved accountability The BPO boom seems to be increasing everyday with more and more companies deciding to follow the race. Kolkata. . Mumbai. However. the global "addressable" BPO market is worth $122 ± $154 billion. Therefore business process outsourcing enhances the flexibility of an organization in different ways. 10-15 others and 20-25 is finance. Moreover. Pune. Outsourcing may provide a firm with increased flexibility in its resource management and may reduce response times to major environmental change. you can make money online through bpo. of which: 35-40 retail banking. Transworks Information Services. Important centers in India are Bangalore. thereby making the company more flexible. Hyderabad.
They often provide similar services. BPO therefore allows firms to retain their entrepreneurial speed and agility. A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may take years to amortize. and have similar Quality Improvement approaches. Among problems. leverage similar technology stacks. Although the above-mentioned arguments favor the view that BPO increases the flexibility of organizations. BPO helped to transform Nortel from a bureaucratic organization into a very agile competitor A company can maintain growth goals while avoiding standard business bottlenecks. which they would otherwise sacrifice in order to become efficient as they expanded. Consequently. may become outdated or turn out to be a poor match for the company over time. which arise in practice are: A failure to meet service levels. . and a dependence on the BPO which reduces flexibility. which work against these advantages. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation. such as the throughput in the case of a manufacturing company. changing requirements and unforeseen charges.Another way in which BPO contributes to a company¶s flexibility is that a company is able to focus on its core competencies. product leadership. which can increase efficiency and cut costs Supply chain management with the effective use of supply chain partners and business process outsourcing increases the speed of several business processes. management needs to be careful with the implementation of it as there are a issues. A third way in which BPO increases organizational flexibility is by increasing the speed of business processes. Finally. The key lies in knowing which of the main value drivers to focus on ± customer intimacy. have similar geographic footprints. Using techniques such as linear programming can reduce cycle time and inventory levels. Focusing more on one of these drivers may help a company create a competitive edge. or operational excellence. unclear contractual issues. these challenges need to be considered before a company decides to engage in business process outsourcing A further issue is that in many cases there is little that differentiates the BPO providers other than size. Key employees are herewith released from performing non-core or administrative processes and can invest more time and energy in building the firm¶s core businesses. without being burdened by the demands of bureaucratic restraints. flexibility is seen as a stage in the organizational life cycle.
more focused on the identification process of potential outsourceable Information Systems. underestimation of running costs and the major risk of losing independence. Fitzgerald identify several contracting problems companies face. maximizing positive outcome. From a knowledge perspective. outsourcing leads to a different relationship between an organization and its contractor. For example. to a lack of understanding of technical IT.processes.Threats Risk is the major drawback with Business Process Outsourcing. Outsourcing of an Information System. can cause security risks both from a communication and from a privacy perspective. Willcocks. to successfully identify. L. Risks and threats of outsourcing must therefore be managed. a changing attitude in employees. M. or can be outsourced. manage and control the business processes that are. In order to manage outsourcing in a structured way. BCM consists of a set of steps. . to achieve any benefits. and minimizing risks and avoiding any threats. for example. Lacity and G. identified as AHP. security of North American or European company data is more difficult to maintain when accessed or controlled in the SubContinent. Another framework. ranging from unclear contract formatting. is explained. a Business Continuity Management (BCM) model is setup.
Gartner has also observed the latest trend of offshore insourcing . execution capability and financial stability are important considerations while selecting a vendor. Table 1: Evolution of BPO Years Process 1960s Time sharing 1970s Data processing 1980s Entire IT operations 1990s Shared business services 2000s B2B partnerships via Internet 2000s Process outsourcing via Internet 2000s IT-enabled offshore services . Analysts tracking BPO have observed the following trends in the industry: y y y y The BPO market worldwide is expanding with new services getting added to the list of business processes that are outsourced and new locations coming up as potential offshore destinations. customer care and logistics are mature segments. These captive centers are generally shared service centers and allow the firms to retain control over the processes. in which firms establish their own offshore captive centers. India being the most preferred destination for offshore BPO. According to IDC. Information security. while procurement and training are emerging markets and are expected to have a growth of more than 10 percent in the next five years. Cost savings is one of the most important drivers now.BPO Trends The BPO industry is a developing sector and is being studied by analysts and researchers all over the world.
