WHAT IS BPO

It is difficult to define what exactly BPO means. It encompasses a wide variety of activities such as human resources, accounting, financial research, marketing, sales, legal work, logistics and so on. Software services are also regarded as a part of the BPO market by many firms. Business process outsourcing (BPO) is the contracting of a specific business task, such as payroll, to a third-party service provider. Business Process Outsourcing (BPO) is outsourcing of business functions generally performed by white collar and clerical employees to achieve various benefits such as cost savings, better quality and ability to focus on core competence.... BPO is often divided into two categories: back office outsourcing, which includes internal business functions such as billing or purchasing, and front office outsourcing, which includes customer-related services such as marketing or tech support. BPO is a part of the outsourcing industry. It is dependent on information technology; hence it is also referred to as information technology enabled services or ITES.

ITES
Information technology enabled services, or ITES, is a form of outsourced service which has emerged due to involvement of IT in various fields such as banking and finance, telecommunications, insurance, etc. Some of the examples of ITES are medical transcription, back-office accounting, insurance claim, credit card processing and many more. Firms usually from developed countries outsource such services to countries like India, Bangladesh, China, Romania and Philippines in order to gain from large talent pool and low labor cost.

What constitutes BPO?

BPO deals mainly with non-core processes of an organization. Some of these processes have been briefly explained below. Administrative support: Outsourcing of administrative support functions includes data entry, document conversion, forms processing, document scanning, indexing, secretarial tasks support, etc. Customer relationship management: Customer service outsourcing includes outsourcing of functions such as customer support, order taking, customer service, product support, technical help desk, collections and market research. Refer to the report on Customer Service Outsourcing for more details. Document processes: Document process outsourcing includes outsourcing of customer facing, technical, marketing and communications, financial accounting, and regulatory compliance documents. Finance and accounting: Finance and accounting outsourcing includes services such as internal auditing, time and expense management, travel expenses, credit and debt analysis, collections, invoicing, accounts payable, accounts receivable and billing-dispute resolution. Human resources and training: Human resources (HR) is one of the most critical assets of a company and companies need to carry out various tasks such as recruitment, training, attrition/retention, database management, contract-worker management, etc., for their employees. Legal services: Legal process outsourcing (LPO) involves consulting, research, transcription, documents management, billing, translation and other administrative and secretarial support services required for various legal functions such as commercial litigation, arbitration and mediation, appeals, government contracts, legal risk evaluation, etc. Payroll maintenance and other transaction processing: This segment includes payroll, payment, check, credit card and stock trade processing. Forester research predicts transaction processing to be a large segment within the BPO industry soon, with a market size of USD 58 billion in 2008. Some vertical processes such as mortgage, loans and insurance claims processing are also being outsourced. Product development: Companies need to constantly innovate to remain competitive in the market. With the increasing specialization of expertise required to carry out product development, companies choose to outsource their R&D functions to vendors who have expertise in a given field. Over the past few years, numerous MNCs have initiated off shoring R&D to other countries including India which is emerging as a hub for R&D outsourcing.

Research and analysis: Companies require data and its analysis for making informed strategic decisions. These companies have started outsourcing their research and analysis requirements to vendors who specialize in typical research and analysis work such data analytics, financial analytics, market research, secondary research, primary research, industry overview, competitive intelligence, etc. Sales and marketing (including telemarketing): Sale and marketing outsourcing involves delegating parts of sales and marketing functions such as cold calling, email pitches, telephone surveys, lead generation, lead qualifying, appointment setting, sales team management, etc. Security: Companies have to search for new technologies and employ qualified security professionals to keep their data secure from theft. Maintaining these resources and implementing a fool-proof security policy is a difficult task which can be better handled by experienced third party security agencies. Security outsourcing involves management of investigative services, physical security, electronic security systems, computer and network security, etc.

Types of BPO Services

BPO services are generally categorized into horizontal and vertical services. These have been explained below: Horizontal BPO: Horizontal BPO involves function centric outsourcing. The vendor specializes in carrying out particular functions across different industry domains. Examples of horizontal BPO are outsourcing in procurement, payroll processing, HR, facilities management and similar functions. Automatic Data Processing (ADP) is an example of a horizontal BPO vendor. ADP focuses on providing services in horizontal functions such as payroll, HR, benefit administration, tax solutions, etc. However, according to Gartner, companies should focus on providing vertical services as the market matures. Vertical BPO: A vertical BPO focuses on proving various functional services in a limited number of industry domains. Healthcare, financial services, manufacturing and retail are examples of vertical BPO domains. EXL Service Holdings is a vertical BPO having focus on industry domains such as healthcare, business services, utilities and energy and manufacturing.

