Outsource your business process - News...

With outsourcing business process and call centers being the talk of the town, investors are queuing for a piece of the booty. In this humungous bpo market, SATYAM Computer Services Ltd has entered into an agreement with two global investors for aninvestment of $20 million in Nipuna, their business process outsourcing subsidiary in Hyderabad.

More on Outsourcing business process...

Outsourcing has turned up as the surprise package in the Indian industry that has made heads turn. It has even prompted the Indian governent to act and provide incentives to investors in this industry. The government will have to do somethings right, if they have to really put India on the global outsourcing as the industry consolidates. If it has to compete with a maturing Chinese market, India will have to set its infrastructure on course. Just reducing redtape and taxes for investors might not be enough. Basic infrastructure improvement might do more in bringing investors to invest in call center and outsourcing business operations. This is might also end up as a boon for the humungous middle class of India.

Though China is relatively behind in their quest to tap the outsourcing market, their political system is such that, change is faster. Whereas in India with the eternal flaws of democracy, to get basic changes to become reality, it takes more time. How fast the Indian private sector and government is ready to implement changes might decide the leaders of the outsourcing business industry after it consolidates.

Outsource your business process - Chinese might checkmate the competition in the future!

Many companies have already started outsourcing their business process from countries like India and Philippines. As many as 80% of American companies will surely think about outsourcing their business process as a strategic decision in the next few years. Companies need to cut costs, no doubt about that, but more importantly, they need better quality at lesser cost. Performance to cost ratio needs to be high and that's not what they are getting in the US at the moment.

So, American companies are heading for foreign shores to get the best deal for their business. As more businesses use outsourcing and call center services as a means to improve quality of service, they might get better outsourcing destination, what with the economic downturn and countries like China teaching English in such a big way. Just a few years back, after or during the dotcom bust, you could get a software project done in china from a qualified doctorate in the subject for close to the price of American peanuts. If this happens in the outsourcing industry and they are able to maintain quality and performance, China has a good chance of overtaking India as the outsourcing capital of the world. China is already teaching English with tutorial classes in stadiums.

China has a huge population and is improving its edcational system to create a larger graduate pool, unemployment
is high in China and red tape is an art form. They are more ready to work for dirt cheap than Indians with their high levels of unemployment and low wages. If China is able to generate a young brigade of English speaking graduates, they can easily make a mark in the outsourcing and call center services industry.

Outsource business process - or outsource talent!!!

The recent news from IBM is reassuring to Indians and numerous other outsourcing destinations. IBM plans to shift white-collar high paying jobs abroad. In a serious step that could affect the entire industry, IBM execs said that they will have to accelerate the process of outsourcing into the higher echelons of power.

This move could be beneficial for countries like India that would have, otherwise, been centers of low cost, low value chain products and services. They can now step up the ante and move higher in the value chain. India has been the favorite US destination for outsourcing business process for quite some time now. This has been more because American companies need to cut costs. It will be interesting to see how the American companies would react after the outsourcing business process industry consolidates.

Outsource business process - media hype or reality?

There have been numerous articles in almost every daily or magazine about outsourcing and call center services. The point everyone seems to be making is that this sector is the next boom after the software and dotcom boom of the 90s. There calculations are pretty simplistic. They see the present growth and extrapolate it with some error corrections and estimate the BPO and call center services sector to be worth a whopping $ x billion or so. For example, Indian outsourcing and call center service market is estimated to grow to a $20-24 billion in the next 5 years. The optimistic figures are correct; India is the hottest outsourcing destination for US companies.

What most analysts seem to have missed out on is if we have the Human resource capabilities to cater to this estimated $20 billion industry. Raman Roy of Spectramind made an excellent point on this subject when he said that
to be able to cater to a $20 billion call center services and outsourcing industry India will have to have more than 1 million trained and educated people. Inspite of our machine-like education system, this is a task unto itself. The accounting and financial services industry is estimated to generate outsourcing business of $4-5 billion by 2008. But India does have any trainers for US GAAP.

Even if these estimates are splashed all over the news, reality might be very different. Whether the numbers will happen will depend on how our industry and government are able to create the essential synergy for the improvement of the outsourcing business process industry.

