1. BPO

2. Agenda
•
•
•
•
•
•
What is BPO?
Categories.
Key Terms.
Rule to Follow.
BPO to India.
Pros and Cons.

3. What is BPO?
• Business process outsourcing (BPO) is
the contracting of a specific business task,
such as human resources and customer
service, to a third-party service provider.
• This allows companies to focus on their
core business processes.
• BPO is implemented as a cost-saving
measure for tasks that a company
requires.

5. BPO Categories
• It is often divided into two categories:
- Back Office Outsourcing which
includes internal business functions
such as billing or purchasing.
- Front Office Outsourcing which
includes customer-related services such
as marketing or tech support.

6. Key Terms
• Key Terms:
- Offshore Outsourcing is BPO that is
contracted outside a company's own country.
- Nearshore Outsourcing is BPO that is
contracted to a company's neighboring
country.
- Onshore Outsourcing is BPO that is
contracted with the company's own country.

7. Rules to Follow: What to Outsource
• Processes that do not add value to a
product or service.
• Highly repeated tasks with little variation.
• Labor intensive tasks that do not require a
companies intellectual property nor core
competencies.
• Processes that will tie up large amounts of
capital in assets.

8. Rules to Follow: What Not to
Outsource
• Processes that incorporate your core
competencies.
• Processes that require access to
intellectual property of your company.
• Non-labor intensive tasks.
• Processes that are associated with the
image of your company.

9. Rules to Follow: BPO
Guidelines
• There are many BPO providers, so
research to find the one that best suits
your needs.
• Using one provider for multiple tasks will
help streamline your BPO.
• Have some measure to check and control
the output of your BPO.
• Communicate with your BPO.

10. BPO to India

11. BPO to India
• Indian revenues from BPO are
•
•
estimated to have grown 107% to $
583 million.
Leading Competitors:
- Philippines, Mexico, Canada,
China and Ireland.
67-72% of costs to call centers
operating in the US/UK is directly
linked to man power costs. India
only spends 33-40% of costs on
man power. This includes training,
benefits and other incentives for
labor.

12. Statistics of the Future
The main revenue areas for Indian BPO
companies.
India's BPO Market in 2008
Service Line
First Estimate (1999) Second Estimate (2001)
HR
5.4
3.5-4.0
Customer Care
4.1
8.0-8.5
Payment Services
2.9
3.0-3.5
Content Development 2.6
2.5-3.0
Administration
1.3
1.5-2.0
Finance
0.7
2.5-3.0
Figures in $ billion
Indian revenues from BPO are estimated to have grown 107 per cent to
$ 583 million.

13. Statistics of the Future
Comparisons of India vs US BPO Costs
US$ Cost per FTE
(Full Time Employee)
Personnel
United States
India
India as % of US costs
42,927
6,179
14%
G&A Expense
8,571
1,000
12%
Telecom
1,500
2,328
155%
Property Rentals
2,600
847
33%
Depreciation
3,000
1,500
50%
58,598 11,854
20%
TOTAL EXPENSES

14. 2012…

15. 2012…

16. Capabilities: Why go to India?
• Language
•
– Major attraction for Multinationals
– Advantage over competitors
Educated Employees
– Large number of qualified workers
– Proven to be the best in the IT and
computer software fields
• Strong technical skills
• Eagerness to engage clients
– Produce around 100,000 engineers
annually

17. Capabilities: Why go to India?
• Infrastructure
•
– Improvements have led to increasing
success
• Telecom facilities
• Power sector
• India as a whole
Government
– Realize potential for economic
development
– Favorable policies have turned India
into a BPO/IT hub.
• Examples: Investment promotion,
telecom policy, IT Act

18. Pros of BPO
•
•
•
•
•
•
English Language Proficiency
Skilled Workforce
Lower Wages
Flexibility in Working Hours
Suitable Human Resources
Large Number of Graduates

19. Cons of BPO
• No TCO based costs
(While total cost of ownership (TCO), a summary of all
tangible costs associated with a BPO contract, is still a near universal tool used by BPO buyers when assessing a potential
contract, BPO buyers are beginning to look beyond TCO into intangible, non-linear factors associated with outsourcing
relationships.)
•
•
•
•
•
Poor Infrastructure
Cultural Differences
Internal competition for resources
Rising labour costs
Political and religious instability

20. Conclusion
• As a manager!
– Allows company to focus on core
competencies.
– What the future lies.
– Attractiveness of India.

21. Sources
• BPO India: Business Process Outsourcing.
•
•
•
•
•
http://www.bpoindia.org/
Forbes Magazine: Business Process Outsourcing.
http://www.forbes.com/bow/b2b/industry.jhtml?id=38
Why India?
http://www.indobase.com/bpo/why-india/index.html
InformationWeek: Indian Outsourcers Grow Fast, Gain Prominence.
http://www.informationweek.com/story/showArticle.jhtml?articleID=53701018
CIO Definitions:
http://searchcio.techtarget.com/sDefinition/0,,sid19_gci928308,00.html
BPO service India: Comparing India with other BPO destinations.
http://www.xicom.biz/bpo_swot_analysis.html