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The Future of Business Process Outsourcing
Business Process Outsourcing (BPO) entails delegation of business functions to an agency that is external to business organization. This external agency is the service provider. The selected processes in turn is administered, owned and managed on performance metrices that is well defined and measurable.
The BPO phase that began since the late 1990s continues to expand globally for a number of reasons with the consequence that the parent companies are focused more to their core competencies. The factors that have led to outsourcing of Business operations to external agencies include globalization led competition on one hand, and acute labor shortage in developed nations on the other. Mergers and Acquisitions have also played a role. No wonder, immense business potential inherent in outsourcing is now being understood. According to 2005 estimates by DOEACC, global business of ITES stood at US $10 billion in 2005. The same was projected to expand to US $ 140 billion by the next three years and to US $ 2000 billion by the next five years. NASSCOM projections are even more optimistic with IT enabled services with their potential to generate revenues of US$17 billion coupled with employment for 1.1 million people within less than a decade. Various services offered in this segment include “customer care, finance, human resources, payment services, administration and content development” (www.doeacc.edu.in). Customer care include “database marketing, customer analytic, telesales/telemarketing, inbound call centre, web sales and marketing, sales and marketing administration.” (www.doeacc.edu.in). Services within finance include “billing services, accounting transactions, tax consulting and compliance, risk management, financial reporting, financial analysis” (www.doeacc.edu.in). Human resources include “benefits administration, education and training, recruiting and staffing, payroll services, hiring administration, and records management” (www.doeacc.edu.in). Payment services include “credit/debit card services, check processing, transaction processing” (www.doeacc.edu.in). Administration includes “tax processing, claims processing, asset management, documentation management, transcription, and translation” (www.doeacc.edu.in). Content development tasks include “engineering, design, animation, network consultancy and management, biotech research, apart from the services like GIS, digitization, and web applications” (www.doeacc.edu.in).
IT enabled services (ITES) is also known as web enabled services or remote services. It covers almost all of operations that exploit information technology to enhance efficiency and productivity of an organization. “These services provide a wide range of career options that include opportunities in call centers, medical transcription, medical coding and billing, back office operations, revenue claims processing, legal databases, content development, payrolls, logistics management, GIS (Geographical Information System), HR services, web services etc” (www.doeacc.edu.in).
The call centre Industry in India is in global focus today because of its very high growth rate. The Industry has attracted the attention of major business firms on the promise of delivery at a hugely subsidized price largely due to cheap labor and a large pool of talented English speaking graduates. There have also been some controversies on the quality of manpower, lack of domestic customer care culture, and weak infrastructure. There were also internal oppositions in the USA and UK based on the fear of loss of jobs. Nevertheless, the industry saw through the resistance and is today further poised to growth as never seen before.
According to a recent Dataquest study, the following information came to light:
- BPO export sector in India was Rs 37,800 crore industry in 2006-07
- the domestic call center revenues touched Rs. 8500 crore in 2008 fiscal.
- the survey made a detailed study of the captive as well as third party call centers.
- the growth in domestic call center industry to accelerate to 65%, up from 42% the previous year.
- the domestic call center industry employed over 280,000 agents as on December 2007.
- the break of the above figure was 130,000 agents employed in captive call centers; and 150,000 employed in the outsourced industry.
- the Top 10 outsourced players employed 71,645 people (www.cybermedia.co.in)