BPO (Business Process Outsourcing) Blog

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Monday, March 27, 2006

Risks of outsourcing have been described below:

• Loss of expertise: Customers may lose the expertise and knowledge of carrying out the outsourced processes with time.

• Loss of control: Companies perceive the risk of losing control over the operations of their processes. Also, if the (trained) employees in the vendor firm leave the job, the buyer may be at risk.

• Financial instability of the vendor: If the vendor becomes financially unstable in some years, the buyer will have to search another vendor; the operations being at risk, if it does not search the new vendor fast.

Pressure to lower costs: BPO

Pressure to lower costs: Companies are facing huge competition from their competitors to provide better services, and at the same time lower their costs. Companies are constantly innovating the way they are conducting businesses and BPO allows them to partner with external specialized vendors for efficient operations. Offshore BPO is cheaper than onshore BPO and many companies are now moving their operations to offshore locations, India being the most preferred destination.

Thursday, March 23, 2006

Growth of Indian BPO Industry

According to studies conducted by NASSCOM and leading business Intelligence Company, McKinsey & Co. the Indian IT/BPO segment is expected to employ over 1.1 million Indians by the year 2008. Market research shows that in terms of job creation, the ITES-BPO industry is growing at over 50 percent. In the financial year 2003-2004, ITES-BPO companies were the largest recruiters in the IT/ITES sector, adding a total of about 70,000 jobs.

An estimated 70,000 new Jobs expected in 2005 in the field pf ITES. Plus there will be additional hiring to replace industry attrition that is around 25%. On the other hand BPO and outsourcing services would generate around 1, 25,000 new Jobs in 2005. McKinsey & Co. predicts global market for IT-enabled services to be over $140 billion by 2008. In that the opportunity for India will be around $ 17 Billion.

BPO Call Center : Employer Expectations

Most organisations today are under great pressure to keep costs of operation to a minimum. In the past, call centres were always seen as cost centres, a necessary evil that had to be tolerated to enable customers' calls to be managed effectively. This emphasis on low cost operations persists to this day, and today causes organisations to encourage customers to use self-service channels.

However, some organisations are now realising that with 80 percent of all customer contacts being managed by the contact centre, there is great potential for the contact centre to be very strategic in long-term customer retention. And with sales functions in the contact centre, it is increasingly becoming a profit centre.

With this recognition comes the pressure on contact centre managers to maintain target service levels in response time while the pressure to manage ongoing costs remains.

A major trend which is emerging in response to these pressures is the multiskilling of agents. Multiskilling (depending on the skills) results in:
a higher percentage of contacts resolved at the first point;
the ability to vary the tasks assigned to agents; and
the ability to utilise the time when an agent is not on the phone to do other productive work, thus reducing overall costs.

Tuesday, March 21, 2006

Book Keeping BPO India

This includes the maintenance of account books typically. The client provides scanned copies of documents such as bank and credit card statements, invoices and bills, payroll summary, payment vouchers, etc. These services can be provided on a daily, weekly, monthly, quarterly or annual basis as per the clients' requirements. Preparing financial statements is an extension of the bookkeeping function. The clients sometimes maintain books of accounts themselves and would like to get the financial statements prepared by a professional. These statements are prepared using US GAAP and other relevant accounting and auditing standards.

BPO: You might be surprised to know...

You might be surprised to know that some of the best people management practices and employee facilities are being rolled out in the BPO industry. Right from the basics such as home pick-up and drops and 24/7 cafeterias; to more interesting areas such as regular parties, picnics, strong rewards and recognition programmes, career counselling, etc, are all being provided by leading BPOs.

BPO currently...

Currently, most of the work being outsourced to India is not very high end. It is typically transaction-oriented work in back-office or scripted, repeatable, definable work in customer support. However, as India matures as a location for BPO delivery

Various roles in BPO

Within these functional areas, there are various roles, responsibilities and positions available:

> Customer service professionals/Representatives/Agents

> Team leaders/Supervisors

> Quality coaches/Quality controllers/Quality assurance supervisors

> Voice/Accent/Culture trainers

> Product and process trainers

> Account managers/Client relationship managers

> Project managers/Migration executives

> Shift supervisors/Managers

> Process leaders/Programme managers

> Quality managers/Operations managers

Do data entry from home at your own convenience..

The kind of data entry you have to do could vary from accounting information or medical information to creating of lists and labels. All companies have begun outsourcing such repetitive jobs and this could prove to be a boon for you.

The information that is given for data entry is usually a hard copy, which needs to be converted to an electronic format. This data when stored in the computer is accessible to the whole company. Before you get started, you need to do some spadework. First find out whether the kind of money you get is worth the time and effort you put in. There are books and courses, which could assist you in this. You could contact mailing companies or secretarial services or any other services available locally. If you can get hold of some reputable websites there is nothing like it.

So what do you require to start your home-based data entry work with? The first thing is to find a suitable PC and a medium to keep in touch with the company or companies you are dealing with. The Internet is a must. Some experience and good typing skills go a long way. The ability to comprehend bad handwriting, ensure accuracy and the ability to set right simple errors are absolutely essential. If you have a vehicle it is good news because you would need to pick up the work from the companys premises. If you are starting a business as such remember you have to register and get a license to operate. Distribution of Professional business cards and brochures tend to help you get more contracts.

