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BPO Basics provides the basic level information
about Business Process Outsourcing and the concept of outsourced
call center from definition
to Buzzwords.
What is BPO?
All Outsourcing activities can be classified into three types. Basic/Traditional
outsourcing services, which curb direct costs, such as hardware/software
maintenance and operation costs. The second type of outsourcing
helps lower "indirect" costs and achieve efficiencies
in areas related to business processes This is termed Business
Process Outsourcing. At the highest level, is the Business
Transformation Outsourcing.
Simply put, BPO is the delegation of one or more
business processes to an external provider who in turn provides
services for the selected process based on certain defined and measurable
performance criteria specified by your organization. This generally
involves an organization's non-core processes.
BPO buzzwords
Why outsource
Business values of outsourcing
India advantage
Useful web sites
BPO Buzzwords (terminology)
Nearshore
Nearshore outsourcing or 'nearshoring' is outsourcing within nearby
region or neighboring country.
Service Level Agreement
(or SLA)
An SLA is a contract defined by the buyer and defines the nature,
cost and conditions of the outsourcing services to be provided by
the service provider. Examples of SLA metrics include Response time,
Quality etc.
Outsourcing
can be onshore, near shore, offshore or a combination of both onshore
and offshore.
Business Process Outsourcing and Offshoring are sub sects of outsourcing.
Onshore refers
to the business process being carried out at the organization's
location itself.
Offshoring
refers to an organization's business process being carried out at
the remote site.
Information technology
Outsourcing (ITO) refers to outsourcing of IT services (Infrastructure
and applications) to a third party.
Business Process
Outsourcing refers to the business process outsourced to
the service provider, e.g. technical support wherein the service
providers provides this service to the organization's customers.
Why Outsource?
BPO is growing because companies want to focus on their core businesses.
Companies worldwide feel the need to shed their ancillary processes,
free up internal resources to focus on their core business competencies.
BPO is a strategic management tool that can help organizations to
improve process level efficiency and effectiveness, as well as reduce
costs.
Business Values of Outsourcing
- Cost Advantages- BPO provides an accounting
advantage - financial engineering with regard to assets, staff
and infrastructure
- Innovation and speed to market- Ability
of the outsourcer to do things which an organization cannot do
on its own or does not have the domain expertise.
- Increased customer satisfaction, more
efficient operations by focused effort on customer service by
the outsourcer.
- Economy of scale - BPO provides the
flexibility to respond to a rapidly changing marketplace and scale
operations up or down as conditions dictate
- Business risk Mitigation by capitalizing
on the outsourcer's knowledge of local laws, infrastructure, processes
and expertise.
- Rapid access to high quality practices
at the outsourcer's end.
- Availability to skilled personnel also
increases the quality of service. Outsourcing a process also means
the buyer no longer has to manage the head count. 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.
- Shorter project delivery times due to
the expertise of the outsourcer with regard to transition of business
processes to the offshore site.
- Using the time difference to your favor,
especially where the offshore company provides support or maintenance.
- Better control over operations. Internal
resources can now focus on core customer service processes.
India Advantage
India's technological advances are noteworthy.
Several Fortune 500 companies have opened centers here, to benefit
from the technologically skilled, highly educated, motivated workforce.
Companies like GE, and American Express, have successfully demonstrated
the benefits with total annual savings of few hundred million dollars
between them alone.
Also India leads the world in quality adherence, which is stated,
from the fact that India has the highest number of Maturity Level
5 organization in the world. A major reason why Global Corporations
are outsourcing to India today is Productivity Improvement and Quality
Improvement. A study by a leading research organization shows that
when processes are off shored to India, companies not only get the
advantage of low cost but also experience improvement in productivity
and quality.
India's advantage as the BPO destination
can be summarized as follows:
- Two million graduates each year (Existing
Pool: over 25 million)
- Bangalore - the silicon valley of India
has the highest number of software professionals in the world
taking the first place from Osaka, Japan.
- English speaking and IT savvy workforce
suitable for an outsourced call center
- Indians view BPO jobs as a good career
option.
- Availability of qualified personnel
across various industries.
- Cost reduction up to 50%
- Government support for Call center &
BPO industry
- Improving telecom infrastructure to
meet outsourced call center requirements
- Adherence to leading quality practices
by various organizations. Certifications are given importance.
- Lower infrastructure costs
- Favorable time lag: 12 hours with US
& 5 hours with Europe
- Overnight turnarounds possible
- Resources with experience of financial
and legal systems similar to the west
- Strong domestic IT services industry
to support BPO industry
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