Top PDF India and Business Process Outsourcing

India and Business Process Outsourcing

India and Business Process Outsourcing

o Operate 24 hours a day and 365 days in the year, and o Reduce the procedure involved in retrenching employees, if certain conditions are satisfied (Nasscom-i, 2005). Currently, the IT/ITeS sector is devoid of the presence of trade unions. Existing unions appear to be unprepared to enter the new economy, but there is also a growing sense, as one manager put it “it’s not a question of if, but of when” a trade union presence will develop. Considering the massive increase in employment in the ITeS industry and work environments characterised by round the clock work shifts, monotony, burnout and performance based employment, the question of whether trade unions will enter this new age industry raises heated discussion amongst politicians, trade unionists, industry analysts and employers. The employers’ view is that there is no need for an external entity to represent employee voice because the IT/ITeS sector needs more people than it can get due to its phenomenal growth rate. This fact is said to promote best practices in people management and according to Bhargava, the former CEO of Progeon, “there is more that is good here than it has ever been in any single economic sector of India”. Attrition rates in the industry, however, testify to alternative realities. More than likely, should the manager’s prognosis cited above come to pass it will be at individual worksites, generated by specific grievances, and will assume the form of enterprise unionism. In the meantime, internal employment relations are largely regulated through HR practices, which are described in the next section.
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INFORMATION TECHNOLOGY AND BUSINESS PROCESS OUTSOURCING TO INDIA: IMPLICATIONS AND CHALLENGES

INFORMATION TECHNOLOGY AND BUSINESS PROCESS OUTSOURCING TO INDIA: IMPLICATIONS AND CHALLENGES

Analysis, Outsourcing, Business Process Outsourcing, India INTRODUCTION The dramatic increase in the number of companies outsourcing their Information Technology and Business Processes (IT-BPO) to foreign shores over the last several years is an area of growing concern to many Americans [11, 12, and 17]. The main advantage of offshore outsourcing is cost cutting and savings, but it is difficult to get an objective view of this topic because many reports and articles have a vested interest in their position that is effected by economic or political concerns [4, 6, 8, 9, 11, 12, 14, and 19]. Many of us can personally still recall H. Ross Perot, in his bid for the Presidency during 1992, claiming NAFTA would create "a giant sucking sound to the south" such that no jobs would remain in the US. Dire predictions have been around as long as the movement of jobs has existed.
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Rural Business Process Outsourcing in India Opportunities and Challenges

Rural Business Process Outsourcing in India Opportunities and Challenges

India has now achieved the status of being the ‗most preferred location‘ for business process outsourcing (BPO) for business corporations located in the US, UK and other English speaking countries. Availability of skilled manpower at low cost, a huge English speaking population, and appropriate infrastructure have been the key reasons for these corporations to outsource their business processes to India. But sustaining the cost saving potential on account of outsourcing is the major challenge faced by the industry. The rapid expansion of BPO companies in select metropolitan cities (Tier 1) caused intense competition for available talent and this led to frequent poaching of staff. This has led to increase in salary costs and pressure on sustaining the cost saving potential on out of outsourcing. Managements of IT/BPO companies find that outsourcing their work to a rural area or Tier II/Tier III city in India (hereinafter referred to as ―Rural BPO‖) not only yields better profits without sacrificing quality 1 , but also reduces their headache in human resource management. An urban based Indian company may pay an employee INR 30,000-40,000 per month. But without sacrificing on quality or time, the same work could be done in rural areas and Tier Two cities at INR 15,000. 2 Moreover this is now enabled by extensive network connectivity. Rural BPO is one of the few avenues of employment for rural India and an attempt to combine entrepreneurship and social empowerment bridging the ever increasing rural-urban divide 3 . This article tries to analyse the opportunities and challenges of Rural BPO Sector.
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Underlying model of business process outsourcing (BPO) in India

