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V Form of outsourcing that involves the contracting of the operations and
responsibilities of specific business functions (or processes) to a third-party
service provider.
V Originally, this was associated with manufacturing
firms, such as Coca Cola that outsourced large segments of its supply
chain. In the contemporary context, it is primarily used to refer to the
outsourcing of services.
V BPO that is contracted outside a company's country is called offshore
outsourcing.
V BPO that is contracted to a company's neighboring (or nearby) country is
called near shore outsourcing.

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V Start up operations with greater speed
V Ensure uniformity of management practices across the globe
V Tap into alternative sources of revenue
V Have more consistent training practices.

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V jusiness administration
V Supply chain management, and
V Customer service, sales and marketing.

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× Customer Support Services
× Technical Support Services
× Telemarketing Services
× Employee IT Help-desk Services
× Insurance Processing
× Data Entry Services / Data Processing Services
× Data Conversion Services
× Scanning, OCR with Editing & Indexing Services
× jook Keeping and Accounting Services
× Form Processing Services
× Internet / Online / Web Research

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V Companies seeking to outsource their business processes
to external parties need to evaluate them thoroughly before
they begin operations Ȃ as most jPO activities tend to have
maximum benefit to the outsourcing organization when
they have a degree of continuity.

V This continuity is derived from long-term partnerships. The

service provider goes through a learning curve before
efficiencies and effectiveness in managing and
implementing the set of processes set in.

V Unlike other outsourced activities such as application

development or system integration that tend to be project
based and relatively short term, jPO is a long-term
undertaking with contracts lasting several years.
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V  percent of BPO contracts are for 5-10 years
V 25 percent for three-to-five years. This is mainly because of the high
cost of switching between vendors.
V In addition, renewal rates are high. According to vendor responses to
the Gartner survey, nearly 90 percent of contracts are renewed, with
only a 10 percent rate of non-renewals.

V Companies that outsource their business process also have to decide

what the nature and extent of the relationship with their service provider
will be. To what extent are they going to outsource ± will it be purely on
a transactional basis, or will it be more of a long-term project?

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V India's BPO industry is at a significant turning point. Over the last five to
six years the industry has grown faster than the IT services industry to
achieve USD 11 billion revenues by 2008.
V Next 10 to 15 years can be fundamentally different from the last 5
years. A number of demand and supply side factors are likely to alter
the industry¶s growth trajectory.

V For e.g. on the demand side, the global economic crisis and changing
socio-economic, demographic and environmental landscape are going
to redefine the addressable opportunity.
On the supply side, increasing competition from other low cost
countries, shortage of talent and need for new business models are
likely to affect the industry significantly.

V It is therefore imperative for BPO customers and providers to

understand the impact of these factors and transform their approach
and business models accordingly.

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Figures in $ billion  ! Nasscom

V India's domestic jPO market, with nearly 500 players, is

set to grow at a CAGR of 33.3 per cent to touch revenues of
$6.82 billion by 2013, up from $1.62 billion recorded in
2008.

V the jPO market around the globe is around $300-544

billion, of which $20 billion will be India's share by the
year 2008.

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According to Nasscom, total IT-BPO clocked (or will
clock)

V 2007-08: $52 billion (growth of 28%).

$40.4 b from exports & $11.6 domestic.

Of the exports, IT grew by 28% to 23.1 b jPO exports went

up by 30% to $10.9 b
V 2008-09*: $62-64 billion
V 2010*: 110 billion

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V Cost and quality benefits play a positive role in making India a choice
destination for outsourcing of technology.
V According to a study conducted by Forrester Research in November,
2001, India¶s edge over other competing nations in the IT outsourcing
and remote development business is based on the
1. country¶s decade old experience in this area.
2. Fluency in the English language
. Corporate friendly atmosphere created by liberal policies of the
Government.

V Today, there is a greater focus by MNCs on the Indian IT outsourcing

and remote development market. A large number of companies are
1. outsourcing their software development to Indian companies.
2. Others are establishing a presence in India and participating actively in
the software export arena.
V India can be an ideal offshore destination for remote development,
remote programming and IT outsourcing.
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V Going forward, China and Philippines can emerge as serious

competitors to India.
jesides the low cost of labour, the other factors influencing
companies to outsource to India are the superior quality and
low turnover rates as compared to other countries.

V Over the last decade or so India has seen a quantum

improvement in terms of its technical, technological, and
telecommunications infrastructure.

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ÈProven expertise in ÈEnglish speaking workforce

IT related services ÈHighly skilled,
ÈIPCL and other telecom IT savvy workers
cost going down. ÈStrong work ethics
ÈPrivate players in telecom ÈHigh level of education
and Internet service[ ÈCosmopolitan culture

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V Soaring revenues, increasing job opportunities, changes in life
style, excellent growth prospects and a global footprint - the
Indian jPO/ITES industry has achieved it all. Currently sized
at $2.3 billion, the Indian jPO and ITES business in the
country has been pegged at $21-$24 billion by 2008. Some of
the key factors that have led to this unprecedented success
are:
V Financial jenefit - Cost Arbitrage
V Process Maturity and Delivery Capabilities
V Human Resources
V Government Support

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In order to sustain its success, the Indian BPO/ITES
industry needs to concentrate on  " like
o avoidance of price war,
o acquisition of domain knowledge,
o growing from low margin businesses to high margin
businesses (Analytics, Financial Management, etc.) and
o leveraging existing IT off shoring services for cross
selling to existing clients.

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1. Facility Location
2. Telecommunication Infrastructure
3. Financial Requirements
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1. High Attrition rates
2. Recruitment Strategies
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1. Estimation Techniques
2. Process Maturity

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× Key Process Challenges
× Effective Practice for Improving Responsiveness
× Process Improvement
× Improving Quality and Accuracy
× Cost-Effective Training
× Retention
× Organization Structure
× End-User Satisfaction
× Managing Client Relationship
× Strategies to Increase jusiness.

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