reviews of global consulting firms. employee satisfaction. The parameters used for ranking these vendors include customer satisfaction. The Black Book of Outsourcing by Doug Brown and Scott Wilson provides a list of world's best BPO vendors for the year 20042005. the Chief Resource Officer Institute. performance with respect to other vendors and client performance ratings. There is a strong competition among these multinationals and many organizations such as the Outsourcing Management Institute.World's Best BPO Vendors Owing to the huge opportunity that lies in BPO. Table 2: World's Best BPO Vendors Num Vendor 1 IBM Global / Daksh 2 Accenture 3 Hewlett Packard 4 MphasiS 5 Ernst & Young / Capgemini 6 Wipro Spectramind 7 ICICI One Source 8 eFunds Global Outsourcing 9 Convergys 10 Affiliated Computer Systems . The top 10 BPO vendors have been listed Table 2. large corporations have ventured into the business and have set up BPO operations all over the world. DataQuest and BPOrbit release BPO rankings each year.
benefit administration. 2.BPO Business Models Over the years. tax solutions. Healthcare. different models have been used for conducting business in BPO. The regular outsourcing models of on-shoring. companies should focus on providing vertical services as the market matures. aims at improving the efficiency of the process. Examples of horizontal BPO are outsourcing in procurement. etc. Niche BPO: A niche BPO carries out 3-4 aspects of a process. Comprehensive BPO: A comprehensive BPO handles both transactional and administrative tasks in a process and takes 70 percent responsibility of the output. a sourcing advisory. nearshoring and offshoring. The customer has to carry out a significant part of the process in-house and hence the customer owns the risk of the process. has observed that in addition to on-shoring. HR. financial services. The vendor specializes in carrying out particular functions across different industry domains. However. EXL Service Holdings is a . Vertical BPO: A vertical BPO focuses on proving various functional services in a limited number of industry domains. BPO operations are also conducted through the following three business models : Transactional BPO: Transactional BPO handles one aspect of a process only. near-shoring and offshoring are seen in BPO as well. which also makes certain investments in the customer's process. TPI. manufacturing and retail are examples of vertical BPO domains. Both the vendor and the buyer share the risk of the process. outsourcing many aspects of the process in a transactional mode leads to complex fragmentation which can pose as a threat to productive delivery. sometimes seeking the services of the customer's employees. facilities management and similar functions. These have been explained below: 1. Comprehensive BPO has bulk deals lasting for 7-10 years. Also. The vendor in a niche BPO works in close coordination with the buyer. payroll processing. Types of BPO Services BPO services are generally categorized into horizontal and vertical services. Automatic Data Processing (ADP) is an example of a horizontal BPO vendor. ADP focuses on providing services in horizontal functions such as payroll. Horizontal BPO: Horizontal BPO involves function centric outsourcing. A niche BPO. The vendor purchases the buyer's assets and also hires most of its employees. according to Gartner. HR.
vertical BPO having focus on industry domains such as healthcare. business services. Table 1: Horizontal and Vertical BPO . utilities and energy and manufacturing.
Pressure to lower costs: Companies are facing huge competition from their competitors to provide better services. The best practices followed in the BPO industry include: y y y y y Companies outsource critical but non-core business processes that are not strategic to the firm's vision. etc. resorting to BPO. Sourcing advisors are consulted for negotiating a deal. transparency of operations. .BPO Best Practices With time. every industry starts following certain best practices as it develops and matures. This infrastructure also allows them to increase their ROI and shareholder value. BPO Drivers and Inhibitors The advantages offered by outsourcing in general are valid for BPO as well. companies are lured to choose the BPO option due to the following external drivers: y y y Robust IT and telecommunications infrastructure: The developments in IT and telecommunications infrastructure has enabled companies to transfer data to any place in the world instantaneously at very little cost. and at the same time lower their costs. In such a scenario. The first step towards this is early communication of the outsourcing decision to the employees and even the shareholders. Companies gather support from its employees before taking the outsourcing plunge. An inefficient process is not outsourced to a third party vendor without any reengineering. In addition to these internal drivers. India being the most preferred destination. which provides human labor at a lower cost. cost. enables companies to maximize their ROI. Offshore BPO is cheaper than onshore BPO and many companies are now moving their operations to offshore locations. Vendor is selected based on various criteria such as quality commitment. data security. Companies are constantly innovating the way they are conducting businesses and BPO allows them to partner with external specialized vendors for efficient operations. and these advantages act as internal drivers for BPO. Little infrastructure for automation: The IT revolution has not achieved success in automating business processes and most of the business processes still need human labor for productive delivery.