Outsource your business process - industry should optimize

The outsourcing sector has truly come of age with many companies thinking of India as the first outsourcing destination. Catering to the new industry trend of outsourcing, the government of india will have to use its machinery to solve the many problems that mar the growth of this sector.

India has basic infrastructural problems that have been institutionalized by redtapism. In his latest outburst on the power problems in Bangalore, Azim Premji expressed his distress that during a clients' visit their were 2-3 power cuts in an hour. Such problems are not rare in India.

Inspite of this, why do companies come to India, then? That would be an interesting question to ask. Most cynics would say that India will be become waterless and powerless in some years. Even if that is the future, companies outsourcing to India are making money. They are getting better skilled talent in India than anywhere else in Asia and at much lesser cost.

The Outsourcing business is the future for the indian economy and we must exploit it to the optimal extent. The industry will have to get organised with requisite investment in this regard. Its important not just to invest but to create a highly skilled and flexible enterprise. Trying to attract high value projects will be very important to move up the value chain. Attracting talent, nuturing it and maintaining it with a high quality education system is a task that the government has to handle.

In the future, as the outsourcing industry consolidates, the small players might be taken over and assimilated in huge organizations. It might result in number of jobs in this sector reducing compared to the huge demand in the call center and outsourcing business now. Indian industry and the government has to prepare for the future and its casualties, else we might not be able to handle the another downturn in the economy.

Outsource your business process - Skills are the future...

There is a general concensus in the industry that the first criteria in the outsourcing business process is cost and if companies from America and Europe are not going to save substantially then they are not going to invest money in outsourcing their business process.

With cost cutting being the mantra, most industry experts agree that in the near future as the industry consolidates, it will be more important to climb up the value chain. So instead of becoming labor intensive, outsourcing jobs have to become more IQ-intensive.

Inspite of the outcry against outsourcing to offshore centers in America, it is quite clear as Kiran Karnik said, that America generates more jobs than it loses. So it might be an exaggeration that people are losing jobs, which might be nonetheless true. Its economic reality and Indians and Americans will have to cope with it. As some guy commented on one of the articles about outsourcing "Days can drag on at an indian call center"; he said - "well you are taking our jobs ,you might as well as have the stress that comes with it." This is reality and the US and India will have to face up to it whether they like it or not.

Most outsourcing industry experts agree that while costing might be a criteria now, the skill factor is going to matter more. While most people want the Indian outsourcing industry to progress, they are not implementing the training that is being followed some countries. Philippines, for example, has been training people in US Accounting procedures, whereas in India its done as in the pre-job training period. As the industry consolidates this might be a deciding factor that might differentiate the men from the boys.

The success of projecting India as an outsourcing business process market will be in proper training, skill improvement, better tackling of HR problems and government policies.

Outsourcing business process - Consolidation time...

With the BPO and outsourcing sector making headlines, it was imperative that something would go wrong. Many companies that are in the outsourcing business for a quick buck and an early exit, have started slashing prices, left, right and center. The lowering of billing rates from the range of $8-25 3 months back to $5-20 has sent shockwaves through the business process outsourcing industry.

Such competition might not be good for the outsourcing industry in the long term but many companies that want to build up market share at any cost are quoting low prices. Even players like MsourcE have had to pull out of a couple of deals because of unviable rates quoted by lesser competition.

Most say that this is just a part of the consolidation process and that when the outsourcing industry settles down, customers will get smarter and quality will win. It will not be long when price won't be the only deciding factor.

Outsourcing increases job market in South Africa

Outsourcing business process has proved to be a boon for many. In South Africa, it will turn out to be a boon that will change their economic landscape. Computer Sciences Corporation of South Africa has just won a multi-million rand contract to handle the insurance business process outsourcing support to CSC clients in the Americas.

Run from Canal Walk, Cape Town, their outsourcing operation will help them to accomplish 'follow the sun' processing. They are currently Americas’ largest insurance business process outsourcers. With this deal, they can generate a revenue 1-billion rand within 5 years and create 1 000 new jobs.

There are many such outsourcing business process providers who will benefit from this new industry...

Outsource Business Process - A new Wave...