Industry size
The BPO industry in India is gaining momentum and promises to add 3.3 Million jobs in India a country where productive employment is scare. BPO promises to transform India economically much in the way as oil transformed the economies of West Asian countries. India has revenues of 6.4 billion USD [2] from offshore BPO and 36[3] billion USD from IT and total BPO. India thus has some 5-6% share of the total BPO Industry, but a commanding 63% share of the offshore component. This 63% is a drop from the 70% offshore share that India enjoyed last year, despite the industry growing 38% in India last year, other locations like Eastern Europe, Philippines, and South Africa have emerged to take a share of the market. China is also trying to grow from a very small base in this industry. However, while the BPO industry is expected to continue to grow in India, its market share of the offshore piece is expected to decline. The global BPO Industry is estimated to be worth 120150 billion dollars, of this the offshore BPO is estimated to be some US$11.4 Billion.

BPO Good way to reduce burden:

The advantages offered by outsourcing in general are valid for BPO as well, and these advantages act as internal drivers for BPO. In addition to these internal drivers, companies are lured to choose the BPO option due to the following external drivers: Robust IT and telecommunications infrastructure: The developments in IT and telecommunications infrastructure has enabled companies to transfer data to any place in the world instantaneously at very little cost. This infrastructure also allows them to increase their ROI and shareholder value. Pressure to lower costs: Companies are facing huge competition from their competitors to provide better services, and at the same time lower their costs. Companies are constantly innovating the way they are conducting businesses and BPO allows them to partner with external specialized vendors for efficient operations. Offshore BPO is cheaper than onshore BPO and many companies are now moving their operations to offshore locations, India being the most preferred destination. Little infrastructure for automation: The IT revolution has not achieved success in automating business processes and most of the business processes still need human labor for productive delivery. In such a scenario, resorting to BPO, which provides human labor at a lower cost, enables companies to maximize their ROI.

Why companies go offshore:

Some companies, however, go a different route and select the country for their BPO for this they evaluate the top vendors in that location. Their selection is based on :

Political stability. Availability of skilled resources. Infrastructure. Size and quality of the labor pool. Language and cultural issues. Data security. IP protection and software piracy Government support.

Some of the top offshore BPO service providers follow: In India, Nipuna, a subsidiary of Satyam Computers; Progeon, a subsidiary of Infosys; Spectramind, a subsidiary of Wipro, and WNS, owned by Warburg Pincus and British Airways, lead the way. In the Philippines, eTelecare and Ambergris Solutions compete for BPO business. In Russia, LUXOFT has surfaced as a leader. Risk in selecting offshore location:

Infrastructure instability Management of offshore resources Confidentiality of information Time zone differences Cultural differences Language barriers Unknown suppliers Uncertain legal rights Geopolitical instability

World's Best BPO Vendors

Owing to the huge opportunity that lies in BPO, large corporations have ventured into the business and have set up BPO operations all over the world. There is a strong competition among these multinationals and many organizations such as the Outsourcing Management Institute, the Chief Resource Officer Institute, Dataquest

and BP Orbit release BPO rankings each year. The Black Book of Outsourcing by Doug Brown and Scott Wilson provides a list of world's best BPO vendors for the year 2004-2005. The parameters used for ranking these vendors include customer satisfaction, employee satisfaction, reviews of global consulting firms, performance with respect to other vendors and client performance ratings. The top 10 BPO vendors have been listed in the Table below:

Table: World's Best BPO Vendors Nu m 1 2 3 4 5 6 7 8 9 10 ICICI One Source eFunds Global Outsourcing Convergys Affiliated Computer Systems Vendor IBM Global / Daksh Accenture Hewlett Packard MphasiS Ernst & Young / Capgemini Wipro Spectramind

Entry Card for a BPO career:

Customer relationship manager (CRM)/ Information Technology enabled services (ITES) companies are eagerly looking for people who have good communication skill in English language, basic numerical capabilities and the right attitude. Companies are willing to train people at all leaves including entry level. Considering the way industry has grown, there are also specialized courses that help a candidate get pass the recruitment process and tests. When it comes to hiring recruiting the parameters that one need to check for are

Communication Willingness to work 24 *7. Influencing skills. Relationship Building. Customer focus. Information handling.