if the (trained) employees in the vendor firm leave the job. order taking. What constitutes BPO? BPO deals mainly with non-core processes of an organization. if it does not search the new vendor fast. marketing and communications. product support. technical help desk. document conversion. Finance and accounting: Finance and accounting outsourcing includes services such as internal auditing. forms processing. indexing.The perceived risks of outsourcing act as a big inhibitor for BPO. Refer to the report on Customer Service Outsourcing for more details. the buyer will have to search another vendor. and regulatory compliance documents. etc. the buyer may be at risk. Also. Loss of expertise: Customers may lose the expertise and knowledge of carrying out the outsourced processes with time. Document processes: Document process outsourcing includes outsourcing of customer facing. secretarial tasks support. Customer relationship management: Customer service outsourcing includes outsourcing of functions such as customer support. time and expense management. financial accounting. customer service. Some of these risks have been described below: y y y y Loss of control: Companies perceive the risk of losing control over the operations of their processes. collections and market research. the operations being at risk. travel . technical. y y y y Administrative support: Outsourcing of administrative support functions includes data entry. Financial instability of the vendor: If the vendor becomes financially unstable in some years. Data security: Data confidential to the customer may be prone to theft if the vendor firm does not have stringent security policies. document scanning. Some of these processes have been briefly explained below.
These records include patient history and physical reports. market research. licensing support. Publishing: Publishing outsourcing involves outsourcing of publishing functions such as book design. research. journal administration. These companies have started outsourcing their research and analysis requirements to vendors who specialize in typical research and analysis work such data analytics. documents management. . Over the past few years. collections. diagnosis. companies are now resorting to HR outsourcing big time. credit and debt analysis. drawings and graphics. financial analytics. clinic notes. Medical transcription: Medical transcription is writing down medical records dictated by physicians and other healthcare professionals. loans and insurance claims processing are also being outsourced. payment. etc. Some vertical processes such as mortgage. indexing. accounts receivable and billing-dispute resolution. attrition/retention. and patent portfolio analysis. transcription. Forester research predicts transaction processing to be a large segment within the BPO industry soon. companies choose to outsource their R&D functions to vendors who have expertise in a given field. training.. numerous MNCs have initiated offshoring R&D to other countries including India which is emerging as a hub for R&D outsourcing. Product development: Companies need to constantly innovate to remain competitive in the market. translation and other administrative and secretarial support services required for various legal functions such as commercial litigation. etc. discharge summaries. government contracts. for their employees. appeals. e-publishing. check. clinical course.y y y y y y y y expenses. Carrying out these tasks through an internal HR department is costly and diverts the attention of the management from its core business issues. etc. etc. database management. credit card and stock trade processing. Legal services: Legal process outsourcing (LPO) involves consulting. contractworker management. Human resources and training: Human resources (HR) is one of the most critical assets of a company and companies need to carry out various tasks such as recruitment. Payroll maintenance and other transaction processing: This segment includes payroll. book digitization. accounts payable. Research and analysis: Companies require data and its analysis for making informed strategic decisions. billing. With the increasing specialization of expertise required to carry out product development. prior art research. with a market size of USD 58 billion in 2008. legal risk evaluation. therapeutic procedures. Intellectual property research and documentation: Outsourcing in intellectual property research and documentation includes filing and drafting of patent applications. arbitration and mediation. invoicing. prognosis. Hence.
telephone surveys. electronic security systems. etc. Maintaining these resources and implementing a fool-proof security policy is a difficult task which can be better handled by experienced third party security agencies. Sales and marketing (including telemarketing): Sale and marketing outsourcing involves delegating parts of sales and marketing functions such as cold calling. contract management. Security outsourcing involves management of investigative services. primary research. computer and network security. industry overview. sales team management. etc. lead generation. etc. lead qualifying. Security: Companies have to search for new technologies and employ qualified security professionals to keep their data secure from theft. .y y secondary research. supply chain relationship management. etc. email pitches. competitive intelligence. procurement. physical security. appointment setting. Supply chain management: Outsourcing in supply chain management involves logistics. warehouse management.