While offshore business process outsourcers are getting all the attention, the small players in the local outsourcing market are making their bucks without too much hullabaloo. Big Boys like Wipro, Infosys are normally under the media spotlight, while companies like Microwave Communications and many more such companies are picking up business.

Just 2 years back, Delhi-based Microwave was about to close down with massive competition from cheaper mobile phone service operators. That's when they decided to offer their 750-seat call center service backbone to companies that wanted to outsource their business process. they are even planning to add 300 more seats to their call center and hope to increase business by 50%, with clients like Hindustan Lever, Hutchison Max, BSES and ICICI Bank already in their kitty.

With so much focus on call centers and outsourcing business processes from outside India, its time somebody noticed the local market in outsourcing. At the moment, Indian companies only outsource 5-10 % of their business process but in a couple of years this figure could go up to 40%. In addition to this the call center offshore services industry would mean party-time for the BPO services and call center industry in India.

Whether India is able to convert the potential of the BPO sector into reality only will tell!

Outsourcing business process for ever industry...

While the outsourcing bug has been evident by the spate of deals signed by American and European companies, asian companies have been far behind till now. In Asia, outsourcing business process is catching on with Westpac Bank signing a US $1 billion deal to outsource its entire mortage processing business. The Japanese Shinsei Bank signed a deal with ABN Amro to outsource its entire trade business process. Bumiputra-Commerce Bank of Malaysia set up a company EPIC-I to take over its back-office and business processes.

Companies that have built strong relationships over the years have often started outsourcing several business processes from a single vendor. It has improved integration and simplified relationships. Some companies are even ready to share services centers with their direct competitors if that can increase revenues and scales substantially.

As the global business process outsourcing market consolidates, India and other outsourcing destinations will have to move up the value chain. The mood of the industry is definitely upbeat with gartner inc. predicting a revenue of $13.5 billion by 2007. Among the competition to india are russia, philippines, china, canada, mexico; but at the moment by sheer numbers, India is way ahead.

There have been many debates and protests by Americans on outsourcing. In the present business scenario, outsourcing is a reality and business necessity.

Outsource business process - An opportunity for all!

The recent uproar against outsourcing to countries like india has brought the outsourcing industry into focus. What is really surprising is that outsourcing was always in vogue whenever firms could find excellent quality of labor at lower cost. The only reason that its come into focus is because the current global economic scenario makes it a compulsion to cut costs in order to sustain business.

The recent outburst over outsourcing heading for indian shores is valid in its own right. Many Americans have and are going to lose jobs. But its an economic necessity for businesses in America to outsource their business process, otherwise they wouldn't be doing so. To blame India or any other outsourcing destination would be unfair. The solution to their problem would be to generate more jobs rather than cribbing over their condition and passing laws to stop outsourcing.

Another way at looking at their problem is, as an opportunity. If companies outsource to countries like India, it will improve the purchasing power of the Indian middle class. More graduates, as has been evident will get well-paying jobs. These guys are going to head for places like KFC, McDonalds for parties, shop at American stores. They are going to buy from American companies. People will be able to afford drugs from American companies, especially after 2005, when India will have to follow WTO rules. So, the point is that, America is outsourcing so that their businesses can improve and get people better jobs in the long run. If India wants to outsource cheese from Switzerland, Switzerland might outsource milk from America or Australia and America might outsource beer from Germany or Australia. This is global business outsourcing at its best and has been existent for many centuries.

It was sometime in the 50s and 60s that America built their economy such that students out of high school could get salaries that could make them economically independent. This diluted their ambition, need and desire for further-education. The so-called outsourcing curse could turn out to be (to use a cliche) a blessing in disguise. The 20-something gal who thought that she could get a well-paying job might now study further and get college degree that will further her economic condition. It will /can spur entrepreneurial instinct in some, who would have been too complacent otherwise and might have settled for a more cushiony job. It might help Americans to stretch their skills and intelligence further and utilize it fully.

Whether the legislation against outsourcing is passed or not, outsourcing business process is here to stay, in one form or the other!

Outsourcing business process - news...

Joining the outsourcing to India bandwagon is the Swiss travel giant- Kuoni. It plans to outsource its business process operations for its $2.7 global business with a joint venture with a local software vendor which could be worth Rs.100 crore in a couple of years.

