BPO companies show the sector has been quite resilient

The latest quarterly results of the BPO companies show the sector has been quite resilient in the face of multiple challenges: strengthening rupee, subprime problems and a possible demand slowdown in the US. However, high attrition rates, in excess of 50% in some cases, continue to be a serious concern for the industry. The listed BPOs that are delivering services primarily from India — Genpact, WNS, EXL and Firstsource — have notched up good sequential and year-on-year growth in revenue.

The bottom line, too, has grown well except in the case of WNS, which has taken a one-time hit due to its client mortgage lender First Magnus Financial Corporation going bankrupt. The BPO companies have managed to contain the currency risks largely through hedging. Genpact, for instance, is substantially hedged for its rupee costs for 2008 and 2009.

Geographical diversification has helped as well. Firstsource now has a better revenue split with the share of the US and UK coming down to 45% and 42% respectively, and that of India going up sharply to 13.2%. Most companies in the sector have even managed to improve operating margins.

BPO (Business Process Outsourcing) Resources & Guide

Outsourcing is contracting with another company or person to do a particular function. Almost every organization outsources in some way. Typically, the function being outsourced is considered non-core to the business. An insurance company, for example, might outsource its janitorial and landscaping operations to firms that specialize in those types of work since they are not related to insurance or strategic to the business. The outside firms that are providing the outsourcing services are third-party providers, or as they are more commonly called, service providers.

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The Internet Marketers Guide To Outsourcing. The Ultimate Guide To Outsourcing Is Here! Nuff Said.

Advantages of BPO

An important aspect of business process outsourcing is its ability to free corporate executives from some of their day-to-day process management responsibilities. Once a process is successfully outsourced, they get more time to, explore new revenue streams, accelerate other projects, and focus on their customers.

By outsourcing their back office operations to third world countries, companies have the following advantages:

Achieve cost reductions – this is made possible through process improvements, reengineering, and use of technologies that reduce and bring administrative and other costs under control.

Key in on company's main business – with the day-to-day back office operations taken care of, the management is free to impart more time to building the company's core businesses

Obtain outside expertise – Rather than recruiting and training personnel, BPO ensures that domain experts from another company provide the needed guidance and skills.

Meet constantly changing customer demands – many BPO vendors provide the management with flexible and scalable services to meet the customers’ changing requirements, and to support company acquisitions, consolidations, and joint ventures

Achieving revenue increases – by outsourcing non-core processes, companies can focus on increasing their sales and marketshare, develop new products, expand into new markets, and enhance customer service and satisfactions.

-source : offshoringtimes.com

Outsourcing Tips - When hiring or working with an outsourcer, follow these guidelines:

• Try fixing whatever's not working on your own first. You may have internal resources that can work better than you think.
• Carefully evaluate what really can be outsourced. Generally, projects that require team interaction or brainstorming don't work too well. Self-contained tasks or projects are more suited to outsourcing.
• Put in the time and effort, upfront, to find the specific expertise you need.
• Consider management costs. Sometimes services look good on paper but you end up eating the savings in training and oversight costs.
• Be prepared for challenges. It takes a while to build the relationship and synchronize the timing.
• Don't walk in blind. Start with some paid consulting, if need be, so you can ask the right questions in choosing a vendor and keep knowledgeable tabs on performance.
• If you outsource significant hunks of your operations, consider having a staff employee(s) to act as a liaison. You want to outsource functions but not accountability.
• Watch out for hidden costs. These may include paying layoff-related expenses, overtime costs for remaining employees who may now have more work to do, and telecommunications costs for remote workers.

Golden rule for BPO success

New Delhi, Feb. 1: The country’s software services and business process outsourcing (BPO) companies can realise $60 billion in export revenues by 2010 if they reduce operational costs and improve profitability, the National Association of Software and Service Companies (Nasscom) has said.

India is now the leading destination, having captured 65 per cent and 46 per cent of the global offshore IT and BPO markets respectively.
“As the market leader, it is imperative that we continue to set standards for the global industry. IT and BPO centres in India must now provide additional benefits such as speed, flexible operating models, innovation and productivity enhancements, which can be achieved by excelling in operations,” Nasscom president Kiran Karnik said.

outsourcing contract questions, why you want to buy bpo?

Outsourcing contract? You should be able to tell your prospective vendors:

What you want to buy;
How you want to measure results;
How you plan to manage the relationship;
The price you want to pay.

