BPO - India a perspective

8/7/2019 BPO - India a perspective

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CALL CENTRE

&

BUSINESS PROCESS OUTSOURCING

- India Perspective


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BPOBPO--DefinitionDefinition

BPO is the delegation of one or more IT-intensive businessprocesses to an external provider who, in turn, owns, administratesand manages the selected process(es), based upon defined and

measurable performance metrics

-Gartner


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Do what you do best and leave everything else tobusiness process outsourcers.

PHILOSOPHY..PHILOSOPHY..


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Why OutsourceWhy Outsource


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Customer InteractionServices

Human Resources Solutions Finance and Accounting

Services D

ata entry and processing Industry Administration

Services Payment Services Supply chain Services Knowledge Services

OCR Services On line Data capture

Document conversion Remittance and payment

processing E- Services

Segmentation ofSegmentation of BPOBPO


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Size of industry in 2001 was US$ 881 million.

Growth in 2000-01 was 70%

Expected CAGR of 47%

Expected size by 2008 US$17 billion

Global outsourcing spending is projected to top $1.2 trillion by the

end of 2003.

Globally, outsourcing spending is increasing by 11percent per year.

World Wide BPO Market SizeWorld Wide BPO Market Size

0

50,000

100,000

150,000

200,000

250,000

Mn $

2000 2001 2002 2003 2004 2005

BPO


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Savings can be SignificantSavings can be Significant

Main activitiesCurrentemployees

10,500

3,173

1,000

1,400

730

2,050

400

400

Call center, mortgage and insurance,accounting, bill payment

Data conversion

Software and engineering developmentservices, call center

Back office tasks (frequent flyer, revenueaccounting, errors in reservation systems)

Data processing, accounts, check clearing

Trade finance, check processing, data

entry, customer services, loans, bills,credit cards, cash management

Engineering and design

Insurance claim processing, call center

340

108

46

43

18

73

19

14

55

35

61

1817

41

2001

Forecasted savings

(public statements)


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Indian perspectiveIndian perspective

In India , ITES-BPO segment registered a growth of

59% to reach Rs. 113bn (US $2.3 billion)

According to current industry estimates, India

commands more than 90% of all offshore outsourcing

in IT services

ITeS contributed 25% to the total IT Software and

Service exports from India during FY04


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BPOBPO India PerspectiveIndia Perspective

The BPO (Business Process Outsourcing) and ITES (Information

Technology Enabled Services) is viewed as the Sunshine

Industry of India

Current worldwide revenues estimated at $ 190 B

India today commands $ 2.1bn of these revenues with a 70%growth rate in 2002

Indias share is expected to grow to $24 B by 2008

Success has been demonstrated by blue-chip multi-nationals:

GE (over 12,000 seats in India)

Citibank, AMEX, McKinsey, Dell, Microsoft, etc.

British Airways,


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Advantage IndiaAdvantage India

Excellent communication skills

Second largestEnglish speaking country in the world 170 million peopleLargest base ofEnglish speaking graduates in the world 24 million

graduates

Strong Domain & Technical education base

Over 8,000 colleges and universities

Over 1 million graduates every year Cheaper workforce than their Western counterparts.

Proven capability in Software/IT

Dedicated workforce aiming at making a long-term career in the field.

Round-the-clock advantage for Western companies due to the huge time

difference.

Improved Productivity ClientCulture fit in

Geo-political stability

BPO/ITES business given preferred status by government

No disruption of business

Strong body NASS

COM

working with the business.


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2%9%

20%

13%

22%

34%

Customer care

Finance

HR

Payment service

Administration

Content development

Indian BPO Market Pie (2003-2004)


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Challenges

Rise in level of attrition rates

The cost of telecom and network infrastructure is

much higher in India than in the US.

Anti-outsourcing legislation

Other ITES destinations such as China, Philippines

and South Africa could have an edge on the cost

factor


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BPO Market place Entry Scenarios

Options

Description Best when . . .

Establish contractwith provider tohandle volume

Mature outsourcing market

Non critical processes (e.g.,address change vs. customerservice)

Need overflow capacity given peakdemand

Identify existingprovider or companywith complementaryneeds to partner with

Immature outsourcing market

Want to retain control but do nothave skills

Parent has ambitions to build abusiness to service others

Third-partycontract

Jointventure

Subsidiary

Acquire existingcompany or startnew operation intarget location

Immature outsourcing market

Parent has necessary skills

Parent needs control due to criticalnature of processes


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Business Case

Top Line Rs. 135000000

Capex Rs. 56804417

Opex Rs. 60331147

Return @ 31% Rs. 17864436


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Botto Line

They came for Costbut will stay for Quality

BPO - India a perspective

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