Вы находитесь на странице: 1из 16

Outline For setting a Captive unit in INDIA Proposal Number Version Date

Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

An Outline for Building a captive Unit in India


for ETA-Ascon Group and Al-Ghurair Group
of Companies
ETA-BPO AND ETA-EPO

The ETA- BPO Business Plan is confidential and contains proprietary information including trade
secrets of ETA-ASCON. Neither the Plan nor any of the information contained in the Plan may be
reproduced or disclosed to any person under any circumstances without express written
permission of M.S.S.Mohamed Niyaz

By M.S.S.Mohamed Niyaz -1
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

INDENT AUDIENCE

AL-Haj S.M. SALAHUDEEN


Managing Director and President
ETA-ASCON and ETA-STAR Group of companies

S.AHAMED SALAHUDEEN
Director
IT- Intuitive
ETA-ASCON and ETA-STAR Group of companies

Board of Director
ETA-ASCON Group companies

Prepared by: M.S.S.Mohamed Niyaz,


Document Version: BPO1.0
Date: April 30, 2006
E-Mail: niyaz3@hotmail.com
Mobile: 9884093988/24750128

By M.S.S.Mohamed Niyaz -2
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

INDEX
Executive summary ................................................................................................. 4
Early history.............................................................................................................. 4
The arrival of the MNC ........................................................................................... 4
Evolutionary path .................................................................................................... 4
What is BPO? ............................................................................................................ 5
What is EPO .............................................................................................................. 6
Objective of ETA-BPO & EPO................................................................................. 6
Why ETA should build an captive unit and how its Benefit.............................. 7
Sample Case study --Ascon Purchase department ............................................. 8
What are the job functions that can be moved to India...................................... 9
Target division in ETA-ASCON Group and AL-GURIR Group’s.................... 9
Why India................................................................................................................ 11
Risks ......................................................................................................................... 11
Rewards................................................................................................................... 11
Advantage India..................................................................................................... 12
What Next for India............................................................................................... 12
How to move all function to India – Set Up Phase ........................................... 13
Destination Chennai – Why.................................................................................. 14
Future and Scope of BPO ……………………………………………………15

By M.S.S.Mohamed Niyaz -3
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

Executive summary
In both Business and Technology change is inevitable, adaptability often
Differentiate Companies and Determine Business Success. When the human
resource of an organization is large and mid size companies, the typical dilemma
a CEO goes through is - Should I manage it on my own or should I outsource?
The intention is not to choose the most preferred option, as it would depend on
customer environment and other internal factors. However this document can
serve as a quick checklist to consider appropriate aspects for success and cost
saving.

Early history

The ITES-BPO industry in India is a relatively young and nascent sector, barely
over five years old in this business segment. Despite its recent arrival on the
Indian map to form a part of the export-oriented IT Software and Services
environment, the industry has shown amazing growth and future potential.
According to NASSCOM, there are over 200 companies participating in the ITES-
BPO segment and the numbers are growing every year.

The arrival of the MNC

The early entrants—subsidiaries of foreign companies that were set up to cater to


the process off shoring requirements of their parent companies—are currently in
the phase of maturation and consolidation. Having successfully established
operations in India and enabled their parent companies to achieve key bottom
line benefits, these “captive,” wholly dedicated set ups including names such as
American Express, British Airways and GE Capital, are in the stage of expansion.
Most have moved from their single site status to multi-center locations. The
majority has also scaled their operations—adding seats and capacity—to include
more processes and customers.

Evolutionary path

The ITES-BPO market, which came into existence with the entry of the MNC,
expanded its base once Indian IT software and services companies, especially the
ones with a strong base of outsourcing/off shoring experience and customers,
stepped into the market. Today, these IT leaders are leveraging their existing
strengths such as broad skill sets and global clientele, to create a portfolio of
ITES-BPO offerings.

By M.S.S.Mohamed Niyaz -4
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

The market has gained additional players with the arrival of non-IT companies
on ITES-BPO turf. A number of leading industrial groups in the country have set
up ITES-BPO facilities with a view to participate in this emerging opportunity.

What is BPO?

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 outsourced organization. This
generally involves an organization's non-core processes, in simple words BPO
means Business process outsourcing. That is executing business operation from
a remote location with lower cost and high quality of work. BPO other wise
called ITES (IT enabled Services)

BPO function are Departments like Customer Care, HR, Purchase, Accounts,
Finance, Marketing and research, R&D of manufacturing, biotechnology, and
engineering industries. Due to advancement in technology like paperless office,
remote Infrastructure and mobile computing led many changes in routine
operations of an organization. This made possible of moving data and job’s from
one location to another.