Self motivation. Change orientation. Attention to details. Attitude of a team player Problem solving ability. Flexibility. Organizational understanding. Computer skills. Logic and reasoning.

BPO myths and realities:

There are many perceptions (and misconceptions) about the business process outsourcing industry and, especially, the international voice-based call centre industry. While there are many perceptions that are true, there are a lot of myths as well that have little connection to actual ground realities.

The Truth
BPOs offer top class compensation and faster growth in packages than almost any other industry in India today. BPOs enable youngsters to have fast-track careers, with higher levels of responsibility being delegated at fairly early stages in their careers. Voice-based real-time customer support work involves making key lifestyle choices with odd hours thanks to the time difference with clients in the US/UK. There is high level of accountability in BPOs as everything gets measured, starting from working hours to key deliverables such as customer satisfaction, call handle time, etc. Being a process-oriented industry, it involves doing similar things repeatedly, often leading to monotony as BPOs strive for greater efficiency and effectiveness through specialization. The industry is largely dominated by youngsters between 20 and 25 years for agents and 25 and 30 years for most middle management

India as A Rising BPO Hub:

A recent study has discovered that India is emerging as a BPO hub. India not only explicates three out of five top known worldwide outsourcing destinations, but also has the maximum number of rising cities in this field.

According to a study by Cyber Medias Global Services magazine, the top five wellestablished hubs for outsourcing include Bangalore, India's National Capital Territory, Manila, Mumbai and Dublin. The study conducted in association with Tholons, an investment advisory firm showed that Chennai, Hyderabad and Pune are the top three emerging hubs, whereas Kolkata is on fifth and Chandigarh enjoys the ninth rank in the list. The Indian BPO industry is constantly growing and a lot of Fortune 500 companies are outsourcing services to India. There are several reasons for India's emergence as one of leading outsourcing destinations. India is very rich in educated and talented human resource. India is one of the pioneers in software development. India has a mature industrial set up with world class systems. India has excellent technical facilities and infrastructure for setting up call centers. Time zone difference between India and America has also worked to the advantage of Indian BPO industry. India has an 8-12 hour time zone difference with respect to the US and other developed markets. Most of the Indian call centers servicing American customers have timings between 5:30 p.m. to 9:30 a.m. This time zone difference allows Indian companies BPOs to service American clients by working in the nights. Last, but not the least, India has a huge pool of English speaking workforce that provides excellent voice based services at extremely competitive costs resulting in huge savings for companies. Some of the leading BPO companies in India are: GE Capital, Convergys, Wipro, Spectra mind, WNS, Dell, Daksh e-Services, ICICI OneSource, and MphasiS.

Problems in Indian BPO:

Some of the problems afflicting Indian BPO industry are:

High attrition rate. Backlash in developed countries against perceived job losses due to outsourcing to India. The abrupt rise of the rupee against the dollar and pound has left many young BPO firms gasping for breath and the inherently lower profitability of this segment compared to the industry majors in IT services. High pressure from developed countries to achieve the targets. High Employees Turnover Ratio. Lack of technical knows how.

Youth shelving books for bucks:

In India, can one ignore the emerging situation where youth prefer money to education? The lure of big bucks offered by the BPO industry has seen a large number of students dropping out of colleges and opting for jobs instead. But this trend could snowball into something ugly 10-15 years down the line.

Why youths path ends on BPO:

So a year back, if you were smart, around 22-25 years of age, able to communicate well in English, a graduate or having an equivalent qualification and willing to work at night, you would have sailed through the interview in an international call centre the seat for BPO. At present, most of the eligibility factors for getting a BPO job have remained the same, save one. A number of BPO businesses are now recruiting undergraduates as well. BPO has provided employment to those who did not have access to higher education owing to financial or other such constraints Students who have no desire for further studies BPO sector has emerged as a savior for them. A number of academic institutions, which are already facing a dearth of good teachers, will find it increasingly difficult to retain the better ones, as this nascent but fast-growing industry lures them with a fat pay and an assured job.

