Académique Documents
Professionnel Documents
Culture Documents
Submitted To
Prof. Mridula Goel
Faculty
Jaipuria Institute of Management
Submitted By
Prateek Shrivastav
Students,
Jaipuria Institute of Management
7 December 2007
Jaipuria Institute of Management, Lucknow
OUTSOURCING
WHAT IS OUTSOURCING
Management
Better performance
Lower cost
Security
Process maturity
What should a company Outsource?
Outsourcing is a technology-driven, process-centric service business.
Business process outsourcing (BPO) refers to definable, repeatable business
processes that involve scale and volume. Research and Analysis outsourcing
is the higher end of the BPO spectrum, involving advanced analytical skills,
domain knowledge, expertise and judgment.
When should a company Outsource?
When you want to focus on your core business and leave tasks that are
not mission-critical to those expert in doing them
When you want it fast, you want it now, you want it cheaper and better
- and you don't have the time, money and people to do it all yourself
When you need specialized skills which are which aren't readily
available in your market - or cost the earth
Cost savings: The lowering of the overall cost of the service to the
business. This will involve reducing the scope, defining quality levels,
re-pricing, re-negotiation, cost re-structuring.
Time zone: A sequential task can be done during normal day shift in
different time zones - to make it seamlessly available 24x7.
Same/similar can be done on a longer term between earth's
hemispheres of summer/winter.
Increase in business: Benefit of outsourcing is seeing a big increase
in your profits, productivity, level of quality, business value, business
performance and much more.
Concentrate more on your core business: One of the benefits of
outsourcing is that your organization will be free to concentrate on
your core business. By outsourcing all your non-core functions, your
employees can be put to better use and you will be able to see a huge
growth in your core business.
Make faster deliveries to customers: Another benefit of outsourcing
is that you can make quicker deliveries to customers. Your outsourcing
partner will be able to provide faster deliverables and you in turn will
be able to make quick deliveries to your customer. Faster deliveries
can also help you save on time.
Improved customer satisfaction: With timely deliveries and high-
quality services you can impress your customers. Outsourcing can
help you benefit from increased customer satisfaction and your
customers will remain loyal to your organization.
DISADVANTAGES OF OUTSOURCING
Lose of control
Quality problems
Slow response time
Can't understand foreign accents
Slow resolution times
Can't produce desired results
Reduced sales
Irritated customers
Irritated employees, unions, people within community
TYPES OF OUTSOURCING
NEARSHORING
Nearshoring is one of the forms of outsourcing, where an organization
outsourcers its business processes to an outsourcing partner who provides
cheaper services. The main differentiator between offshore outsourcing and
nearshore outsourcing is that the outsourcing partner in nearshore outsourcing
is located geographically closer than the outsourcing partner in offshore
outsourcing. The term "Nearshore" has been taken from the fishing industry
and now it is used widely in the world of outsourcing.
Advantages of Nearshore Outsourcing
Closer proximity
Both the outsourcer and the vendor are in the same time zone
Greater efficiency
OFFSHORING
Offshoring simply means having the outsourced business functions done in
another country. Frequently, work is offshored in order to reduce labor
expenses. Other times, the reasons for offshoring are strategic - to enter new
markets, to tap talent currently unavailable domestically or to overcome
regulations that prevent specific activities domestically.
ONSHORING
Knowledge process can be defined as high added value processes chain where
the achievement of objectives is highly dependent on the skills, domain
knowledge and experience of the people carrying out the activity. And when
this activity gets outsourced a new business activity emerges, which is
generally known as Knowledge Process Outsourcing. Knowledge Processing
Outsourcing (popularly known as a KPO), calls for the application of
specialized domain pertinent knowledge of a high level.
In fact, it is the evolution and maturity of the Indian BPO sector that has
given rise to yet another wave in the global outsourcing scenario: KPO or
Knowledge Process Outsourcing. The success achieved by many overseas
companies in outsourcing business process operations to India has
encouraged many of the said companies to start outsourcing their high-end
knowledge work as well. Cost savings, operational efficiencies, availability of
and access to a highly skilled and talented workforce and improved quality
are all underlying expectations in outsourcing high-end processes to India.
BUSINESS PROCESS OUTSOURCING
Business process outsourcing (BPO) is the contracting of a specific business
task, such as payroll, to a third-party service provider. Usually, BPO is
implemented as a cost-saving measure for tasks that a company requires but
does not depend upon to maintain its position in the marketplace. BPO is the
process of hiring another company to handle business activities for you.
Business process outsourcing is the latest thing to affect all the industries in a
positive way. (BPO) Business Process Outsourcing has a common thing for
every business. It helps the businesses take care of certain tasks, which, if
done in house, will prove to be nothing but a waste of time, and both financial
and human resources.
Every business has various tasks to be taken care of, both internal and
external. These tasks also involve some, not worthy of the time, money, and
manpower, which could be spent on something better and more productive.
But still, these tasks have to be finished. This is where BPO business process
outsourcing comes in handy.
A company can acquire business process outsourcing service for many types
of work. But, the services provided are broadly divided into two groups. The
first one is for the internal operations or tasks, and is called the back office
outsourcing. It tackles various operations within the organization. For
instance, a company may hire a business process outsourcing company for the
purpose of hiring or payroll.
The other type of business process outsourcing services deal with the external
operations of a company. These could be anything such as providing customer
services, providing technical support to the customers, or anything similar.
Such services are called front office outsourcing.
Benefits derived from BPO can be summarized as follows:
Productivity Improvements
Access to expertise
Cost savings
Improved accountability
Improved HR
Opportunity to focus on core business
EFFECT OF BPO ON EMPLOYMENT
The continuously growing BPO sector in India is the new call for young
generations of the country who are on the verge of make their careers. The
BPO industry boom in India is bringing along with numerous of job
opportunities for young as well as old from various different backgrounds.
People with clear voice modulation can account for call center facilities
thriving in India. All the major Product and Service providing companies
longs to have a strong customer based program to enhance their customer
base. As such they implement call center facility that deals with customer
through telephones. The inbound and outbound calling ensures that there is a
constant touch with the customers.
Standard salary for call centre worker in India: around Rs.1.2 lakh or
Rs.10,000 per month.
During the first half of 2007 was showing a moderate trend of growth which
is registered at 14%. Five years ago, the growth in this sector was quite low
due to less contracts but the situation is worse now. However, the growth of
the BPO sector is expected to improve.
Indian BPO sector is facing competition from countries like Philippines,
Mexico, Malaysia, China, and Canada.
Superior competency
24 hour service
Economy of scale
India is leading the list of the most favored outsourcing destinations across
the world has a proven process maturity model and has captured major share
of the offshore market. The significant increase in offshore outsourcing is in
part, a result of the quality work that India has provided for US companies
and others. There are about 300 million English-speaking Indians, so
language isn't a barrier, and India 's labor costs, though rising, remain low.
India has become the world's outsourcing hub. India offers many competitive
advantages such as technological agility, quality, flexibility, cost control
and faster time-to-market. India is a talent rich country and currently it
exports software to more than 95 countries around the world. India is the best
place to outsource to as you can avail the best-of-breed services at a cost-
effective price.
SOCIO-CULTURAL ENVIRONMENT