BPO consist of two types of work voice based process and non voice based
process:
Voice based process
1. Customer care support (Technically and Non-Technically )
2. Marketing department (Survey, product marketing , research )
3. HR (Interview , Verification process, Pay roll processing )
Non-Voice based process
1. Accounts
2. Finance
3. Purchase
4. Legal Process
5. Marketing research
6. Data processing
7. R& D (Bio technology , medical lab testing , chip designing ,engineering
process
8. Billing process( Medical billing , Insurance claims, )
9. Human Resource Process
10. Engineering Process (cad drawings , quantity surveys , architecture works
Structural works and other engineering works )

By M.S.S.Mohamed Niyaz -5
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

What is EPO?

The term EPO is Engineering Process Outsourcing which is similar to BPO


which consist of following process like Architectural Design services like
Building and Structural Design, Exterior/Interior 3D Rendering, Plans,
Elevations & Sections, Cost Estimation, Quantity Survey, Structural, Cad
Designing works, Design and Testing of engineering process like switch gear,
elevators, air-conditions, and other air-conditions related works. Mechanical,
Automobile, Aeronautics Design works. Power sector and many engineering
related jobs

Engineering services outsourcing in India has the potential to grow to $10 billion
in three to five years, from its current level of $3.5 billion, according to
NASSCOM. India with its wealth of expertise in Architecture, Engineering &
Construction (AEC) is in a strong position to give you solutions that combine
aesthetics, functionality and cost. We can take essential tasks in the Architectural
Design Process off your shoulders.

Objective of ETA-BPO & EPO

The three main objectives of ETA-BPO & EPO are to build a captive unit in India
for its parent concern; ETA-ASCON Group of Companies. To deliver cost
effective services and solution. On reaching maturity stage the company will
start giving services to other companies in U.A.E., U.S, U.K, EUROPE, and other
high cost destination.

The second objective is to build a practice for currency ratio of Rupees: AED.
Since most of the Indian BPO companies work Rupees: Dollars ratio. These Rs:
AED ratio gives a competitive advantage in terms of procuring future project
and providing innovative cost advantage to clients.

The third Objective is to merge EPO with GIS division and to form a company
called ETA- ENGINEERING TECHNOLOGY SERVICES. This merger helps
both EPO and GIS to work on same cost in terms of software as well as
hardware, also sharing of technical workforce

What is an CAPTIVE UNIT


Captive centers are those centers that are operated for servicing their own clients
and not third party clients.

By M.S.S.Mohamed Niyaz -6
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

Why ETA should build an captive unit and how its Benefit

ETA–ASCON well knows in Middle East as a largest workforce with High


Quality Standards. Since the day its started the Congorilomate, today spread
around 50 division starting from construction ASCON which is started in 1974
which has spread as road contracting, marbles, joinery and profiles. Then M & E,
which is one of the major electromechanical contractors in U.A.E., has sub
division like MHI, PPD, PCS, and NMD. ETA MELCO started in 1975which has
tremendous growth in market share growing above 55% which also sub division
like Alucobond, Automatics, Waagner-Birgo, Mitsubishi Diamond vision, HV
and MV Power cables. Trading and Shipping division is truly a multi-faced and
global enterprise with trading from agro products to chemical and also into
general trading of spares for oilfield equipment. Also today this division also
into JV with AJMAN Government to operate its port (AJMAN PORT) and also
emerged as a largest shipping company in Middle East. CARS a leading
Automobile dealer and Rental company, today CARS runs an operation arm for
Dubai Taxi, Sharhah Taxi and also Bahrain state bus operation’s. The name and
brand consistency continues….
Today the company has 31,733 employee (Source: www.etaascon.com) out
of which around 5000 are white color jobs. These jobs spread around 20 countries
and 140 branches. Now Dubai serves as a Headquarters and Central hub for
managing these locations. The target employee is around 2500 from all division.
These targeted will be moved to India.

Benefits
Building a CAPTIVE unit is an essential for ETA-ASCON, In order to integrate
all the job function’s and control cost. By moving selected jobs will enhance cost
effect as follows, salary will be paid in Indian currency, Accommodation is very
reasonable, no Visa issues and charges, no travel charges and other benefit.
Increment will be in Indian currency, reduction in real estate space maintenance
cost and miscellaneous expenses in terms of AED. The ultimate benefit ETA can
increase Human Resource for any specific task since the wages paid in INR; most
of the divisions are Contracting Division. Thus cost factor helps them to quote
best price in their TENDERS and also help’s to control operation cost. Even
division like Trading, Retails and Corporate services has huge benefit. The cost
which saved by salaries and other operating cost will help the concern division
to allocate fund for future spending or starting up new division’s (this again
creates new jobs). Most important, the company can concentrate on core revenue
bearing activity.