BPO is not an end:

Youths path ends on BPO or it is a dead end. Has anyone ever thought Who will take the responsibility for the future of the country? What happens when the BPO bubble bursts? Or when the competition takes away the cream of the BPO business from India? And on the social plane, what about the thousands of college dropouts with no formal education and who may be left jobless owing to circumstances beyond their control? Is there any guarantee that there will emerge another business which can absorb the flood of uneducated unemployed, who could be suddenly out in the cold?

So many questions but a simple answer that What is required is a futuristic approach with futuristic solutions to meet the silent but sweeping challenges. Education should not take the backseat. It should be given the importance it deserves. The concern is that easy money too soon and at the expense of education can turn India into another America. What is needed are some effective disaster management solutions and strategies as far as BPO is concerned. Corporate venturing into the BPO business should look a little beyond their pockets and into the future further than the immediate bright horizon. What is needed are some effective disaster management solutions and strategies as far as BPO is concerned. Corporate venturing into the BPO business should look a little beyond their pockets and into the future further than the immediate bright horizon. Big corporate houses should give serious thought about providing support programmes that would give young people an edge no matter what turn the BPO industry takes. Rather than focus on costs, companies should look at how to maximize the quality of service they offer, by providing better training, a comfortable working environment and better management. That will improve staff motivation, increase productivity and reduce attrition rates, thus cutting costs.

Corporate world should have a thought Must we walk with blinkers, or look around to pick up danger signals, visualize and take responsibility for India's youth?

CAB TO CAR
BPO has become a smooth journey towards fulfilling the dreams. Big bucks, bigger ambitions, and even bigger aspiration keep life going. For instance, A 28 year old Sumeet Aggarwal works in BPO firm at Goregoan; currently he is working at top rung of his company. He earns handsome salary and is willing to splurge .Two years into job, and he owns a MARUTI SWIFT, APPLE IPOD, and he happily flashes his MOTORAZR with the Girlfriend by his side. His comfort level with debt is much higher than is father used to have, If he wants some luxury items, and is running short of money, he has the CREDIT CARD to fall back on. He is earning Rs. 35000 per month but he is not resting on his laurels. Kartik has an interesting take on why BPOs are still one up on another sector .This is the only sector in the country that absorbs fresh graduates, send people overseas within the months of joining the company, and facilitates jumps and transfer to varied operations. We are talking about a person living in Meera Road, who has never dreamt of leaving the shores of India, been sent to the US or UK for the periods of three months or more. Unlike the previous generation the genX doesnt wants to get ossified into one particular job they want to leap ahead. Like all the booms, the current job boom is not going to last forever. However one thing is for sure, that India is not going back to the era when pakki sarkari naukri used to be the collective dream of Youths. During the early stages of the industry, starting salaries were around Rs.5000 to Rs6000. now freshers are being paid anywhere between Rs.12000 and Rs. 150000. It has brought sizeable income to those who were worried about their careers and, more important, is a safe-margin business in foreign exchange for all leading companies in IT-enabled services. BPO has also brought significant increase in the income of various people other than the employees, these are the:

Transport service provider i.e. the vendors who provide vehicles for pick and drop of the BPO employees. The owners or supplier of food chain in the BPO coz now each and every BPO tries to be well equipped with a very good canteen facility.

'Can we get off the phone for a while?'

For many employed in the call center sector, "the daily experience is of repetitive, intensive and stressful work, based upon Taylorist principles, which frequently results in employee "burnout". And its causes are: The primary source of stress reported is inherent to the nature of the job: spending all day on the phone dealing with people one after another, day after day, is difficult. It was pointed out that managers face an inherent conflict between the need to reduce staff boredom and labor turnover, and the pressure to concentrate staff energies on telephone based work". It's almost like the army. It's very regimented. You punch in with a time clock. You come in and you sit down, and the numbers are all computerized. As soon as you finish a call, the minute you hang up another call comes up just this constant, all day, repetitiousconstant sort of like beating on a drum, but day after day. Its a machine-like and robotic job. Targets are a significant source of stress for workers as more and more importance is placed upon meeting them in an increasingly competitive business environment.