In line with this strategy they have already set up a training academy in Delhi to train travel professionals to better exploit its skillsets and domain-expertise and to create a pool of industry talent. They also sent a team to study the call center facilities in India so as to entrust the task of running a 24/7 call centre to Kuoni India for its customers in UK.

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A large New York based hospital has outsourced its business process to Apollo Health Enterprises .This multi-year contract proposes to make the company cash-breakeven. For the 2003 financial year its made a cash profit of Rs.30 lakh. With such an upbeat future, its parent company Apollo Health Enterprises plans to take it into its fold through the merger route.


Outsourcing business process - Awesome quarter results!!!

For the first quarter the BPO outfit of Infosys, Progeon has a post-tax profit of Rs 72 lakh on a total income of Rs 12.7 crore. The company has projected revenues of Rs 13 crore to Rs 13.9 crore for the second quarter (Q2) ending September 30, ’03, and revenues of Rs 75.8 crore to Rs 85.30 crore for the year ending March 31, ’04.

Risk and Outsourcing your business process

Most businesses propose outsourcing their business process as a strategic management decision. It not only saves them money but also streamlines their business operations. However it is more important to see outsourcing business processes in terms of long term interest of the organisation. Will your companies outsourcing decision result in gains with reference to changing geo-political scenarios?

Risk assessment becomes an integral part of the decision making process if you are planning to outsource. It is important to, pardon my cliche, not keep all eggs in one basket. Outsourcing from a single destination has to be a decision whose long term consequences have to be calculated in terms of future political scenarios.

It is important to get the higherst incremental returns from your outsourcing decision at the lowest risk of business disruption. In most cases, attractive and cost effective labor pools carry maximum geo-political risk that has to be balanced with the projected cost benefits.

Outsourcing decision can be classified into low, moderate and high risk categories depending on the type of business process you are outsourcing, your decision and its significance to your bottom lines. You cannot think of outsourcing applications that have a direct impact on your business results (like reservation systems) from high risk destinations. Determining outsourcing destination with respect to future business disruptibility and which business process to outsource thus becomes an important part of business analysis.

Outsource your business process - Its good News for the business process outsourcing industry!

India is to become the second largest outsourcing software center for Oracle with a proposed increase in workforce to 6000. It has joined among many companies in outsourcing their business process to exploit the low cost and high skilled workforce in India.

In another news, Electronic Data Systems and Prudential have major plans to outsource their business process from India. The former is the second largest outsourcing company in the world and the latter the leading insurance policy provider.

Having started from low end call center services the Indian market is slowly maturing to offer better high value tasks for their clients. This portends well for the outsourcing market which is likely to grow 60% this year. India has been named the 'top country ' for offshore delivery of call center by Gartner - slightly less than $1 billion in 2002 to $1.2 billion in 2003.

With an eye on the outsourcing pie, Pune-based Kale consultants is targeting a revenue of Rs.100 cr by 2006 from its business process outsourcing operations. Its also close to acquire 3 more clients besides its 3 clients in europe, cananda and middle east.

Another outsourcing business process operation to be set up in Gurgaon by Fidelity Investments, the biggest mutual fund company in the US with $800 billion under the management.

Prudential UK also set up business process outsourcing center at Powai, Mumbai.

Outsourcing business process news...

After AV birla's acquisition of TransWorks, the godrej group is going to start its own outsourcing business process operations. They are not only looking for investors in the BPO market but also contemplating starting an 100% BPO operation.

Godrej had made its intentions clear a year back with investments in BPO firms with stakes in CBay Systems of the US and Compas Connections of the UK. It plans to set up a new subsidiary called Godrej Global Solutions Ltd with Sanjay Tipnis heading its operations.


Outsourcing your business process - Drawbacks!

Reporting on the umpteen benefits of outsourcing your business process to call center offshore services and BPOs is very normal nowadays. Cutting costs, core competencies, flexibility, fast development times and many such jargon words are flung at you whenever the outsourcing and call center subject comes up in discussion.

Getting struck on the outsourcing and call center bug could more often than not get your company into trouble, if you dont understand its drawbacks. Many a company that outsources its business process in time loses the technical aptitude to participate and handle technical projects. If in case the company's core value comes from the outsourced process, you are in big trouble.

