BPOs back in demand

NEW DELHI: The global economic slowdown is beginning to spell a windfall for some BPO firms. Companies such as WNS, EXL, Steria and Quatrro are
finding new opportunities as clients aggressively pursue cost-cutting.

“With reality dawning that these are going to be tough times, companies have become more aggressive on outsourcing,” said WNS (Holdings) CEO Neeraj Bhargava.

The BPO firm recently renewed its contract with Centrica that includes a new, three-year transformational plan for streamlining the energy firm’s operations. WNS, which is witnessing traction in utilities, telecom and insurance, is in active discussions for 5-6 deals that it expects to close in the next quarter.

BPO firm ExlService Holdings says the last few weeks have seen clients cut down on their decision-making time to four weeks from 12-18 weeks earlier. “There is a healthy business pipeline and there is a fair number of companies looking to cut costs,” president and CEO Rohit Kapoor said. Apart from insurance vertical, the firm is also seeing demand for finance and accounting work in retail and manufacturing.

Clients are now looking towards their outsourcing vendors to suggest ways to cut costs, Genpact president and CEO Pramod Bhasin had said recently. “There are some project cancellations but there are new opportunities too.”

As per a report by telecom and software consulting firm Ovum, BPO will overshadow the importance of IT in the outsourcing market in 2009. While there is lower level of offshoring in BPO at present, it is more non-discretionary in nature.

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Women are vital part of India's IT workforce'

Bangalore, Nov 19: NASSCOM President Som Mittal on Wednesday, Nov 19 said Women consttuted a vital part of India's IT workforce and the industry will continue to attract more women employees and leaders.

Speaking at the third annual IT Women Leadership Summit here he said the Indian IT-BPO industry was a highly diverse and an inclusive industry. It has set world class HR policies in all areas including recruitments, training, retaining and promoting strategic business plans. NASSCOM announced the winners of Gender Inclusivity Awards at the Summit. The awards, in the second year now, honour companies in the IT-BPO industry which have implemented outstanding practices that promote gender empowerment and women leadership development.

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Recent fraud case has alerted Kolkata's BPO hub to its security troubles

Ever since the recent BPO fraud, wherein, a young woman working at a call centre was arrested for splurging Rs. 200, 000 with credit cards of her company's US clients, the IT hub in the Salt Lake area is going full throttle to ensure tight security control by involving the police.

As Oney Seal, the Miami-based CEO of Databazaar.com, says, "It is high time we all came together to ensure an all-encompassing cyber security. We must follow best practices and certain standard certification and auditing by authorities like ISO or BS7799 (British Standard),"

"Law enforcement agencies need to be trained in potential areas of security fraud so that when an incident occurs, the police should have some idea of the problem," said Seal, whose company, a wholesale distributor, exporter and e-tailer of computer and printer supplies, has its sensitive back-end office in the IT hub.

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BPO vendors see larger US deals by year-end

Clients expected to complete internal evaluation process by then

Mixed fortune

It is a temporary slump in offshoring due to the US credit crunch and the BPOs expect the same factors to fuel increased demand for outsourcing by year-end.

The uncertain environment has indeed forced client companies in the US to ‘reprioritise’ and ‘review’ their roadmap for the future
Adith Charlie

Mumbai, May 4 Is recession good or bad for the business process outsourcing sector? Probably both! Recession in US seems to be a mixed bag for Indian BPO vendors.

They do agree there has been a temporary slump in offshoring due to the US credit crunch, but expect the same recession-related factors to fuel increased demand for outsourcing by the end of the calendar year.

Both IT and BPO companies are witnessing a spate of project delays and cancellations, especially in the financial services space, due to recession in the world’s largest economy. It must be noted that clients can save up to $5 million in costs annually if they enter into a major outsourcing contract. So why are the US companies going slow on their BPO engagements even when they want to cut costs in a recession?

Says Mr Raju Venkatraman, Joint Managing Director and Chief Operating Officer of Mumbai-based Firstsource Solutions, “When a company is hit by a crisis that is at least 100 times bigger than the cost benefits that outsourcing will bring, would it think about saving $5 million a year or find solutions for the bigger problem?” Outsourcing is important, but not a priority in a crisis-like situation, he adds. -
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New Zealand Bank to send jobs to India

The New Zealand-based ANZ National bank will soon be outsourcing its 238 backoffice jobs to India.

A meeting with the staffs at the bank's lending services centre in Auckland and customer transaction service centre in Wellington took place on Tuesday, which according to NZPA report is the beginning of a two-week consultation period over the outsourcing of the work to India.

Meanwhile, Finance workers union Finsec accused the Australian-owned bank of being greedy and a bad corporate citizen. The work will be done in India at a quarter of the cost, the report said.

The bank disputed the union's claim of job losses when the story first broke, saying that the back office workers would be offered the chance to work in bank branches, report said.

"About 403 workers were told that there would be 165 positions in the future, meaning 238 people would either be redeployed or made redundant," said Finsec campaigns director Andrew Campbell.