skilled manpower that is readily available. Where in India? IT city Bangalore seems to be a hot destination for BPOs swiftly followed by similar technologically advanced cities like Chennai. All these cities in India are technologically advanced and have a good infrastructure with almost 278 quality certified BPO vendors. So what is it that makes Bpo India stand out in the crowd? The Indian Edge India in the recent years has shown huge developments in the areas of communication. Mumbai. This coupled with advancement in communication facilities and improving infrastructure is enabling India to enter into the high end services providing sector that will strengthen even further in the years to come enabling global players to outsource high end service based jobs to India. . power and software developments. In addition India has ISO 9000. low cost. but the situation seems to be improving every day with companies moving up the value chain by entering knowledge services. India stands out of the rest in terms of better IT and technological infrastructure. call center. tele-calling. Companies such as Office Tiger and WNS Global are already moving in this direction with both companies setting up knowledge service divisions. Kolkata and Pune. tele-marketing and so on. Improving situations India as a major outsourcing destination mainly handles low value added. activity related back office services such as data entry. Delhi.Present and Future The BPO boom has helped developing countries like India in a major way by creating quality job opportunities in turn benefiting the Indian economy. a stable government.BPO India . India exports software to 95 different countries and stands second in the world as far as software exports are concerned. CMM quality certified software firms that have a reputation of providing quality services. Hyderabad. friendly taxation and other laws. a fast paced economy and quality certified software firms.
Low manpower costs. Hewlett Packard. Brazil. as there are a few countries that stand. India has a technological edge over others and exports software to 95 countries world wide and can provide you with hi tech infrastructure for IT and other related technological services. Qwest. GE. India. IBM. Mexico. at lease for the time being. TransUnion. best infrastructure and advanced technology make outsourcing to India your best bet. In addition India being the largest democratic country has a stable government with extremely labor and investor friendly laws. Why outsource to India? The benefits of offshore outsourcing and particularly software services outsourcing to India are many. Where to outsource? The Outsourcing spectrum may highlight various outsourcing destinations like China. Prudential. South Africa. But it doesn't take much time for anyone to come to a conclusion that India tops the rest and does so with utmost ease. Canada etc where one can outsource.Benefits of outsourcing to India Selecting the perfect outsourcing destination plays the most important role in deciding your success or failure! But you need not panic. This has been proved by the statistics of erp outsourcing 2003 india along with IT outsourcing India. Oracle. Rand McNally along with 230 fortune 1000 companies outsource to India. GE Capital. Being an IT focused country. Dell Computer Support. Philippines. ATT Wireless. way out of the rest that might aid your decision making. Schlumberger. Microsoft. To begin with India is a nation that is brimming with youthful energy and holds huge talents in the sectors of information technology and other related fields. Cisco. EDS. First Consulting Group (FCG). An obvious question being WHY? Well we can't give you a comparitative analysis but rather we would like to give you some hard facts about India and why there are so many companies who don't blink an eye-lid before betting on this developing Subcontinent. India gives you the advantage of english speaking youth who are both hard working and talented and has the best institutions that produce highly talented brains. Bell South. talented workforce. Ireland. Who said finding the perfect outsourcing destination was difficult? . No wonder big companies like IBM. high quality of service.
Negative effects of Outsourcing Over the past 20 years outsourcing as a phenomena has developed at a very fast pace. Negative . Here again the policies are to blame. The Outsourcing Trap The false image of outsourcing created today because of sloppy policies has lead to many outsourcing failures leading to heavy losses. cultural misfit. This is where the governments fail and this is where the fault lies. The third world countries do get benefited because of this. lack of knowledge and lack of good policies are responsible for major companies getting their feet burned due to outsourcing. Offshore outsourcing backlash on communities was bound to happen not because the jobs are getting outsourced. The situation seems more threatening every added day as more companies follow suite to the actions of their rivals. but what about the people in the first world nations. but because the way the jobs are being outsourced offshore today. which has manipulated itself into outsourcing. It has lots of downsides that most of us can't possibly conceive and only have to leave it to time. Here the products and services that come cheaper and with high quality get better sales that those with only quality. Impact of Offshoring Jobs With outsourcing the jobs are sure to go. The growth of IT. aiding globalization and thereby generating multinational societies has given rise to situations where cut throat competition tends to take the better of us. The concept of a fair playing ground is that an organization must not be affected much irrespective of the fact whether it wants to outsource or not. lack of communications.The Real Facts Outsourcing is seen by many economists as a win-win situation but is not always so. People are not able to grasp the implications with a pinch of salt that is way too salty. All of us need services and that too at a lower cost. Imagine the plight of an organization that is quite happy without outsourcing and feels the punch when the rival starts grabbing all the profits by lowering the price. There is no fair playing ground for companies big and small and the only alternative that they are forced to believe is to outsource. The present major downside of outsourcing is the fact that policies of the first world nations like UK and US for outsourcing are nothing but sloppy. Poor governance. Outsourcing . to cut costs and provide better services. They do feel unrest and no assurances are going to keep them from frowning about their precious job that was taken away. One face of this competition is the frenzy of research and development.