Underlying model of business process outsourcing (BPO) in India

preeti_s27@yahoo.com Abstract In the new policy regime, the regionalization of economic activities has taken place at a pace ever than before. The new regime is characterized by an interesting dichotomy, i.e., free global mobility of capital coupled with restricted mobility of labour. This dichotomous behaviour, with information technology enabled services acting as a catalyst, has altered the age-old industrial organization. It has given rise to new production and marketing organization systems. Restricted global mobility of labour has compelled the big corporate houses to outsource many of their processes and functions to those parts of the globe where the specialization and comparative cost advantage exists. In this context, the work is an attempt to capture the structure and dynamics of business process outsourcing, with special reference to India. The analysis is based on financial statements of seventy five companies covering a period of ten years. The broad finding of the work is that the emerging model of business process outsourcing industry is a “high-risk quick-buck model” that needs immediate policy intervention to ensure its sustainability and transparency.
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Employee Turnover in the Business Process Outsourcing Industry in India

Employee Turnover in the Business Process Outsourcing Industry in India

THE BPO SECTOR IN INDIA There were various catalysts that led to the boom in business process outsourcing in India in the mid-1990s (see Dossani and Kenney, 2003 for a comprehensive discussion). The growth of the BPO industry capitalized on India’s reputation as a software services provider, a reputation that first developed during the Y2K crisis. This reputation, alongside a large English speaking workforce and low costs (Indian costs are about 20% of U.S. costs in business processes), coupled with the time differences (India works while the U.S. sleeps), resulted in the establishment of call centers and back office services. The pioneering efforts of some MNCs in attempting to re-engineer business processes for cost savings paved the way for many others to outsource to India. Specifically, General Electric, American Express, and British Airways were quick to capitalize on the huge salary cost differentials between similarly trained employees in India and the United States. These MNCs also demonstrated that relocation could be undertaken with minimum disruption. And improvements in the enabling environment— notably the availability of telecommunications bandwidth at increasingly lower rates, the ability to digitize documents, and the usage of standard software platforms in corporate information systems—played a key role too.
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Underlying model of business process outsourcing (BPO) in India

Underlying model of business process outsourcing (BPO) in India

Underlying Model of Business Process Outsourcing BPO in India Singh, Inderjeet and Singh, Lakhwinder and Singh, Preeti Department of Economics, Punjabi University, Patiala 147002 India.[r]

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Underlying model of business process outsourcing (BPO) in India

Underlying model of business process outsourcing (BPO) in India

In the new policy regime, the regionalization of economic activities has taken place at a pace ever than before. The new regime is characterized by an interesting dichotomy, i.e., free global mobility of capital coupled with restricted mobility of labour. This dichotomous behaviour, with information technology enabled services acting as a catalyst, has altered the age-old industrial organization. It has given rise to new production and marketing organization systems. Restricted global mobility of labour has compelled the big corporate houses to outsource many of their processes and functions to those parts of the globe where the specialization and comparative cost advantage exists. In this context, the work is an attempt to capture the structure and dynamics of business process outsourcing, with special reference to India. The analysis is based on financial statements of seventy five companies covering a period of ten years. The broad finding of the work is that the emerging model of business process outsourcing industry is a “high-risk quick-buck model” that needs immediate policy intervention to ensure its sustainability and transparency.
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A STUDY ON PROBLEMS AND PROSPECTS OF BUSINESS PROCESS OUTSOURCING IN INDIA

