MANAGEMENT INFORMATION SYSTEM

Third Year Information Technology

Part 19 Business Process Outsourcing

Tushar B Kute,Sandip Institute of Technology and Research Centre, Nashikhttp://www.tusharkute.com

WHAT IS BPO?

Business process outsourcing (BPO) is the contracting of a specific business task, such as human resources and customer service, to a third-party service provider.

This allows companies to focus on their core business processes.

BPO is implemented as a cost-saving measure for tasks that a company requires.

AIMS

Cost reduction Productivity Growth Innovation

MOTIVATING FACTORS

Cost advantage Superior competency Utilization improvement Economy of scale Business risk mitigation

TOP 5 OUTSOURCING OBJECTIVES

12%

29%

35%

91%

85%

0% 20% 40% 60% 80% 100%

De-risk the business

Achieve high productivity

Improved Operational Quality

Reduced Costs

Focus on Core Activity

% Respondents

BPO CATEGORIES

It is often divided into two categories: Back Office Outsourcing which includes

internal business functions such as billing or purchasing.

Front Office Outsourcing which includes customer-related services such as marketing or tech support.

KEY TERMS

Offshore Outsourcing is BPO that is contracted outside a company's own country.

Nearshore Outsourcing is BPO that is contracted to a company's neighboring country.

Onshore Outsourcing is BPO that is contracted with the company's own country.

EXAMPLES

Coca-Cola – SCM Bank of America – Exult British Airways – WNS Infosys – Progeon Satyam – Nipuna IBM – Daksh EDS – MphasiS HCL, Patni, Accenture, Dell etc.

TOP 5 INDIAN BPO EXPORTERS

Genpact, TCS BPO, WNS Global Services, Wipro BPO, Aegis Ltd..

IMPACT OF BPO

According to management consultancy McKinsey & Co., the global "addressable" BPO market is worth $122 – $154 billion, of which: 35-40 retail banking, 25-35 insurance, 10-12 travel/hospitality, 10-12 auto, 8-10 telecoms, 8 pharma, 10-15 others and 2-5 is finance, accounting and HR

DIFFERENCE BETWEEN VOICE /NON VOICE BPO

Voice deals with speaking directly with the customers either in US / UK /in other countries.

Communication level should be higher when applying for a voice process.

Non voice includes more on data entry, data management , E-mail writing.

CALL CENTERS

A call centre is a centralized office used for the purpose of receiving and transmitting a large volume of requests by telephone.

A call centre is operated by a company to administer incoming product support or information inquiries from consumers.

Outgoing calls for telemarketing, clientele, product services, and debt collection are also made.

NATURE OF WORK

Call centers are voice or web based. Either in bound or out bound where in

calls are received from and made to the customer respectively.

Specialized in business processing, here calls are made from company to company.

Areas addressed by call centers are sales support, reservations ,bank accounts and telemarketing.

INBOUND CALL CENTERS

In bound call centers provide support function that include inquiries or help desks for various segments.

Most of the call centers are offering customer relationship management services that include support for Voice call center, E-mail response, Web-based text services and Backroom processing.

OUT BOUND CALL CENTERS

Out bound call centers provide services for customer contact, to interact with international clients either on the help- desk make collection calls which include market surveys information and telemarketing.

NON VOICED CALL CENTERS

Data entry This requires updating, organizing data

base on various details of customers and clients.

Transaction processing: Answering customers

Queries, enquiries and responding to the complaints over the E-Mail

CALL CENTERS

WORKING CONDITIONS WITH BPO

To work in a BPO you must be prepared for the challenging job, which would also require you to work during non morning hours (night shifts)

Because the clients are mainly from U.K, U.S and European countries

CALL CENTER EXPECTS

Call center interview depends on Computer knowledge Communication skills in English Keyboard skill Mathematical skill etc.

IMPORTANT AREAS OF TRAINING

Accent training Listening skills Telephone etiquette Tele sales Customer Relationship and Call center terminology.

BPO SOLUTION

World-class offshore outsourcing and consulting services specializing in IT- enabled services

Back office outsourcing services BPO solutions from India guaranteed to

cut costs and improve quality

BPO /ITES

BPO industry in India has been estimated to grow very fast

As the attrition rate is significantly high in the BPO /ITES industry

BPOs are realizing that their HR policies need to be transparent and clear

BPO TO INDIA

Indian revenues from BPO are estimated to have grown 107% to $ 583 million.

Leading Competitors:- Philippines, Mexico, Canada, China

and Ireland. 67-72% of costs to call centers operating

in the US/UK is directly linked to man power costs. India only spends 33-40% of costs on man power. This includes training, benefits and other incentives for labor.

INDIA’S COMPELLING ADVANTAGE

India 38%China 6%

Mexico 5%Ireland 5%Canada 5%

Malaysia 4%Philippines 4%

Russia 4%Singapore 4%

Survey respondents shows the following outsourcing destination:

India has transformed into the global outsourcing center of choice.

It employs world class technology and efficient delivery mechanisms to ensure that clients get cost effective solutions for all their BPO needs.

And more ………

Source: Computer world and InterUnity Group Inc., Concord

CALL CENTERS IN INDIA

TOP DRIVERS OF OUTSOURCING INDIA Two million graduates each year (Existing Pool: over

25 million) 120,000 Engineers every year vs. 63000 in US English speaking and IT savvy workforce Cost reduction up to 50% Government support for IT and BPO industry Improving telecom infrastructure Lower infrastructure costs Favourable time lag: 12 hours with US & 5 hours with

Europe Overnight turnarounds possible Resources with experience of financial and legal

systems similar to the west Strong domestic IT services industry to support IT

led BPO

ADVANTAGES OF BPO

Enhances flexibility of organization Cost reduction and speeds up the

process Create competitive edge Reduces capital investment Reduces requirement of manpower Helps in business organization Increased capability of organization

DEMERITS OF BPO

Data security and privacy issues due to malpractices followed in the BPO company.

Fear of job loss by the locals.

CHALLENGES TO THE BPO

Failure to meet service levels Vague contracts Changing requirements in the current

market Unpredictable changes Improper planning which leads to

vendor dependency.

REFERENCES

Arpita Gopal, Chandrani Singh, “e-World Emerging

Trends in Information Technology” , 1st Edition, Excel Books.

Tushar B Kute,Sandip Institute of Technology and Research Centre, Nashikhttp://www.tusharkute.com