Most of these suppliers handle many processes from different organizations and in many cases. a situation that outsourcing gave rise to. The drawbacks can be in the form of a firm actually increasing its spending structure without its knowledge. emergence of new competitors and loss in the product/service competitiveness. Beware of the Supplier . After all who would like to serve an organization that he feels is going to sack him for all his services. One more point here is that a sacked employee could even join hands with competitors and bring to light the weaknesses of the company. As the supplier has complete control over processes of an organization he may leak it to the potential competitor who offers better rates. may even be providing services to organizations that are rivals or direct competitors of each other. This gives rise to a situation of the information being leaked.effects of outsourcing offshore are only bound to increase further in case the limitations on offshore outsourcing are not clarified.Future Negative Implications Outsourcing service providers or suppliers are the ones that offer services to small and medium sized organizations. Other Drawbacks of Outsourcing At this point it will be logical to highlight some very rampant drawbacks of outsourcing. Firstly there is a situation today where employees have started fearing job losses. One more situation that can develop is the supplier himself getting all the inside information can start his own services. Outsourcing can also lead to the alterations of well established job processes that can . This kind of situation is more than inevitable. But the small and medium sized companies depend completely on these suppliers to outsource their processes. Outsourcing has lots of drawbacks that are still not clear and will emerge eventually as time passes. This can lead to organizations loosing its customers entirely to their competitors. you can work at home opportunities. Big shots don't need these suppliers as they set up their own outlets. This gives rise to a newer and stronger breed of competitors who have the ability to collaborate with competitors or set up individual branches with better services. This gives rise to lower motivation and thereby decline in services. Though it has some negative effects at its side . An employee can give the company 100% if and only if he feels that he is an integral part of the organization and not some dummy to be sacked when ever the company feels like.
lead to unnecessary delays and conflicts. . Lack of coordination between people having different cultural backgrounds and different time zones can also lead to time losses. On the contrary outsourcing is way more complicated and can lead to drastic situational developments in the afterward. outsourcing really does not seem to be the magic answer for cutting costs. The governments of first world nations at this point need to analyze this situation and help develop a fair playing ground for organizations taking into consideration the negative effects of outsourcing offshore. Looking at all these drawbacks.
administers and manages the selected process based on defined and measurable performance criteria. Business Process Outsourcing (BPO) is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry.BPO Industry in India.A Report Business process outsourcing (BPO) is a broad term referring to outsourcing in all fields. . Few of the motivation factors as to why BPO is gaining ground are: y y y y y Factor Cost Advantage Economy of Scale Business Risk Mitigation Superior Competency Utilization Improvement Generally outsourcing can be defined as . A BPO differentiates itself by either putting in new technology or applying existing technology in a new way to improve a process.An organization entering into a contract with another organization to operate and manage one or more of its business processes. Business Process Outsourcing (BPO) is the delegation of one or more ITintensivebusiness processes to an external provider that in turn owns.
India¶s capabilities in BPO Low labor costs ($1. project management skills. adequate supply of English speakers due to large-urban locations leading to realization of scale economies (average call center is 1000+ employees).50-$12/hour.5-$3/hr) for high quality. will drop to 30% by 2006. Currently call-centers account for 70% of work. all-in costs of $5. focus on financial. shortage of middle and senior migration and operations management. expect BP employment to cross 1. telecom and IT firms¶ back-office work.S. Rapid ramp-up possible: most firms we met planned 100%+ annual expansion into the next 3 years. real estate. adequate and cost-effective communications and other infrastructure.000. shortage of vertical expertise in fast-growing areas like insurance. logistics. MNCsdriving growth (40% market share). document management and interactive customer-care. strong flow of global venture capital. MNC presence. health care. is higher).000 by 2006. benefits. andtechnological sophistication. Negatives are high operator attrition rates (though the U. compared with US costs of $28/hour. . and shortage of horizontal expertise in payroll.