A STUDY ON PROBLEMS AND PROSPECTS OF BUSINESS PROCESS OUTSOURCING IN INDIA

190 | P a g e Today in India BPO has huge potentials as India has one of the largest pools of low-cost English speaking people. This makes India one of the obvious choices to outsource. Dell, Sun Microsystems, LG, Ford, GE, Oracle have announced plans to scale up their operations in India. Others like the American Express, IBM and the British Airways are leveraging the cost advantage; India has to offer while setting up call centers. Several foreign airlines and banks have to set up business process operations in India. Many European and US companies are interested to focus their main business and outsource their noncore activities like-Human Resource Department; Accounting Department etc. to India. There is a good opportunity for Indian BPO vendors in this area. BPO vendors need to have good, domain knowledge, process know-how and competence with technological solutions to cater to manage the work. According to McKinsey-NASSCOM report the key advantages of BPO services to India are cost savings, quality improvement, productivity improvement. The major thrust for BPO to India are robust communication facilities, a virtual 12 hour time zone difference from the western markets and huge poor of English speaking and computer literate manpower. This manpower is skilled and quality conscious. The cost of such qualified manpower is 50%-6O% cheaper in comparison to developed countries. Therefore, the Indian BPO firms have the good value proposition of all BPO hubs. India already has a large and rapidly growing number of business process outsourcing service providers collectively covering a wide range of BPO services. Now all kinds of information can he stored by digitalization and cheaper and faster transportation allows the exchange of digitalized information between people anywhere around the globe:
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Challenges and Opportunities of Business Process Outsourcing in India

Challenges and Opportunities of Business Process Outsourcing in India

Thus, BPO decisions may be driven by any one or a combination of these perspectives. Irrespective of the reasons for outsourcing, BPO is growing rapidly. But the industry is not without its problems and challenges, both for clients and for vendors. Clients are concerned about safety, quality, and finding the right outsourcing partners; vendors must deal with high costs, operational problems, and competition. Though some attempts have been made to examine these issues, research on specific vendors' markets, such as India's BPO industry, is still limited. We explored the Indian BPO industry and uncovered some unique challenges and opportunities. III. Data
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Problems and Prospects of Business Process Outsourcing Industry: A Case Study of India

Problems and Prospects of Business Process Outsourcing Industry: A Case Study of India

NASSCOM compiles a list of BPO companies registered with it, which was used for the selection of the sample. We concentrated mainly on the three major service lines viz., customer care, financial and health care BPOs. The survey covered all major locations viz., Bangalore, Mumbai-Pune and Delhi-Gurgaon regions, Hyderabad and Chennai. Thus a typical stratum under consideration is “location × sub- sector/process”. For each stratum we selected a large number of firms and requested them to participate in the survey. The firms that responded positively were later interviewed. In order to get an idea of the problems and prospects of the BPOs operating in the second-tier cities, we have covered firms from Thiruvananthapuram in Kerala and Mangalore in Karnataka, using the list of firms obtained from the respective software technology park India (STPI) offices. We would like to mention here that we faced difficulties in obtaining appointments with the managements of the firms; given their busy schedules, one needs to wait unduly for their appointment. Further, it has been observed that companies are also reluctant to disclose financial information. Not withstanding these difficulties we have covered 70 firms from
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Critical Success Factors in the Offshore Business Process Outsourcing of Debt Collection to India

Critical Success Factors in the Offshore Business Process Outsourcing of Debt Collection to India

An Institutional Theory lens requires assessing the organisational field in which the organisation is a participant, as to what is considered the collective norm for processes or products to be outsourced as well as to whether that outsourcing might take place (Ang et al., 1997). If an organisation was uncertain as to the best candidates for outsourcing, then the most likely manifestation of Institutional Theory is to apply the process of mimetic isomorphism by identifying what it perceives to be the most successful outsourcing organisation within its organisational field and simply imitate it (DiMaggio & Powell, 1983). The dominant conceptualisations of Institutional Theory are of social legitimacy which militates against radical outsourcing innovations within an established organisational field; all market participants tend to outsource in the same way with similar outsourcing providers. This tendency can then guide decision-making processes for an organisation. An exception is where the perceived economic benefit of doing something radically different is great, and the organisation has the financial capacity to resist those pressures which otherwise force them to conform. (Ang et al., 1997). This decision would require an assessment of the economic benefit which is itself dependent upon a TCE view of internal versus external sourcing (incorporating transaction costs).
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Problems and Prospects of Business Process Outsourcing Industry: A Case Study of India

Problems and Prospects of Business Process Outsourcing Industry: A Case Study of India

