| Business Process Outsourcing- Improving Processes, Cutting costs and Enhancing Business Productivity |
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| Business process outsourcing is otherwise known as BPO and it is a process of hiring a third party to carry out the non-core business functions of a company. It is simply the process of shifting a company's internal process to an external service provider that might have a different geographical location. |
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| Major Areas of Business Process Outsourcing |
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| Business process outsourcing is not a new concept, since a few decades ago manufacturing units were outsourced by the parent companies. Shoe making was one of the earliest jobs to be outsourced. After that back office jobs like accounting, payroll, book keeping and data entry work were outsourced. Since few years, the overall concept of outsourcing has changed and now it encompasses a number of functions that are considered to be "non-core". Today, it is common for organizations to outsource a number of functions like human resource functions (HR), financial and administration (F and A), accounting, payroll, call center services and customer care services. |
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| For any business to flourish and remain competitive in the global scenario, the owner needs to concentrate on the core business functions. Therefore, a business owner cannot afford to spend his valuable time on non-core business processes that could be handled by BPO specialists. A BPO solution provider can design a marketing strategy through which he can solve his complex business issues, by maintaining a competitive edge and achieving the required results at the end. |
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| Types of Business Process Outsourcing Units |
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| Usually, a business process outsourcing unit has a call center to carry out all the non-core business functions of a company. A call center is centralized office which is used for transmitting and receiving calls. The person who receives calls is known as call center agent. Basically a call center is of two types inbound call center and outbound call center. Inbound call center performs all types of customer services while an outbound call center is majorly sales-oriented. |
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Business Process Outsourcing- The Present Day Scenario |
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| BPO services starts from the grass root level of answering customer queries to more sophisticated ones like equity research, data analytics and processing insurance claims. The end users of these call center services are from various sectors like banks, insurance, manufacturing, retail, pharmaceutical and healthcare. These BPO services are further expanding into high value services like scientific research and development |
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| The BPO services presently are grouped into the following areas like finance, customer care, human resources, content development, administration and payment services. Among all these customer care services, constitute the largest segment in the BPO industry. Financial services, airlines, manufacturing, telecom, insurance, utilities, retail, health-care and pharmaceuticals industries outsource customer care services to call centers. The customer care services and the voice based BPO services account for over 60 percent of the industry share. |
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Advantages Of Business Process Outsourcing Services |
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| BPO services help companies to improve customer loyalty, drive revenue, save costs, integrates business applications, maximize operational and organizational efficiency. Currently, outsourcing has undergone a complete metamorphosis. There are many organizations that hire BPO service providers to carry out their business functions. There are some start-up companies that outsource both internal and external services to BPO firm in order to speed up their work. They hire a host of BPO service providers to handle all aspects of their new projects including marketing and sales. Still there are some organizations that hire BPO services and outsource their whole business operations. The major forms of outsourcing are business process outsourcing (BPO) and information technology outsourcing (ITO). |
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| India as an outsourcing destination-What makes the difference! |
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Indian BPO Industry: An overview |
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| India has been one of the major outsourcing destinations in the world. It is one country, which has its own inherent strengths contributing to its success as one potential outsourcing destination. To meet the increasing demand for productive, customer contact centers, most big and medium-sized organizations based worldwide are engaged in outsourcing numerous prospective services from different locations in India. |
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| With India emerging as the global outsourcing hub across the globe, industry forecasts continued growth prospects in the coming years. The pivotal segments to record exponential growth rates are customer contact center or customer interaction centers, back office operations, insurance claims processing and more. |
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| Indian BPO Sector: The changing market trends |
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| In 2008-2009, the overall exports contributing to the total revenues was around 87%, showing a growth rate of 18% on a y-o-y basis reaching out to USD 12.8 billion |
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| The ITes revenues (both export and domestic) showed continued growth. It reached out USD 14.8 billion in (2008-09) from USED 3.9 billion (2003-2004), including CAGR 29%. |
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| The ITes domestic market recorded growth of USD 300 million in (2003-04). In 2008-09, the total revenues generated stood at USD 1,940 million marking a considerable growth, including the CAGR of 45% in the last 5 years or so. |
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| Core Service Lines in Indian BPO Sector: A synopsis |
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| The Transaction and HR related segments accounted a slow growth rate recording 17% and 18% respectively in 2008-09. |
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| Customer care persists to be the biggest segment in terms of the revenue generation. Its total share accounts to 44% in ITes/BPO, recording a total growth of 18 % within 2008-09. |
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| Other major service lines that include document management and knowledge services illustrated lowest y-o-y growth of about 15% approximately. |
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| US remain the principal export destination of the Indian ITes services accounting to 60% to the total export revenues. US is closely followed by the Continental European at 31% and the APAC at 7%. |