customers calling to check for information on products and services. 4. software. Service Example: Customers calling to check on their order status. . customers calling to check their reservation status etc. outbound calling to retail households to sell leisure holidays. customers calling to understand how to dial up to their ISP. These include installation and product support. or to up-sell / promte and cross sell to an existing customer base or to complete the sales process online.Different Types of Services Being Offered By BPO's 1. peripherals and Internet infrastructure manufacturing companies. outbound calling to existing customers to sell a new ratecard for a mobile service provider or outbound calling to sell credit or debit cards etc. 3. Service Example: Outbound calling to sell wireless services for a telecom provider. customers calling with a problem with their software or hardware. up & running support. Telemarketing Services Our telesales and telemarketing outsourcing services target interaction with potential customers for 'prospecting' like either for generating interest inproducts and services. troubleshooting and Usage support. Employee IT Help-desk Services Our employee IT help-desk services provide technical problem resolution and support for corporate employees. customers calling to verify their account status. Service Example: Customers calling to resolve a problem with their home PC. 2. Customer Support Services Our customer service offerings create a virtual customer service center to manage customer concerns and queries through multiple channels including voice. Technical Support Services Our technical support offerings include round-the-clock technical support and problem resolution for OEM customers and computer hardware. e-mail and chat on a 24/7 and 365 days basis.
routing specific requests to designated contacts and remote diagnostics etc. Accounting. office productivity tools support including browsers and mail. Policy issuance etc. Nominee. connectivity etc. Risk assessment. Service Example: New Business / Promotion: Inbound/outbound sales. product usage queries. Data Entry Services / Data Processing Services Service Example: o o o o o o o o o o o o 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.Service Example: of this service include level 1 and 2 multi-channel support across a wide range of shrink wrapped and LOB applications. 5. Insurance Processing Our insurance processing services provide specialized solutions to the insurance sector and support critical business processesapplicable to the industry right from new business acquisition to policy maintenance to claims processing. . new service requests. Case Management. Initial Setup. notebooks.. Claim Overpayment. IT operational issues. Customer care service via voice/email etc. 6. Beneficiary. system problem resolutions related to desktop. Policy Maintenance / Management: Record Changes like Name. Collateral verification. Data entry of E-Books / Electronic Books Data Entry : Yellow Pages / White Pages Keying 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. Underwriting. Address. Surrender Audits Accounts Receivable. OS.
Book Keeping and Accounting Services o Service Example: General Ledger o Accounts Receivables and Accounts Payable o Financial Statements o Bank Reconciliation o Assets / Equipment Ledgers etc. o Conversion from paper or e-file to various formats 9. word processors. Scanning. Sorting. o E-Book Conversion etc. o ADOBE PDF Conversion Services. o Conversion from Text to Word to HTML and Acrobat o Convert Raw Data into required MS Office formats. and many other standard and custom-made software packages as per requirement. 7. o Manuscripting typing in to word o Taped Transcription in to word. Indexing Data into required format etc. OCR with Editing & Indexing Services o Service Example: High speed Image-Scanning and Data capture services o High speed large volume scanning o OCR Data From Scanned page / image o Scan & OCR paper Book in to CD. 10. o Conversion from Ms-Word to HTML format o Conversion from Text to Word Perfect. spreadsheets.Data Entry for Mailing List/Mailing Label. 8. Form Processing Services: o . Paste. o Text to PDF and PDF to Word / Text / Doc o Data Compilation in PDF from Several Sources. o Copy. Data Conversion Services o Service Example: Conversion of data across various databases on different platforms o Data Conversion via Input / Output for various media. o Data Conversion for databases. Editing. o Conversion from Page maker to PDF format.
Service Example: Insurance claim form o Medical Form / Medical billing o Online Form Processing o Payrol Processing etc. Survey. . Internet / Online / Web Research Service Example: o o Internet Search. o 11. Product Research. Web and Mailing list research etc. Market Research. Analysis.
there is no standard curriculum. The training component has to be seen as an important sub-process. performance or HR policies.Challenges for a HR Professional in BPO 1. information security. Key To success The key to success in ramping up talent in a BPO environment is a rapid training module. requiring constant re-engineering. etc.000 miles away. business continuity and disaster recovery. Everyone is charting their own course. demands on parameters such as quality. Customer-companies tend to demand better results from outsourcing partners than what they could actually expect from their own departments. due to the wide variety of the jobs. how to be more efficient than the original? 5. Lack of focused training and certifications Given this background. the recruiting and compensation challenges of HR departments are only understandable. which could be designed and followed. Brand equity: People still consider BPO to be "low brow". So. "When the job is being done 10. lack of general clarity on skill sets. Benchmarks: There are hardly any benchmarks for compensation and benefits. thus making it difficult to attract the best talent. . 4. 2. are far higher than at home. turn around timeliness. Standard pre-job training: Again. etc. 3.