The plan is still a proposal while consultation continues. The union has no idea how many workers will accept an offer of redeployment.

One group of workers had been told they would be paid redundancy because the bank had acknowledged it would not be able to find them a comparable role.

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Despite US recession, BPO’s future looks bright

THE BUSINESS Process Outsourcing (BPO) vendors having United States based clients share mixed reactions due to the temporary slump in the US economy. This will be further heightened till the time final election results are not out and the new president doesn’t announce some relief with string of measures to combat the credit crunch heat.Those BPOs or KPOs, which focus on large US companies or big ticket outsourcing contracts, are facing the recession crisis as seen by the delays in contract renewals or temporary freeze in awarding of new contracts. One of the associated factors is the lengthened decision-making time with a lot of top heads losing their jobs under the recession pressure.


Large companies have now focussed their energies on restructuring their companies through vertical acquisitions or major divestitures besides analysing their internal processes. This has chiefly been observed with IT and financial service companies. It seems that ’outsourcing’ is now on the back-burner for them, as they focus more on meeting their budgeted business targets first.


But there’s some hope in these tough times. The economic crisis has forced the small to mid-sized US companies to assess outsourcing as an option as they struggle to survive against the big mammoths. They are re-evaluating their internal processes to find solutions within tight business budget constraints. This, in fact, opens up a galore of opportunities for BPOs and KPOs from India, which focus on small to mid-sized US clients with revenues lesser than $5 million.


There are few other smart choices available too, like looking beyond the US to stretch the sights to Europe and Australia or changing the client exposure from the typical IT and financial service clients to other industry verticals.


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BPOs design in-house curricula to train and retain staff

Prominent BPO firms like Essar Group’s Aegis BPO, WNS and Capgemini are designing in-house curricula to suit the sector’s requirements while others like Wipro and HCL Technologies are partnering key universities for certified courses.


The broad idea is to help freshers and high-potential employees develop soft skills not generally taught at universities, and simultaneously increase retention rates in an industry that has attrition rates between 30 and 50 per cent.

The industry, according to Nasscom estimates, accounts for almost $11 billion and employs slightly over 700,000 professionals (in terms of direct employment).

IT, BPO to grow 10-15 pc in next 5 yrs: NASSCOM

CHENNAI: IT and BPO industry is poised to grow 15 to 20 per cent in the next five years and direct employment likely to go up to eight million, a recent survey by NASSCOM has said.

The survey has revealed that prospects of the industry growing in 50 cities in the country were bright if the state governments concentrate on developing infrastructure in these cities.

Releasing the survey, NASSCOM President Som Mittal told a press meet that the industry was focused in seven locations in the country now, employing about two million people.

The present locations - Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, National Capital Region of Delhi and Pune - might not be able to cope with the pressure developed due to setting up of new units there.

The survey said that the development of these 50 locations, including the seven, would depend on knowledge pool availability, infrastructure and social environment, government support and business environment.
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The BPO boom

Chennai emerges as a destination of choice for several companies developing BPO activities.

BUSINESS Process Outsourcing (BPO) is the new buzzword in Information Technology (IT) circles. Typically, it involves the farming out of day-to-day operations of companies in the advanced countries to entities in developing countries to take advantage of lower wages. The development of IT facilities makes this possible. While BPOs could be in the form of call centres, medical and legal transcription facilities, airline ticketing and accounting operations, the basic idea is to lower costs for companies in the advanced countries. IT enables the transmission of data on an almost real-time basis so that data from any location can be processed at any other location in the world. The United States market has been particularly lucrative for Indian BPO companies because of the 12-hour time lag, which enables even day-to-day operations to be carried out seamlessly in India when the U.S. markets close for the night.

A call centre at Tidel Park.

Companies located in Chennai have taken advantage of the interest in the BPO segment. Several companies have established bases in Chennai to cater to the needs of companies operating from overseas markets. Speaking at a seminar on BPO held in Chennai recently, Romi Malhotra, Chief Executive Officer and Managing director, Scope International Private Ltd., a subsidiary of Standard Chartered Bank, said that the city suffered because of "perception-related problems", something which he said was far-removed from reality. He advocated "proactive selling" by the State government in order to enable Chennai to emerge as a destination of choice for BPO activities. Scope employs 3,000 persons at its centre in Chennai; that number is set to increase to 5,000 soon.

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BPO to earn $13B - BPO News

THE business process outsourcing (BPO) industry in the country aims to earn $13 billion in revenues and generate one million jobs by 2010.

If this will be achieved, this would mean a total of $6.7 billion in annual salaries that can be distributed through spending in various sectors of the country’s economy, said lawyer Jamea Garcia, executive director for talent development of the Business Processing Association of the Philippines (BPAP).

Garcia was in Cebu last Tuesday as one of the panelists during the business forum hosted by JobsDB.com at the Cebu City Marriott Hotel.