By M.S.S.Mohamed Niyaz -7
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

Sample Case study --Ascon Purchase department

Purchase manager
Role: His day-to-day interaction daily starting from ED , GM’S , AGM’S , PM , all
site engineers and all the store keeper’s and most importantly with vendors
submit report keep track of material movement . Track all the activity of his
department personnel.
So it’s impossible to move his job to India
Salary AED
Other benefit
Seat space = 1
Other maintenance cost = for 1 person

Asst Purchase Manager or Executive


Role: Has similar role of purchase manager. By means of E-enabled application
we can move asst. manager to India who can do research over internet for
material cost, do requirement analysis of sites, and check stocks of central store,
plan future procurement based on forecast made by quantity survey department
from a remote location. Send enquires to suppliers by email; by means of VIOP
track all activity sitting in India. By Video conference, he can attend all the
meetings.
The following are not required to pay in AED for Asst Manager or Purchase
executive
Salary INR
Other benefit
Seat space = 1 or 2
Other maintenance cost = for 2 person

Purchase assistant‘s 10
Role: Data entry, keep track of indent, purchase order, material management
Either all of them or except few others can be placed in INDIA. Since the no of
people is very high, we can split the work time makes them work 24X7. This will
further enhance the work process by working 24 hours a day monitoring all sites
movement.
The following are not required to pay in AED
Salary INR
Other benefit
Seat space = 1 or 2
Other maintenance cost = for 10

By M.S.S.Mohamed Niyaz -8
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

From the above simple study which gives an outline how to save considerable
amount of operation cost and other expense by integrating activity and moving
those jobs to India. Jobs from other function like Accounts department, Human
Resource, Cost control, Draughtsman and other CAD designer, planers,
surveyor, document controller and other technical engineer who has less
interaction with site’s and other department ‘s can be moved to India

What are the job functions that can be moved to India

¾ Accounts Department

¾ HR- Department

¾ Admin Department

¾ Finance Department

¾ Purchase Department

¾ Cost Control Department

¾ Draughtsman

¾ Surveyor and other CAD based designer

¾ Technical Engineer / Tendering Engineer

¾ Secretary

¾ Other Executive’s

By M.S.S.Mohamed Niyaz -9
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

Target division in ETA-ASCON Group and AL-GHURAIR


Group of Companies

¾ Engineering and Construction

¾ Trading and Shipping

¾ Manufacturing and Assembling

¾ Facilities management & environment and Automobiles

¾ Retail and leisure

¾ Corporate services
(All its Back Office functions)

¾ Mashreq bank

¾ Masafi waters

¾ N.C.C.

¾ Gulf extrusion

¾ Other group companies of AL-GHURAIRS

By M.S.S.Mohamed Niyaz - 10
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

Why India?
India has always had enormous potential but a difficult time living up to it. In
the past, this giant, impoverished inward-looking nation remained in the
shadows of the global economy despite a world-class workforce. Every time
India seemed ready to explode, unstable governments, political opposition, a
bloated bureaucracy, communal violence, Pakistani relations, etc. held the
country back. However, the Indian economy is finally surmounting some of the
obstacles that have traditionally been cumbersome to growth. Today, India's
economic growth rate is among the fastest in the world, based largely on
Information Technology and knowledge-based industries. India is providing an
IT workforce for MNC companies around the world and is on the path to
becoming the "Knowledge and Resource Center" for the global technology
economy. The largest complaints of outsourcing to India have revolved around
the difficulties of communication and meeting deadlines. Also important is the
West's concern about security issues, notably data privacy laws and cyber-
terrorism. As a result, Western corporations are likely to keep crucial R&D and
the bulk of back office operations close to home. But the most serious ‘problem’
faced by India's fastest-growing sector is how to cope with rapid growth. With
more companies expected to jump on the outsourcing bandwagon over the next
several years, India may have a difficult time recruiting enough high-quality staff
to meet demands.

Risks
Outsourcing to India does have its risks including:
• Inefficient government policies and taxation
• Corruption in the political and bureaucratic system
• The caste system prevents hundreds of millions of Indians from having their
needs and demands heard and acted upon
• Woefully inadequate infrastructure from roads to telephone networks
• Volatile relations with neighboring Pakistan and China
• With agriculture still almost one-quarter of GDP, India's growth numbers
literally depend on the adequacy of the annual monsoon

Rewards
• One billion consumers
• World’s largest democracy
• Low labor costs
• Labor force of 400 million people (three times that of the US)
• Huge English speaking population
• World class education and mathematical prowess
• 250,000 annual Engineering graduates
• One of world’s largest software industries

By M.S.S.Mohamed Niyaz - 11
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

Advantage India

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 CMM 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.