Convergys 5. HTMT 14. Training . WNS Group 2. Daksh e-Services 4. Appraisal System. Composite Satisfaction. as per US GAAP. according to a survey done by NASSCOM. 24/7 Customer 15. 1. . Job Content / Growth. People. Cost to company . pushing Wipro Spectra mind to the second position. vCustomer 13. Tracmail 11. GTL Ltd. Wipro Spectramind 3. Dream Company: (Percentage of respondents in the total sample who preferred a particular company). Sutherland Technologies The parameters for the survey was: Employee Size (Operation level executives). Company Culture. Percentage of last salary hike. Preferred Company: (Percentage of respondents of a company who named their own company as the preferred one). ICICI Onesource 8. HCL Technologies 6. Overall Satisfaction Score. Zenta 7. MphasiS 9. 12. The basis of ranking is the revenues generated by the BPO companies in 2003-04.Business Process Outsourcing: The Top Rankers WNS has emerged as the top BPO in India. EXL 10. Salary and Compensation . A list of top fifteen BPO companies in India is given below.
The employee can use the amount deposited in this fund for various personal purposes such as purchase of a new house. All employees and their dependent family members are eligible.Employee Benefits Provided By Majoriy Of the BPO Companies y y y y y y Provident Fund: As per the statutory guidelines. the employee is required to contribute a percentage of his basic salary and DA to a common fund. nonearning parents and children above three months Personal Accident Insurance Scheme: This scheme is to provide adequate insurance coverage for Hospitalization expenses arising out of injuries sustained in an accident. Group Mediclaim Insurance Scheme: This insurance scheme is to provide adequate insurance coverage of employees for expenses related to hospitalization due to illness. The fund created can be used by the employee for the purpose of long-term investment in various things such as a house etc. The lunch provided is also subsidized. Dependent family members include spouse. It is applicable to all the employees of JFWTC and covers total / partial disablement / death due to accident and due to accidents. in fact some of the BPO . marriage etc. Company Leased Accommodation: Some of the companies provides shared accommodation for all the out station employees. disease or injury or pregnancy in case of female employees or spouse of male employees. Gratuity: Gratuity is one of the retrial benefits given to the employee in which the employer every year contributes a particular amount. Subsidized Food and Transportation: The organizations provides transportation facility to all the employees from home till office at subsidized rates. The employer for this fund contributes as well.
Air tickets etc Cellular Phone / Laptop: Cellular phone and / or Laptop is provided to the employees on the basis of business need. and purchase of books subject. The Pay for Performance can be as much as 22% of the salary. Corporate Credit Card: The main purpose of the corporate credit card is enable the timely and efficient payment of official expenses which the employees undertake for purposes such as travel related expenses like Hotel bills. chess tables and coffee bars. the medical check-up can be done once a year. examination fees. For employees with above 40 years of age. and/or other management qualification at India's top most Business Schools.The factors on which Flexi time is allowed to an employee include: Child or Parent care. Health situation. Educational Benefits: Many BPO companies have this policy to develop the personality and knowledge level of their employees and hence reimburses the expenses incurred towards tuition fees. Maternity. for pursuing MBA. yearly benefits and income tax payable. Companies also have well equipped gyms. personal trainers and showers at facilities. The purpose is to provide to the employees to lead a more comfortable work life balance. The employee is responsible for the maintenance and safeguarding of the asset. accuracy and productivity of each process. Recreation. Personal Health Care (Regular medical check-ups): Some of the BPO'S provides the facility for extensive health check-up. ATM and Concierge facilities: The recreation facilities include pool tables.e. performance based incentive scheme. Flexible work schedules are initiated by employees and approved by management to meet business commitments while supporting employee personal life needs . Cafeteria.y y y y y y y y y companies also undertakes to pay electricity/water bills as well as the Society charges for the shared accommodation. Employees are also provided with financial assistance at the time of their wedding. The new recruits are provided with interest free loans to assist them in their initial settlement at the work location. And. Performance based incentives: In many BPO companies they have plans for . speed. The parameters for calculation are process performance i. Loans: Many BPO companies provides loan facility on three different occasions: Employees are provided with financial assistance in case of a medical emergency. It is applicable of all . Formal education program Flexible Salary Benefits: Its main objective is to provide flexibility to the employees to plan a tax-effective compensation structure by balancing the monthly net income. Flexi-time: The main objective of the flextime policy is to provide opportunity to employees to work with flexible work schedules and set out conditions for availing this provision.
