Call Center Outsourcing - Financial Implications
Call center outsourcing is proving to be one of the most successful ways to increase cost effectiveness. Companies like GE, American Express, Sprint, Dell, AOL, and Amazon illustrate this pattern. After outsourcing call center work to lower cost locations like India, these and many other Fortune 500 companies have improved cost effectiveness by upto 50 percent! In addition they have improved the quality of their customer support and satisfaction.
Many companies after observing the success of these businesses have been encouraged to follow. Global multi nationals are increasingly transferring parts of their business systems to offshore locations since costs are lower. Dramatic results have been observed especially in IT outsourcing where a cost reduction of 50-60 percent has been achieved. Lower labor costs, a plentiful and highly skilled work force, and increasing offshore capabilities by service providers in countries like India are the reasons behind this success. Consider some of these statistics.
In a talk on how the US will actually benefit from outsourcing rather than incur losses, Azim Premji, the chair man of Wipro, said that the US economy was projected to save about $11 billion from outsourcing to India in the current year. · "Indian IT professionals in the US spend $1.2 billion contributing to the domestic economy there. Indian firms paid over $350 million to the US social security in 2002-03 and this amount is expected to cross $1 billion in the next few years," he said.
In a recent report by Inductis, to understand the magnitude of the impact on the US economy of offshore outsourcing, figures showed that 8 billion dollars was saved over the last four years.
The Inductis report also showed that GE which employs 18,000 workers in India has seen a total savings of 350 million dollars a year.
Business Process Outsourcing (BPO) and offshoring is expected to grow substantially in the next five years. Approximately $300-400 billion of services will be moved offshore and/or outsourced. India's share in the outsourcing market is likely to be 2/3rd. Outsourcing reduces costs, increases capacity and enhances capability.
Many companies after observing the success of these businesses have been encouraged to follow. Global multi nationals are increasingly transferring parts of their business systems to offshore locations since costs are lower. Dramatic results have been observed especially in IT outsourcing where a cost reduction of 50-60 percent has been achieved. Lower labor costs, a plentiful and highly skilled work force, and increasing offshore capabilities by service providers in countries like India are the reasons behind this success. Consider some of these statistics.
In a talk on how the US will actually benefit from outsourcing rather than incur losses, Azim Premji, the chair man of Wipro, said that the US economy was projected to save about $11 billion from outsourcing to India in the current year. · "Indian IT professionals in the US spend $1.2 billion contributing to the domestic economy there. Indian firms paid over $350 million to the US social security in 2002-03 and this amount is expected to cross $1 billion in the next few years," he said.
In a recent report by Inductis, to understand the magnitude of the impact on the US economy of offshore outsourcing, figures showed that 8 billion dollars was saved over the last four years.
The Inductis report also showed that GE which employs 18,000 workers in India has seen a total savings of 350 million dollars a year.
Business Process Outsourcing (BPO) and offshoring is expected to grow substantially in the next five years. Approximately $300-400 billion of services will be moved offshore and/or outsourced. India's share in the outsourcing market is likely to be 2/3rd. Outsourcing reduces costs, increases capacity and enhances capability.
posted by Manoj Jain @ 12:47 AM
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