What Next for India


In the upcoming years, expect India to continue to move up the food chain and
take on some of the more complex outsourced tasks while more back-office jobs
move to rock bottom wage countries. The US economy, at $10.7 trillion, is still
almost twice the size of China's ($6.3 trillion) and three times the size of India's
($3.6 trillion), but according to Harvard Economist Jeffrey Sachs, “by 2050, China
and maybe India will overtake the U.S. economy in size.” Within a decade, the
new consumer base in China and India will be driving the world. While the chip
and hardware segments may take a while to mature, India will continue
attracting multinationals eager to set-up shop and serve the massive Consumer
Market.

By M.S.S.Mohamed Niyaz - 12
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

How to initiate functionality in India – Set up Phase

¾ Company Incorporation

¾ STPI Approvals

¾ Income Tax Approvals

¾ Import Export Code No

¾ Custom Bonding

¾ Approval from D O T

¾ Registration with sales Tax Authorities

¾ Labor Law Approvals

¾ Local Telephone Connectivity

¾ Real estate space (ETA-ASCON which is already constructing ETA-


TECH PARK)

¾ Analyzing Software, hardware and other technologies

¾ Setting up Data centre and other technologies facilities

¾ Launching pilot batches

¾ Rollout full fledge operations

By M.S.S.Mohamed Niyaz - 13
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

Destination Chennai – Why

Manpower: 100,000 college/university graduates per year


Telecom Infrastructure: Has 14-16 prominent Internet service providers, with
five telecom service providers.
Emerging Trends (Verticals): R&D, Medical Transcription, Back Office, Financial
Processing, CAD/CAM and is slowly emerging in Software development.
Real Estate (Average rents US$/ Sq Ft/ Month): 0.712 0.78
Some of the major IT/ITES companies situated in Chennai: Verizon, EDS,
Hexaware, Sutherland Global Services Pvt Ltd, HP eGlobal, Ford Motors, The
World Bank

• Area: 174 sq km
• Population Density: 36,923 persons per sq km
• Sex Ratio: 950
• Literacy Rate (city): 73.02%
• Net State Domestic Product: Rs.1178.25 Billion
• Per Capita Net State Domestic Product: Rs.19, 141
• Popular Languages: Tamil, Telugu, Malayalam, kannada
• Urbanization Rate (state): 43.85%

By M.S.S.Mohamed Niyaz - 14
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

Future and Scope of BPO


Many countries found outsourcing as a healthier economic factor. This trend will
continue for another two decade without any doubt. But due to some political
happening like US politician’s who opposed outsourcing U.S. PORTS
management to DUBAI ports might look like a setback. But this will not happen
for a long time, as long as companies who need to outsource certain jobs to low
cost wage locations in order to save and recreate new jobs.

Sl.No Number of U.S. Jobs Moving Offshore


Job Category 2000 2005 2010 2015
1 Management 0 37,477 117,835 88,281
2 Business 10,787 61,252 161,722 48,028
3 Computer 27,171 108,991 276,954 72,632
4 Architecture 3,498 32,302 83,237 84,347
5 Life Sciences 0 3,677 14,478 36,770
6 Legal 1,793 14,220 34,673 74,642
7 Art, Design 818 5,576 13,846 29,639
8 Sales 4,619 29,064 97,321 26,564
9 Office 53,987 295,034 791,034 1,659,310
Total 102,674 587,592 1,591,101 3,320,213
Source: U.S Department of Labour and Forrester Research, Inc.

By M.S.S.Mohamed Niyaz - 15
Outline For setting a Captive unit in INDIA Proposal Number Version Date
Client Name: ETA-ASCON, Dubai ETA BPO-1.0 1.0 30/04/06`

Conclusion
ETA-BPO will not only help save on cost but also initiate another
success in the ETA history

Document History

Version Submitted by Submitted To Submit date Comments


1.0 M.S.S.Moahmed AL-Haj 28/05/2006 This version contains outline
Niyaz S.M.Salahuddin information Does not have
Managing Director and detail marketing plan Does not
President ETA- have detail analysis of
ASCON financial projection. Since
Plan is about service based
business which depends upon
cost factor based on HUMAN
resource
2.0 M.S.S.Moahmed 30/11/2006 This version will have
Niyaz complete Marketing Plan
along with detail of Financial
forecast

By M.S.S.Mohamed Niyaz - 16