singing. the attrition rate in BPO industry is very high. football. Medical Reimbursement. 6. dancing etc. etc and regularly play matches with the teams of other organizations and colleges. this is the industry. 8. Find nothing better to do. The Flexible Benefit Plan consists of: House Rent Allowance. Did not get a better job. The Salary consists of Basic. 3.y y y y y y the employees of the organization. acting. once in a quarter. Wedding Day Gift: Employee is given a gift voucher of Rs. Employee Referral Scheme: In several companies employee referral scheme is implemented to encourage employees to refer friends and relatives for employment in the organization. why?. Apart from that the organizations also conduct various sports programs such as Cricket. 2000/. Education level doesn't matter Good work environment Good Benefits Flexibility of time Attractive life style Transport facility .to Rs. where there is no reference checks and very often people don't even specify there exact age. Lets me share with you some of the reasons as why people prefer to join a BPO: 1. 4. Special Allowance Regular Get together and other cultural programs: The companies organizes cultural program as and when possible but most of the times. Some BPO's like to take people with MBA but then again the specialization are of an individual hardly makes any difference. Paid Days Off Maternity Leave Employee Stock Option Plan Inspite of all these benefits. 7. DA and Conveyance Allowance. in which all the employees are given an opportunity to display their talents in dramatics. Again. 2. 7000/based on their level in the organization. 5. Leave Travel Assistance. What is the reason for an employee to leave? These and many more are the questions that need immediate attention from the industrial gurus. Why people prefer to join BPO's? In general a person with any graduation can join any of the BPO.
1.Mr.when there are so many privileges for the BPO employees than what makes them to change the company/industry?? Is it only MONEY that matters or anything else as well?? Here are some of the reasons for a BPO professional to change his/her job. . and Head Plantworkz .Mr. 6. The great growth momentum that the industry is witnessing is creating both vertical and lateral career opportunities. 3.. Arjun Vaznaik.Why people leave the BPO's? When there are so many benefits associated with BPO industry«. NIIT Ltd. 2. COO. Hughes BPO Services "It will not be possible for the industry to arrive at a blanket agreement on poaching but bilateral agreements between companies are being signed. 4. Industry needs to go aggressive but not cannibalistic. Executive Vice President & GM. 8. There also exists enough growth opportunities in the middlemanagement and supervisory level within the industry". "Training is a very important aspect of the ITES-BPO industry". Suren Singh Rasaily. Tracmail " Career growth in the industry is robust and there is a long-term opportunity. 5.Aadesh Goyal. No growth opportunity/lack of promotion For higher Salary For Higher education Misguidance by the company Policies and procedures are not conducive No personal life Physical strains Uneasy relationship with peers or managers What they have to say? With so much of uncertainty in the market«. Senior Vice President. Basic norms are being put in place and code of ethics is being stressed upon by industry players within the sector with respect to HR practices.people are trying their best to stop or to at least have a control on the attrition rate«let me share with you the opinion of the real gurus of the industry. We are encouraging companies to adopt responsible behavior in order to ensure that the industry does not become a victim of its own actions." . 7.
Today. Clusters are emerging for both IT and BP (Mumbai and Delhi for BP. higher in BP) and issues with telecom. the cost savings range from 30-80% (less in IT. Against this. IT provides a model for doing so. common to both ITO and BPO were:telecom quality and costs. my concerns are related to development of employees in BPO. the key issues.Conclusion: This is a descriptive report on BPO industry. Skills shortage in high value-added areas and process management skills will initially keep value-addition low relative to developed countries. firms weighed cost savings of 40-80%. lack of VC finance. VC and startup costs have disappeared. Challenge for developed economies is to produce enough high-end labor to leverage Indian BPO business. MNCs will be the drivers of future growth. can we have some standard industrial compensation package/ break-ups?? Five years ago. I have tried to cover almost everything related to the industry. the software services experience indicating how difficult this is. controlling attrition rate in BPO.Bangalore for IT and BP). Even at the end of this comprehensive report. . long ramp-up time due to government delays. more focus on higher-end work. The ability to absorb or independently develop higher-level skills remains unknown.
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