It is very important for companies to adopt outsourcing business processes as a strategic decision, often using multiple vendors and keeping core technology decisions by building a technical team for the same. Putting all faith in one vendor could result in your fate being tied to the fate of the outsourcing provider.


More on outsourcing your business process...tomorrow

Outsource your business process - Outsourcing Scenarios

From the news to the papers, there is plenty of talk on outsourcing, its why and whats and why nots. Today lets go through some practical scenarios which clearly and conclusively indicate why outsourcing has come of age. Why experts say that Outsourcing business processes can help your concentrate on your core competencies?In the year 2000, General Motors' employees were on the road (pun unintended). more than 100,000 of its employees were traveling on business in the US alone. The humungous paper work for their expenses and entertainment would drive any department up the way, if I might use a cliche. The perfect scenario for outsourcing, isnt it? GM outsourced their job to Washington-based Captura Software Inc.

Spherion, a Fort Lauderdale-based temporary staffing company had a major problem with more than 500,000 of W2s and excessive reliance on temporary staff. If you worked in the HR department and you were asked if a particular person worked for your company during a time period, you would be lost in paper. They had plenty of people who very often just did this employee verfication process. Employee verfication was not their core competency. Another perfect scenario for outsourcing! It outsourced its business process to TALX, a St. Louis-based outsourcing business process provider.

Tomorrow, we can check out some more scenarios that prompted companies to venture into outsourcing their business process...

Outsourcing your business process - America gains!

In spite of what America has to say about the outsourcing business process industry, it has benefitted tremendously from the BPO and outsourcing boom. The US economy benefitted to the tune of 16.8 billion last fiscal with Indian code writers exporting $8.5 billion worth of software and services to the largest IT market.

One of the prime reasons for outsourcing business process is cost cutting. By outsourcing to india, American companies have saved upto $10-11 billion besides $3 billion hi-tech imports from US to India.

Indian IT professionals contributed $500 million to US social security and paid another $500 million as income tax, besides spending over $1.8 billion during their visits. Mckinsey and Co quote that the ITES market is likely to touch $142 billion in 2009.

Indian IT companies in the US employ nearly 60,000 people in 2001. These 60,000 people paid nearly $810 million in taxes—federal and local— and paid nearly $300 million to social security in 2001.

With all these benefits to the American economy, many would think it a surprise that many states want to ban outsourcing business process operations.

Outsourcing business process operations - from low end to white collar!

Outsourcing business process operations have evolved as fast as they have emerged. Initially jobs that were outsourced to offshore centers were low-end jobs like data entry, contact centers and transaction processing. The trend is slowly changing, as American companies have found better hr resources and lower costs in countries like India, Philippines etc. Slowly, the focus is changing from mere call center offshore service operations to white-collar jobs like financial analysis, research, accounting, HR and publishing. Its a refreshing change that can benefit not just the companies in question, but also the economy of the outsourcing destination.

Though many people expect a major backlash from Americans and Europeans against the outsourcing trend, its quite clear that outsourcing business process operations are economic and business reality. The laid off people will have to just find better and newer career options, a harsh reality, which they have to adjust to, more practical than cribbing about losing jobs to Asians people. In conquering this condition will be their greatest strength and might infuse the needed vigor to the American economy, from the present deflationary times.

Outsourcing business process news...

PricewaterhouseCoopers sold its international outsourcing business process operations to Exult, a company which provides HR outsourcing services, for $17m in cash. By this sale, PwC will transfer 500 employees to its Exult including the client managers of transferred existing accounts besides multilingual professionals with cross-border
finance and accounting skills and years of BPO experience. It also increases Exult's blue chip clients to 15, expands its operations to Hong Kong, Singapore, the Netherlands, Poland, India and Brazil and now employs more than 2000 people worldwide.

Outsource business process - To bar or not to bar!

The Outsourcing business process industry is under attack. Shirley Turner, a Democratic state senator from Mercer County, N.J. has proposed a bill to ban outsourcing business processes. Her proposal has attracted praise and brick bats. The major objection to outsourcing business process is the increase in unemployment in America and the social problems it has resulted in.