Protecting Buyers In A BPO Contract

Business Process Outsourcing (BPO) can give companies a decided advantage in today's marketplace. However, four legal issues have the power to derail an outsourcing contract's success. If buyers include legal protections in their outsourcing contracts, they can enjoy the advantages BPO outsourcing brings, according to attorney David Pace, a partner in the Dallas office of Arter & Hadden LLP.

BPO is growing because companies want to focus on their core businesses. Pace says there is a growing sense in today's marketplace that companies need to shed their ancillary processes. "Then they are not distracted from focusing on what they do for a living," he says.
BPO also provides an accounting advantage. If a buyer sells its plant and equipment to the outsourcer, these items disappear from the asset side of the balance sheet. Now there's no need to depreciate them over a number of years. Instead, these costs migrate to the expense side of the ledger as a cost of goods sold. Companies can deduct these expenses in the year they were taken, if it so chooses. Pace calls this "financial engineering."

Outsourcing a process also means the buyer no longer has to manage the head count. This is an attractive benefit in today's tight labor market. The unemployment rate in May was 4.1 percent. Recruiting and retaining talent in a tight market is difficult. The level of difficulty increases with the specialized knowledge required. The outsourcer, on the other hand, is adept at attracting the best and the brightest in its field.Outsourcing a process also means the buyer no longer has to manage the head count. This is an attractive benefit in today's tight labor market. The unemployment rate in May was 4.1 percent. Recruiting and retaining talent in a tight market is difficult. The level of difficulty increases with the specialized knowledge required. The outsourcer, on the other hand, is adept at attracting the best and the brightest in its field.

source and full story:
http://www.bpo-outsourcing-journal.com/jul2000-legal.html

Business Process Outsourcing CEO voted UK's top entrepreneur

Business Process Outsourcing CEO voted UK's top entrepreneur
In an interesting example of turnabout, Indian-born Dinesh Dhamija, Founder/CEO of Technovate, a Business Process Outsourcing (BPO) firm, has been named England's top entrepreneur by the country's leading monthly business magazine, Management Today. Technovate is a subsidiary of Europe's number one online travel agency, Ebookers.

Being in the travel industry, the company was hit hard by the aftermath of 9/11, but has bounced back even stronger than before, thanks to the BPO center in India. Dhamija cites two main reasons for their success: a low turnover rate in the Indian BPO center, and the European call center, with 40 native speakers offering service in nine languages.

Read the full article

BPO in insurance sector: Pains and prescription : White Papers

AbstractOutsourcing is not a new phenomenon or concept, and least of all, a fad. It arose out of the need of an individual, or any organization to get someone else to do a job which either they couldn’t do themselves, or chose not to. In fact insurance industry itself might have born out of the need to outsource one’s risks!
This white paper discusses about Business Process Outsourcing as it stands today focusing on future growth areas in the insurance sector. It gives an outlook of the key drivers, inhibitors, outsourced processes, latest trends and projections of outsourcing in insurance.
Authors: Balakrishna Ramani, Devendra Singh
Download this paper Source: wipro.com

IBM - From Business Machines to Business Methods

IBM's direction marks a shift from its storied history as a computer industry bellwether. For decades, IBM concentrated on machines to carry out accounting and computing tasks. IBM was behind the curve on the emergence of the personal computer, and though it later gained ground against companies like Apple Computer, IBM was slow to adapt to the changes it brought in the marketplace. By 1993, the company's annual net losses reached a record $8 billion. Lou Gerstner, who took the reins of the company in 1993, is credited with emphasizing services as a key to the company's turnaround. Nearly half of IBM's $89 billion in revenue last year came from its services unit. (Gerstner's turnaround strategy is highlighted in a new book from Nightly Business Report and Knowledge@Wharton titled, "Lasting Leadership: What You Can Learn from the Top 25 Business People of Our Times.")
IBM became a leader in IT outsourcing, which refers to a company farming out work such as managing central computer centers or handling technical support calls. Big Blue began extending its services reach from the technology arena to business tasks about the time the company acquired the consulting wing of accounting giant PricewaterhouseCoopers, in late 2002. The roughly $3.9 billion deal was a landmark move. IBM combined the roughly 30,000 employees from PwC Consulting with about 30,000 IBM workers to form a new division called Business Consulting Services. The idea behind the acquisition and new unit was to generate revenue by joining IBM's technology prowess with PwC Consulting's business expertise. Analysts say the PwC Consulting deal has helped IBM compete in the BPO arena.

source and courtesy: http://knowledge.wharton.upenn.edu