Business Process Outsourcing

12/11/2014 Career


Business
Process Outsourcing (BPO) means getting the odd job done
at the cheapest rates by the best in the class. This
helps in maximising opportunities, reducing costs and
minimising risks. The philosophy behind BPO is very
specific an organisation should concentrate on doing
what they specialise in and outsource rest of the work
processes. Harvard Business review has identified
outsourcing as one of the most important management
ideas of the past 75 years.



BPO saves
precious management time and resources and allows focus
while building upon core competencies. Further, it leads
to more profits, increased share holder value, greater
efficiency and better services. Therefore, more and more
companies are moving their non-core business processes
to outsource provider. The list of functions, therefore,
has been increasing day by day. Apart from call centers,
functions outsources include purchasing and
disbursement, order entry, billing and collection, human
resources administration, cash and investment
management, internet audit, pay-roll, tax compliance and
so on.



India
has become the obvious choice of companies world over
because the country has one of the largest pool of
low-cost English speaking scientific and technical
talent. Many MNCs like Sun Microsystems, LG, Ford, GE,
Oracle etc have announced plans to scale up their
operations in India. There are others like American
Express, IBM and British Airways which are taking
advantage of low costs in India while setting up call
centres. According to one estimate, about 82 percent of
the US companies rank India as their first choice for
software outsource business processes from India. As a
result, India revenues from BPO are estimated to have
grown by 107 percent to $583 million and this particular
area employes 35,000 people in the last few years.




Mr.Derek Williams, executive V-C, Oracle, in-charge of
the Asia-Pacific region, says, "India will be a world
leader in both business process outsourcing (BPO) and
call centres." Expectations from this segment are so
high that spending by US organisations on outsourcing
business services increased from $100 billion to $318
billion in 2001 and since then it has grown with an
impressive rate. As a result, all the companies worth a
name in the Indian market is into BPO. Infosys
Technologies, Wipro, Satyam and Spectramind Services,
all have picked a significant stake in the Indian as
well as the world market



In
spite of the mammoth potential of BPO in India, its
long-term future is not certain. Because the
infrastructural changes required to compete in the
market is not there. Educational policies need to be
changed. For example, Finance and accounting is a key
thrust area, but there is not a single University or
polytechnic which teaches new development in the
subject. The government needs to participate and see if
the curriculum needs to be changed, start polytechnics
to impart skills that are required to service global
companies. Laments Mr.Raman Roy, President and CEO,
Spectramind Service, "There is no game plan. The growth
of $17 billion and one million jobs will not come from
just making reports and projections. There has to be
infrastructural changes to complete in the market
place".




Recently NASSCOM has proposed all-India level competence
test for recruitment in BPO and ITES sectors. If all
goes will this will be implemented by the end of the
year.



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