Role of BPO Sector in Developing Countries Like India.

BPO
Business Process Outsourcing:
Generally BPO means is the process of shifting an internal job process to an outside or external company which might have a completely different geographical location.

Evolution of BPO
BPO started as early as 1830s when America

commissioned the workers based in Scotland to build Wagon Covers and Ship Sails. By 1970 a lot of computer companies in US began to export their Payroll preparation systems. By 1980 almost all accounting works and even word processing tasks were outsourced.

History of BPO in India

In the early 1980s several European Airlines started

using Delhi as a base work for back office operations. British Airways one among them. In second half of 1980s American Express consolidated its JAPAC back office operations to New Delhi. In 1990s General Electric Started GECIS BPO. In 2000s a team from GECIS started EXL Services BPO.

Nature of Work
Apart from call centers work performed by BPOs are: Order entry Data Management Billing and Collection Internal Audit and Payroll Accounts Revenue Analysis Human Resource Administration Cash and Investment Management Insurance, Banking, Health, E-Commerce, Aviation

SWOT Analysis
Strengths Cheaper workforce Abundant manpower Round the clock advantage for western countries Operational excellence Lower attrition rates than in the west Well developed IT industry. Weaknesses Scarce foreign language skills Cultural differences Poor quality telecom infrastructure Political opposition from developed countries Expensive telecom & network infrastructure compared to developed countries Threats Political instability The anti outsourcing legislation by developed countries Other ITES destinations like Philippines, China & South Africa could have an edge on the cost factor Increasing technology automation

Opportunities A way to make India as most favored ITES destinations in the world Horizontal and vertical expansion of existing customer base into new market Increasing awareness of outsourcing services $100 billion market by 2011

Types of BPO services

1. Horizontal BPO
It involves function centric outsourcing. The vendor specializes in carrying out particular functions across different industry domains. Examples of horizontal BPO are outsourcing in HR, Payroll Processing & similar.

2. Vertical BPO
A vertical BPO focuses on proving various Functional services in a limited number of industry domains. Healthcare, Financial services, manufacturing & retail are some of the examples.

Chart:
Recruitment Sales Procurement Process Identify open position Search Candidates Conduct Interviews Identify Customer Obtain Order Deliver Product Identify Supplier Obtain product Catalogue Select Supplier Process A

Process B

Process C

Search Candidates

Receive Payment

Send Payment

Process D

Vertical Outsourcing

Horizontal Outsourcing

Recruitment Process
1. 2.

3.
4. 5.

6.

Self Introduction Aptitude Test Telephonic Interview Typing Skills Talk on Topic or Group Discussion HR Round

Benefits to BPO Employees

Provident Funds Accident Insurance Scheme Paid Days Off Maternity Leave(For Female Employees) Refreshments Pick & Drop facility

Recreation Centers
Regular Health Check Ups

Current Trends In Indian BPO

Greater IT adoption in Retail, Healthcare, Telecom &

Banking Financial services & Insurance(BFSI). 80% of growth are coming from new areas. BFSI contributes almost 41% to the industry revenues. BPOs are moving up to provide high end services such as business analytics & knowledge based services through a mix of re-engineering skills, technology enabled platforms, new operating models & increased depth of services. 6% of BPO exports raised(Over Rs.57,000 crores)

Top 15 BPOs in India

1.
2. 3.

4.
5. 6. 7. 8.

Genpact WNS Global TCS IBM Daksh Wipro First Source Aditya Birla Minacs Worldwide Aegis

9. Infosys
10. HCL 11. EXL Service Holdings

12. Intelenet Gl
13. Hinduja Global

Solutions 14. 24/7 Customer 15. Mphasis

BPO Role in Indias Economic Growth

The Growth in the contribution of BPOs to GDP has

shown a steady rise from 1.2% to 5.4%. The growth of IT-BPO sector during the past 10 years has raised up from US$4.8 billion to US$47.8 billion. Employment generated is 1.6 million BPO sector had brought lots of foreign investment to India It generated export revenues of US$10 billion during last financial year It brought openness in trade.