Work At Home Data Entry Workers Are A Growing Number

Work at home data entry processors ensure efficient handling of information for companies with a small general work force.

Work at home date entry workers are ever expanding in the nation’s labor force. According to the 2000 Census, over 4 million people over the age of 16 work at home. Data entry workers are a significant portion of that group. Many employers are experiencing the need to subcontract out work to self-employed workers since the number of data entry people is declining. Job prospects for work at home data entry workers should be excellent in the years to come.

Friday, March 17, 2006

Interview Tips for BPO Applicants

Prepare yourself in the following:

# Grammar and Reading Comprehension

# Numerical & Analytical ability, Percentage, Profit & Loss, Proportions

# Attention to Details, Rule based processing

# Typing test – see & Type or Listen & Type

# Enter data in a scanned paper form onto fields on the PC

# Listen to a native English Speaker and answer questions based on the conversation

# Accent and Voice Clarity

# Fluency and Grammar

# Composing an email for a given business scenario

# Ability to hear and produce sounds

Thursday, March 16, 2006

Some of the highly specialized career options in BPO

As companies expand both in employee strength and range of services provides, they need experts in various fields. Some of the highly specialized career options now available are:

Transition managers - these are experts in Project Management. The role of transition managers is to help migration of the function from overseas locations to the offshore location. This involves understanding the existing process, determining the best migration methodology and overseeing the migration project.

Six Sigma and Process Re-engineering experts - One of the most significant non-cost benefits of outsourcing is the opportunity to re-engineer the process - thereby improving the process and/ or deriving further cost saves. By undertaking various projects, Six Sigma and Process re-engineering experts play the key role in this.

Relationship Managers - This is typically a middle/ senior management role in any outsourcing company. These managers are the single point of contact for the client, and their responsibilities sometimes span across teams and departments.

Monday, March 13, 2006

BPO & Life

The flourishing ITES-BPO industry is creating islands of prosperity throwing up new economic and social challenges, cautions Harish Bijoor.

Four-letter words are out of fashion. Three-letter words are in. Three-letter words such as BPO and WTO attract a great degree of passion.

Throw any of these words at consumers across the globe, and you have passionately fizzy reaction! Depending upon which side of the business you are on, the fizz is negative or positive! At times both!

The BPO revolution that has hit the shores of India is throwing up its own set of challenges, internal and external. The buzz is palpable in the metros of Delhi-Noida-Gurgaon (should we not fuse the three?), Bangalore, Mumbai, Hyderabad, Chennai, Pune and Kolkata, in that order. It cuts through thick. These early adopter BPO towns are islands of early prosperity that stand out like sore thumbs in the Indian landscape.

Saturday, March 11, 2006

Globally a $40-$60 billion industry, the HR BPO segment..

Globally a $40-$60 billion industry, the HR BPO segment is still a fledgling in the Indian BPO industry. Yet to take off in a big way, it is however poised to be the next big thing in the BPO space. The opportunities are undoubtedly immense, with the global market growing at 14 percent per annum. The HR BPO industry could be divided into two categories—large multinational players such as Hewitt with an outsourcing centre in India, and secondly the pool of small outsourcers that cater to the local market (engaged in payroll processing). Midway are the few established third-party outsourcers who serve international clients.

The history of HR outsourcing (HRO) industry can be traced back to more than five decades, when ADP (Automatic Data Processing) set up its payroll processing services in the US. Today, the company has annual revenues of $7 billion and 40,000 associates. Global HR BPO players like Hewitt and Fidelity have set up operations in India. Chennai-based Secova eServices is the first third-party Indian HR BPO organisation in the country. V Chandrasekaran, Co-Founder and Chief Technology Officer, Secova eServices says, “At present the Indian share of the pie is a mere $43 million, according to Nasscom, which is insignificant compared to the overall opportunity.”

Healthcare BPO to India

High costs and obsolete processes are driving US healthcare companies to offshore work. Estimated opportunity: $4.5 billion by 2008 employing about 200,000 people.

Already, over a dozen companies are either consolidating operations or have kicked off pilots in this space. The opportunity: $4.5 billion by 2008 offering employment to about 200,000 people, according to Nasscom. The companies include Apollo Health Street (AHS), iHealthcare, Paramount Healthcare, Hinduja TMT, Ajuba, Affiliated Computer Services, Cognizant Technology Solutions and Vision Healthsource.

The American Healthcare Association estimates the profitability of US hospitals fell from 6.1% six years ago to 2.8% in 2002. Forty per cent of the US hospitals make losses: for every healthcare dollar spent, 21 cents go in administration and 11 cents in fraud due to overstating of expenses. The average margins for publicly traded healthcare firms were 4.4% in 2002. For medical insurance companies, they were a thin 2%. State-owned insurer Medicare had $20 million in liabilities.

