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j m





 

(m) is a subset
of outsourcing that involves the contracting of the
operations and responsibilities of specific business
functions (or processes) to a third-party service provider.

j xarner Dataquest defines business process outsourcing

as the delegation of one or more IT-intensive business
processes to an external provider who, in turn, owns,
administrates and manages the selection processes
based on defined and measurable performance metrics.
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jTechnology

jBusiness processes

jExpertise
@

  
 

jThe lack of existing skills to complete a process

jTo replace a poor internal service (may not be connected to lack of skills)

jResources are not available in house to complete the process

jThe process is difficult to manage (in general or due to business growth)

jThe process may be performed better and cheaper by other services

jDo not have to worry about continually introducing new technologies

›   




   

  



jInfrastructure

jxlobal delivery capacity

jVertical market and process expertise

jChange management

jProject management and outsourcing relationship management expertise

 COMPETITIO

REVE UE ADVA CE
MAXIMIZATIO TECH OLOx

›Ix IFICA CE ›ATI››F
I x

MORE OF CU›TOMER
CO CE TRATIO
BPO EED

IMPROVEME T REDUCTIO
I BU›I E›› OF CO›T

FLEXIBILIT

›


 

  



 
Business process outsourcing makes good strategic sense in a number of
instances

jAn activity can be performed better or more cheaply by outside specialists

jThe activity is not crucial to the firms ability to achieve sustainable

competitive advantage and wont hollow out its core competencies
capabilities or technical know-how. Outsourcing of maintenance services has
become common place

jBPO produces the company risk exposure to changing technology and

changing buyer preferences

jBPO streamlines company operations in ways that improve organizational

flexibility cut cycle time speed decision making and reduce co-ordination
costs.

jBPO allows company to concentrate on its core business and do what it

does best.
›



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Customer service and sales

Finance and accounting

Financial services

Insurance

an ing

Securit

dministration
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BPO can be classified as :

j Voice BPO i.e. call centers
j on-voice BPO
 



j i     is an umbrella term that refers to
reservations centers, help desks, information lines or
customer service centers, regardless of how they are
organized or what types of transactions they handle.
j refers to a à  
à
j includes customer support, operator services, directory
assistance, multilingual customer support, credit
services, card services, telemarketing, interactive voice
response and web-based services.
˜ 
 
  

jInbound call centre's

jOutbound call centre's

jWeb enabled call centre's

jCRM call centre's

jPhone call centre's

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 à
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Customer service etwork Billing services Compensation Direct and Indirect Legal services
management and and payroll procurement and
Telesales xeneral Transcription
maintenance services purchasing
Accounting and Translation
Market Research &
Application Hiring and Tender
Promotion Accounts payable Healthcare &
Development Recruitment management
Pharmaceutical
Customer support Accounts
Implementation Workforce ›upply chain / Drug
receivable
Customer research services Training and management Management
and surveys Financial development
Packaged R&D
(customer Reporting
application Performance
feedback) Data analytics,
outsourcing Auditing and management
mining and/or
Outbound data Compliance
Infrastructure management
capturing and data
outsourcing e.g. Tax
cleaning ›hared
hosting, storage
Asset ›ervices
Web marketing
Website design & Management
IT Helpdesk development
›ecurities
Emergency Document
Debt Collection
›ervices management
Business
Continuity/ DR
@ 
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These are the Business Processes, which are

outsourced and are not related to direct
telephonic or response services.
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Call centre's

Medical transcription

Content development

Insurance claims processing

Data conversion

Back office operations

Deposition summary

xeographical information systems

RE
FACTOR› THAT WILL DETERMI E WHETHER THE COMPA
›HOULD
actually xO FOR OUT›OURCI x ,will be

jTo market the size

jRate of market growth for firm
jComplexity in manufacturing its product
jIntroduction of new product based on technologies
jThe emergence of competent supply sources
jWillingness of the company to adopt practices

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jTo move towards development of cooperatives
jLong term buyer supplier relationship
j›trategic long term partnerships.
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j India has revenues of U›.9 billion from offshore BPO and U›
billion from IT and total BPO (expected in F
). India thus has
some 5-6% share of the total BPO Industry, but a commanding 6%
share of the offshore component. This 6% is a drop from the 7%
offshore share that India enjoyed last year: despite the industry
growing % in India last year, other locations like Philippines,
and ›outh Africa have emerged to take a share of the market.