Health issues
The result of intense, stressful work may be an effect on workers' health. There are often high rates of absenteeism and sick leave reported in the literature, although there is relatively little exploration of these issues, particularly when compared to turnover. Tension. Sleeplessness. Headaches. Eye-strain. Repetitive strain injury (RSI). Voice loss. Hearing problems. Burn-out. Digestive System Related Disorders Depression Severe Stomach Related Problems

Do not care attitude for Personal Issues:

The young executives are getting more than five figure salaries per month in an early age. They tend to develop certain bad habits such as alcohol, smoking etc. The most common behavior is misuse of food, behave erratically in vans, and smoke in public places, misuse of telephones and other resources of the company. Executives develop friendship quickly and sometime the friendship breaks and there will be misunderstanding among the team members and naturally affects the team performance. Few of the boys and girls fall in love quickly. There are instances, where lovers fall apart, start disliking, creating troubles to each other and vitiating the atmosphere. They are immature, take instant decisions to break or unite and sometimes go to an extent of damaging others reputation. Absenteeism is very high in calls centers. In order to make quick money and to have options open to change the jobs in future will drive the employees to do part time work. Human body does not permit to stretch beyond one's capacity.

Coping with Stress:

Learning to become more aware of your own stress symptoms is the first major step in the stress management and healing process. Since stress is an inevitable fact of life that we can't always prevent, our efforts need to be focused on coping with stress more effectively. What follows is a description of a three pronged approach to stress management which includes

Behavioral/practical techniques, relaxation techniques and Cognitive/thinking techniques.

The behavioral/practical approaches to stress management include exercise and eating a healthy, balanced diet, which includes selections from the basic food groups. In addition, it is recommended that one avoid the excessive use of alcohol, caffeine and sugar, which contribute to fatigue and vulnerability to mood swings. It is also important to allow the body to rest and replenish to help inoculate the body against future stress. Building this stress resistance also includes scheduling time for leisure and pleasure, which provides for a more balanced, fulfilling life. Anticipating and preparing for recurrent stressors by managing time, setting priorities and limits, delegating responsibility, and not procrastinating are helpful stress reducing strategies. These techniques are effective stress management tools because their utilization is within our control. The relaxation approaches to stress management include a variety of techniques designed to help you effectively manage the body/mind tension. Progressive muscle relaxation is an active form of relaxation where you individually contract the major muscle groups of your body for about five seconds and then you relax the individual muscle groups for a five second holds. The contrast experienced by this exercise relieves muscle tension and relaxes the body. Some of the more passive relaxation approaches include listening to music, reading and using saunas and hot tubs to relieve tension. The cognitive or thinking approaches are an integral part of coping effectively with stress and now the primary focus of many stress management programs. The first step in the cognitive approach is to identify our thoughts or internal dialog that is negative, perfectionist, black and white, rigid and demanding. In other words, you are more likely to experience stress if you believe that you, the world and other people "should or must" behave in a manner consistent with your demands and standard.

CONCLUSION:
After analyzing and studying the topic BPO we can state that:

BPO is the process of hiring another company to handle business activities for you. This is probably the only industry that offers mass employment and has probably the highest growth rate. The BPO industry is versatile and allows individual to progress from low skill levels to those that require specialization. The career progression and opportunities the BPO industry offers are manifold. BPO is about delivering long-term benefits & measurable value to customers through: Business process re-engineering. Integrating technology. Knowledge services.

These were the benefit provided by the BPO but at the same time there are some problems need to be resolved.

BIBLOGRAPHY

Wikipedia. DNA newspaper. Google search. Chronicle Year Book-2007.

Contents

What is BPO. What constitutes BPO. Types of BPO. Industry Size. BPO - good way to reduce burden. Why companies go for offshore location. Worlds best BPO. Entry card for BPO career. BPO myths and realities. India as a rising BPO hub. Youth shelving books for bucks. CAB To CAR. Can we get off the phone for a while? Health issues. Do not care attitude for Personal Issues. Coping with stress. Conclusion. Bibliography.

International Marketing BPO

IBM Global / Daksh MphasiS Affiliated Eclerx Sparsh Convergys Young / Capgemini Source eFunds Global Outsourcing Wipro Spectramind Ernst & ICICI One Computer Systems Accenture Hewlett Packard