So while other BPO work - in banking, telecom, retail, utilities, financial services et al - grew by leaps and bounds, medical transcription wrote its own epitaph. However, thanks to inefficiencies in the $1.4-trillion US healthcare industry, BPO work in healthcare is set to get a new lease of life. And no, it's not medical transcription resurrected, but a whole new range of processes that fetch returns of $16-18 per person per hour at the top end. These include medical billing, disease coding, forms processing and claims adjudication.

Wednesday, March 08, 2006

BPO: Back-Office Operations being outosourced to India

Accounting: processing accounts payable, accounts receivable or general ledger
Hardware maintenance
Internal auditing
Benefits management
Benefits administration
Health & Welfare administration
Defined Contribution/ Defined Benefit administration and customer service
Health claims administration
401(k) plan record-keeping
Human resources
Asset management and staffing
- supplement your existing e-business staff
- access both management and technical assistance on a long term or monthly basis

Data conversion

Data conversion is a necessity in this age of information as information is vital in any organization. For an organization to function effectively, data needs to be easily accessible.

The need for data conversion
The need for data conversion is at a peak now as there are several processes and challenges present in any enterprise: mergers, acquisitions and new technology developments. The accessibility, quality and diversity of information that a firm has at its disposal is becoming increasingly important to customers. Some of the reasons why data conversion is important are:

Sheer volume of information makes it difficult to manage
Multiple destinations
Multiple input formats
Inconsistent styles
Complexity of data

Tuesday, March 07, 2006

New Incentives for establishing call center in India

The recently announced EXIM Policy 2003 has something for both IT services and ITES companies in the country. The Government, this year, has attempted to remove some of the existing procedural deterrents and anomalies that have been standing in the way of software exporting organizations. The idea is de-regulate the software and ITES market even further and create a world class business environment, where the industry can gain momentum.

Some of the key changes the policy has brought into the software and ITES export environments are as follows:

Liberalized import of consumables, office and professional equipment, spares and furniture up to 10 percent of the average of the last three years' export earnings

Provided incentives for the diversification into software under the EPCG scheme. Existing manufacturer exporters will be allowed to fulfill export obligations arising out of import of Capital Goods under the EPCG Scheme for setting up of Software and ITES units through the export of manufactured goods of the same company

Accelerated the rate of depreciation to allow the hardware and software sectors to remain state-of-the-art

Allowed for the easy disposal of used PCs and hardware by removing procedural formalities governing the destruction of obsolete hardware

Created incentives for status holders who achieve high growth rate in their exports (25 percent or more and minimum export performance of Rs. 25 crore). It is proposed to give a duty free entitlement to them for import of capital goods, spares, office equipment and consumables

Simplified the procedures and formalities applicable to status holders amongst STP units. This should facilitate free movement of laptop, computer and other professional equipment and provide the required flexibility to the software professionals

Process Immaturity: BPO

Process Immaturity: This point focuses on one of the objectives of BPO, i.e. process efficiency at reduced costs of ownership. It reflects simple rules that traditionally, organizations used to apply to BPO, viz.

• Outsource mature, non-core processes
• To specialized providers
• To achieve cost savings and
• Improve management focus

Monday, March 06, 2006

BPO: Myths & Reality

BPO is another dotcom phenomena and all the euphoria is going to be short-lived, with the current boom ending in a bust.

BPO is a well-established industry built on solid infrastructure of people, processes and technology than the marketing hype that drove the dotcom boom.

As the BPO euphoria dies down, most jobs will be at risk and are likely to get eliminated.

BPOs have existed in the Western world for many years, employing a phenomenal three per cent of the US and UK working population. It's highly improbable that the current jobs being created in India will be eliminated.

There are limited career opportunities within the call centre/BPO industry; roles are limited to customer service agents and team leaders.

The BPO industry offers a huge range of job roles in varied functions like quality, human resource, finance, IT, project management, training, facilities management, etc.

Friday, March 03, 2006

India Will Generate $13.8 Billion From Offshore BPO Exports in 2007

The offshore business process outsourcing services will represent 14 percent of the total BPO market by 2007; India's share of supply will be around 57 percent says sources.

US President, George Bush rules out protectionism to check BPO effect

Washington: Hailing India’s economic progress, US President George W Bush on Wednesday said it needed to do more on liberalisation and lifting caps on foreign investment even as he ruled out any protectionist measures to check the adverse effect of outsourcing on his country.

Just over a week ahead of his visit, he said the expansion of India’s economy would mean "greater stability" for the South Asian region besides bigger market for America’s businesses, workers and farmers.

"The area of America’s relationship with India that seems to receive the most attention is outsourcing," Bush said addressing the Asian community.

"It is true that a number of Americans have lost jobs because companies have shifted operations to India," he said, adding losing a job was "traumatic" and "difficult" as it put strain on "our families."

"But rather than respond with protectionist policies, I believe it makes sense to respond with educational policies to make sure that our workers are skilled for the jobs of the 21st century," he said.

The BPO industry generated only 300,000 jobs a year against the 10 million

The BPO industry generated only 300,000 jobs a year against the 10 million required annually to counter unemployment.

"India needs to generate 10 million jobs each year to counter growing unemployment and to build a world level skilled work force. However, merely three lakh (300,000) jobs are being created through outsourcing by foreign companies in the IT sector here.