j China is also trying to grow from a very small base in this industry.

j However, while the BPO industry is expected to continue to grow in

India, its market share of the offshore piece is expected to decline.

 
j The top five Indian BPO exporters for 9-
according to A››COM are xenpact, TC›
BPO, W › xlobal ›ervices, Wipro BPO, and
Aegis Ltd.
j According to management consultancy McRinsey
& Co., the global "addressable" BPO market is
worth   54 billion, of which: 5-4 retail
banking, 5-5 insurance, - travel/hospitality,
- auto, - telecoms,  pharma, -5
others and -5 is finance, accounting and HR.

m


 
  


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Cost savings are about -5% over the U› operations but wages are
more than % in India

i#ii

Canada's advantage is low real estate prices and salaries as compared

to U› but they are as compared to India

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They are having an adage because their time zones are similar to the
U› and close to U›. Also labor costs are low but proficiency in English is
poor and skill levels vary. Thus scalability is major concern.
#i

China¶s greatest strength is low cost labor [similar to India} which attracts
more companies with high volume work and transaction based business
process.

"i i

›outh Africa is emerging as a hot BPO destinations because it has a time

zone compatible with Europe and a 7 million strong labor pool {compared
to India's 7 million} the government support to BPO activities and a
robust English based education system are attractive propositions for U›
firms to move to this nation


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2  
 


A huge pool of computer literate graduate manpower

Cost effectiveness workforce

›econd largest English speaking populations

xeographical location and the resultant time difference

encouraging attitude of the government

Tax incentives

Attrition rate is lower

ÿ 



Infrastructure bottlenecks

Poor telecom facilities in country could scuttle the tele-work opportunity

›ecurity concerns bottlenecks

Telecom is not fully liberalized in India call centers are dependent on dot only
for providing connection to the international IPLC

There are certain procedural bottlenecks such as getting clearances and local
loops set-up is a major challenge.

  

World bank confirmed India as their number one choice of vendors for
outsourcing compared to other Asian counterparts

More than 9% us companies outsource one or more activities.

% of the us companies ranked India as their first choice for software
outsourcing

Of the  software companies in the world that have achieved the prestigious
›EI-CMM level 5, 5 of them are Indian




A change in the curriculum in the universities and technical colleges is required

Due to worldwide economic recession there is a possibility of cheaper

destinations than India for BPO

Competitions from other countries like Canada, Philippines , Mexico, Ireland

china etc

There are voices of discontent that are being heard in the us for instance a bill
has been tabled in new jersey senate if passed might restrict the public
companies from being outsourced to India
i

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m

 
 ) % 


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i#

Philippines understand the U› market more expensive

low attrition than India , small
voice work pool talent

Canada ,Ireland and understand the us and high costs

Australia high end skills

›outh Africa time zone similar to Europe skill shortage

cost savings

China low costs no English

capability

Russia, Ukraine technology skills poor infrastructure,

language
m
2


jThe BPO market is expanding

jBPO market is growing but not fast as expected

jDevelopment of BPO depends on it outsourcing

jBPO has become more complex

jTechnology management is moving into the hands of the process based

management organizations.

jCompanies are doing BPO or are not even planning to do so

jBPO staff will come from numerous sources

jBPO will evolve differently from ITO

jBPO expansion is going to be infinite

""  #
CA›E ›TUD

j 

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 à
*  +
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˜  

j Business Process Outsourcing subsidiary of Infosys Technologies, was set

up in April . Today, it is ranked among the leading BPO companies in
India by A››COM, Dataquest, the International Association of Outsourcing
Professionals, Red Herring, FAO Today, elsonHall, and others.

j 
) " $    à 

à%    the company
formed with the merger of T-Mobile and Orange was looking to structurally
reduce the cost of its business operations while retaining focus on its core
activities. The scope of the outsourcing initiative included various processes
in the finance directorate. Lack of prior exposure to outsourcing and time
constraints posed as major challenges. Rapid and noise-free transition
coupled with a deep understanding of client business drivers enabled Infosys
BPO to add value to the T-Mobile's processes.

j This Case ›tudy demonstrate clients focus to derive continued business

value through collaborative partnership with Infosys BPO.