The main reason for outsourcing business process is "salaries". Outsourcing operations in Asia pay much lesser than the same operations in America or Europe. On the salary front, America and Europe cannot compete. Operating from a local center also increases the burden on the tax payer by 20%. Laid off workers in the US have to be paid unemployment insurance, health and social security. This has increased the burden on the state.

In spite of these losses, which many critics say are short term, the social loss is much more, they say. The Outsourcing business process industry has resulted in many Americans losing jobs and has caused dysfunctional families. The percentage of spousal, child and substance abuse has increased drastically. Since it is the state's responsibility to solve such problems, they are getting fidgety. Solving such a social problem would be more difficult for the government than just banning the business process outsourcing sector.

Talks of 'free trade' may have to suppressed if they have to ban the outsource business process sector.

Finally, its economics that decides politics. For the next few months it might be a wait-and-watch game. If the bill gets passed it would increase costs for many businesses, that might go broke. It would also be a disaster for the millions invested in Asian countries like India. At the moment, India and the like are sitting pretty as the 'hottest' outsourcing destinations. The goverments in countries like India and Philippines have backed the BPO and outsourcing business process sector. Such a bill might break the backs of these upcoming Asian economies.

Outsource business process - News

In a bid to reduce operational, technical support and development costs, the Software giant Microsoft is shifting its focus to India. With a plan to invest $400 over the next 3 years, its a prime example of how India has been able to market
itself as an outsourcing business process destination. With a highly talented, low cost pool of professional well versed in English, India has managed to get the best from this Outsourcing trend.

The next wave of outsourcing business process...

With India already setting a trend in business process outsourcing, other asian countries have started cashing in on the trend. Philippines is one such country in the queue for outsourcing business process contracts.

Proctor and Gamble has chosen Philippines as an BPO destination to serve its operations in Asia. The primary reasons are the same; technology infrastructure, English language skills, low cost and the fact that the people are very customer service minded.

Philippines is also interested in shedding its bad political image of the past. Leaders like Imelda Marcos and Joseph Estrada have brought bad publicity to the country. But with a new crop of leaders like Gloria Macapagal-Arroyo, they are making an effort to bring much wanted investments.

One of the ways of drawing investments to Philiippines, they have found, is by increasing outsourcing business process projects by deregulation and privatization in the telecom and the power-generating industies.

Outsource Business Process - A Success Story

Hampshire Companies, a real estate investment fund management firm investing in industrial and retail properties has concluded that outsourcing its accounting business process is the fastest and most efficient way to meet its accounting challenge. It currently owns 224 properties in 30 states and is growing further.

So it has turned to DTO, for outsourcing its accounting business process. Built on a J.D. Edwards platform, this outsourcing program offers Web-based access to integrated real estate information -- accounting, financial reporting, property management, lease administration, work order management, and space management -- via a user-friendly portal.

Outsourcing improves the accuracy of the accounts payable process. Too often an invoice gets forgotten in a drawer. DTO's process creates an image of every invoice it receives, which it then routes electronically to the proper person at Hampshire Companies. This employee visits the Web site to view the invoices and approve them. This has made the outsourcing prosposal a success.

By this outsourcing business process, the company says that every client to date has experienced at least a 20 percent cost reduction. Besides this the buyer pays for only those services it uses.

Another outsourcing business process success for tomorrow...

Outsource business process - UK news

During a one-day joint symposium on "International Business Perspectives of India: 2003 and Beyond", the British Minister for Foreign and Commonwealth Office, Mike O’Brien admitted that India was the 'hottest' destination for outsourcing business process and software development. Britain has and will continue to benefit from outsourcing business processes from India. Including lower costs, the UK benefits from faster delivery, speed of marketing, quality and help in building new businesses. India tops the list of countries from where skilled manpower comes into UK with nearly 22,000 work permits issued in 2001-02.

The Outsourcing business process test...

US companies are trying telemarketing or "outbound" outsourcing services to find out which countries are cheapest and the best in terms of quality. Philippines, India and south american countries are the test beds for the telemarketing and outsourcing experiment. In a way, these countries are competing against eachother to stay in the "outsourcing race". With pay-for-performance the norm, cutting business process outsourcing operational costs will a major criterion to keep business afloat.