While on-shore and near-shore BPOs existed long time since, off-shore activities are gaining momentum only in recent years. I ndia has a number of positives to operate successfully as an off shore location. I ndia being one of the world’s most populous countries, obviously has a large pool of human resources. Government’s continued investment in higher education since independence in terms of establishment of educational institutions as well as subsidization of education have produced a pool of knowledge-workers capable of performing skilled and specialized tasks. Already having a strong I T sector helped further to develop I ndia’s I T-enabled services sector. I n addition, due to the rupee dollar exchange rate, I ndian labour turned out to be considerably less expensive for the US business enterprises. Traditionally, knowledge of English language is also high amongst the I ndian population, compared to the other Asian countries. Given I ndia’s value proposition, multinational organizations came up to establish captive units in I ndia or outsource processes to third party service providers.
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Problems and Prospects of Business Process Outsourcing Industry: A Case Study of India

Problems and Prospects of Business Process Outsourcing Industry: A Case Study of India

The above analysis shows that both in terms of manpower as well as salaries of employees, China is a potential competitor to India. Currently, China’s major weakness is the lack of English language skills, which, China is aggressively seeking to overcome by providing special language training to its youth. Our field survey, on the other hand, reveals that though we have graduates supposedly with good English knowledge and other related skills, in practice it is rather difficult to find quality manpower, resulting in high training costs for BPO firms. To reduce such costs, poaching takes place, which is considered to be a major threat to the industry. Competiton amongst the firms also pushes the salaries upward making India a less cost effective country vis-à-vis China and Mexico. Given this background , two distinct policy measures can aid the industry. The first is to create an education curriculum suitable for this industry, incorporating e.g. training in communication skills, cultural background, and financial and legal regulations of western target countries. The second is to develop two tier cities where attrition and poaching problems are much less prevalent. Transportation is a major constituent of the employee-related costs of Indian BPOs located in the metros, whereas this cost component is almost negligible in the 2- and 3-tier cities (survey findings). Further, comparison of expected salary in two-tier cities vs metros shows that while average per annum salary of an agent-level employee is Rs90, 000 in Bangalore, in two-tier cities like Mangalore this cost reduces to Rs 70,000 (survey findings). Thus, if one establishes a set-up of 1000 employees there can be cost savings of Rs 2 crores per year.
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An Analysis Of Business Process Outsourcing Strategies Of Public And Private Sector Banks In India

An Analysis Of Business Process Outsourcing Strategies Of Public And Private Sector Banks In India

The justification for outsourcing activities, such as cash management, research and business analytics, and other processes that otherwise are considered core to the banking business, lies in the argument that these activities, though essential to the bank, do not provide a unique competitive advantage. This implies that those activities, where a bank can do better than its competitors, and which generates a competitive advantage, are retained in house and the rest are outsourced (Chris, et al. 2004). The outsourcing strategy has shifted from product (and/or service) focus to that of differentiation and speed-to-market. Several studies pertaining to outsourcing in the financial services sector show a gradually growing trend in outsourcing, both in terms of nature and scope of activities outsourced, and also emphasize that outsourcing is a critical aspect of financial institutions to survive in today‟s business environment (Federal Bank of New York, 1999).
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Business Process Outsourcing (BPO)

Business Process Outsourcing (BPO)

India is saturated and much of India’s top-tier talent has already been hired by the industry or otherwise been taken up. In addition, India and other competing countries recently passed restrictive legislation and rules. Also, it is not a good business strategy to invest solely in one country. Therefore many global companies that have a large presence in India, such as IBM, are expanding and looking for alternative countries. 49 The Philippines, on the other hand, has very favorable prospects. The Philippine industry needs to get together with credible organizations such as BPAP, CICT, PEZA, and the JFC to start a more active information campaign.
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Business Process Outsourcing and Market Value of Firms

Business Process Outsourcing and Market Value of Firms

However, our findings that outsourcing knowledge intensive processes to offshore locations could be value destroying for the firm indicates that risks are indeed a factor when investors evaluate outsourcing initiatives. Many countries such as India and China are in the process of formulating intellectual property protection rights that are in line with the norms here in the US. Even so, significant differences exist in the IP laws across nations which have been a source of concern for many outsourcing firms. Nevertheless, this risk could reduce with time and it would be useful to reassess the risks associated with offshore outsourcing knowledge intensive processes periodically. The results indicate that in addition to risks, investors are factoring in the fact that the high coordination costs associated with managing knowledge intensive processes offshore could reduce the potential gains from capability leverage.
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Business Process Outsourcing:  An Exploratory Study

Business Process Outsourcing: An Exploratory Study

Figure 3 shows that imports of computer and data processing services from India to the US exploded from $8 million in 1997 to a peak of $133 million in 2000, followed by a decline to $76 million in 2002. Overall, this represents an increase of 850 percent! The GAO report also considers the impact of offshoring on the US workforce, examining a range of occupational data collected by the Bureau of Labor Statistics. The study finds that layoffs attributable to overseas relocation have increased but comprise only a small fraction of total overall layoffs. According to the Mass Layoff Survey (MLS), 13,000 or 0.9% of 1.5 million layoffs during the period of 1996 to 2003 resulted from overseas relocation. Ninety-six percent of layoffs during this period occurred in the manufacturing sector. The study notes that the MLS is a poor indicator of the impact of offshoring on the U.S. workforce for two primary reasons. First, the scope of the MLS only includes a portion of layoffs, excluding establishments with fewer than 50 employees. Second, while “overseas relocation” is a reason surveyor may select when querying employers, many employers are reluctant to provide the reasons behind layoffs. In response to this latter problem, the MLS in 2004 began specifically asking detailed questions concerning whether or not layoffs resulted from overseas relocation. Two other important
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Business Process Outsourcing A shipping industry perspective

Business Process Outsourcing A shipping industry perspective

Consider a forwarding company located in the USA having its off-shore centre (back-office) in India. The back-office answers queries, gives customer support and does all the documentation – be it accepting bookings, interacting with transport providers and ocean carriers, invoicing etc. The back-office is able to serve the company’s customers on a 24x7 basis at a fraction of the cost. In a country like USA where telesales is quite effective, the off-shore centre is able to undertake the sales function. At a more advanced level, the back-office can utilize the data base of the parent company and work out logistic solutions for its customers’ problems. For a country like USA with its high cost of operation and where all necessary information is available in computerized form on the ‘Web’, the back-office centre can effectively find logistic solutions with out sacrificing quality. In fact the quality is far better because the back-office can have the best logistic professionals combined with all necessary data and information as well as technological tools. These professionals are able to work out solutions day and night 365 days in a year. In a back-office like this, one can see that almost all the functions of the parent company – including the core function of working out logistics solution – are carried out. The off-shore centre is nothing but a mirror image of its principal office.
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Business Process Outsourcing in the Philippines

Business Process Outsourcing in the Philippines

The outsourcing and offshoring industry experienced rapid growth after 2000 led by call centres. There were four call centres in 2000, with 2,400 employees and USD 24 million in revenues. By 2005, 108 call centres operated in the country, with 112,000 employees and USD 1.8 billion in revenues, which represented 75% of total BPO revenues. The cumulative amount of investment projects registered under the Board of Investment (BOI) and PEZA between 2000 and the first half of 2006 was about P43.2 billion (USD 0.86 billion) - call centres accounted for 52% of this amount. In the initial phase of industry development, all revenues came from exports, but while clients of call centres were primarily based in the UK and the US, BPO firms in the other subsectors served other developed countries and some Asian countries. The existing market of the animation subsector included not only the US, but also countries such as Australia, Canada, and France; and Asian countries such as China, Republic of Korea, Malaysia, and Thailand. Clients of software development companies included firms from India and Singapore. 33 The success of the BPO
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Business process outsourcing in Bulgaria

Business process outsourcing in Bulgaria

75% of clients are in the Fortune 500 space “Bulgaria is the top performing geography of Sutherland with 100% referencable clients and best talent when it comes to technical capabilities. Smaller Delivery team compared to our own delivery locations like Philippines, US or India but services provided are with higher complexity with a stress on language, skill and medium.”

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