Cebu, said Garcia, is known as the second biggest home of BPO companies, after Metro Manila. She said that as of BPAP’s last count, BPO companies in Cebu employ a total of 16,400 workers.

Based on data from BPAP, 30 percent of the projected combined annual salaries for 2010 would be spent on food while 10 percent will go to housing-related expenses, and five percent for transportation and communication. BPAP also said 20 percent will go to taxes and the rest would go to other expenditures.

“Achievable”

Garcia said the targeted revenue in the next two years is “achievable,” considering the 50 percent growth in the BPO industry in the last three years. BPAP has laid out a roadmap that will help the industry achieve its goals. The roadmap considers the supply of qualified personnel as the “most important” factor in the BPO industry’s continued growth.

“Talent will drive the growth of the industry,” said Garcia.

Majority of BPO companies in Cebu, and in the country in general, are contact centers while the rest provide non-voice services that include back office management, animation, transcription and software development.

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Satyam BPO ranked second globally

Computer on Monday announced that Satyam BPO, its business process outsourcing arm, has been ranked second among the world’s leading BPO vendors in Brown-Wilson Group’s Black Book of Outsourcing.

Satyam BPO was also ranked fourth on the knowledge process outsourcing vendors list. More than 4,000 organisations were evaluated in compiling the lists.

For the third consecutive year, Satyam has been ranked among the top 10 in Brown-Wilson Group’s Black Book of Outsourcing. In 2007 and 2006, Satyam BPO, formerly Nipuna, had been ranked in several categories including KPO, energy and utilities.

Growth areas win

The Chief Executive Officer of Satyam BPO, Mr Venkatesh Roddam, in a statement said “The categories in which we have been ranked this year (BPO and KPO) are the key growth areas that we have been focusing on. Recognition from the Brown-Wilson Group reflects our capabilities to offer transformation services through superior delivery.”

Source : http://www.thehindubusinessline.com/

Click BPO for a Great Job - BPO NEWS

Ronald George is with HR Operations, 24/7 Customer. He had a fast-track growth in the company in a span of seven years. Now with HR, his mandate is to make the fresh recruits feel at home. He speaks to ET on the opportunities in the sector.

Can you give a brief overview of your career?

I started my career with 24/7 Customer in March 2001 and it has been more than 7 years since I’m with them. I began as an agent in operations and spent 1.3 years in this role and moved on to become a team leader managing 20 agents. After working for 1.6 years as a team leader, I was promoted as manager (operations) handling 7 team leaders.

I worked for 2.5 years as manager and was promoted as assistant program manager managing approximately 500 employees. After spending a year in that position, I moved laterally to the support function as manager, HR Operations. When I joined 24/7 Customer, it was a young company which was growing and I thought this was the best place where I could get immense opportunities to learn and grow.

The BPO industry is hailed as a sector enabling youngsters to have fast-track careers, with higher levels of responsibility being delegated at fairly early stages in their careers. What are the growth prospects available for people looking at a career in this sector?
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Indian BPOs may lose Orange pie

NEW DELHI: Business process outsourcing (BPO) companies like 24/7 Customer , Convergys and EXL Service may be impacted post Orange UK’s announcement of job cuts and reduction in the telecom major’s reliance on India based call centres.

Orange, the mobile services arm of France Telecom, is amongst the largest cellular players in the world. Orange’s new UK CEO Tom Alexander, while announcing a cut of 450 middle management jobs this week, also announced a change of strategy: Reduce its dependence on its Indian call centres, where the company directly employs about 1,500 executives. The company has not clarified as to how many of the 450 job cuts will be from its Indian operation. The immediate impact of the move is that Orange will be halting its call centre expansion in India.

In the next stage, the company will gradually bring ‘back home’ its call centres to the UK, in a bid to sell British customer service as the heart of its new strategy. It’s likely that the employees working on Orange UK’s Indian call centres will be redeployed in other processes over a period of time.
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BPO firms confident of beating US recession

At the concluding session of Nasscom's BPO Strategy Summit in Bangalore recently, 24/7 Customer's co-founder S Nagarajan made an unusual and passionate plea. He asked the large audience to write letters to newspapers whenever they found articles that portrayed the BPO industry in a negative light. "If you have different experiences from that stated in the articles, you should all write to the editors concerned," he said.

The reference was clearly to articles that have highlighted issues like sex and drugs at the workplace, much of that said to be provoked by the young age of those who work in such jobs, and the fact that most BPO jobs involve working through the night. We won't get into the merits of that here. But the reason Nagarajan was provoked to make that statement was this: He believes those articles are exaggerated, and, more importantly, he believes if there is anything that can put the brakes on the industry's growth, it's people's belief that BPOs aren't 'good' places to work in. Parents will discourage their children from entering the profession. In short, the industry won't get the talent it requires.

That's certainly not good for Nagarajan's firm, and especially now when the industry believes it's at the threshold of super-growth. While most admit that the coming year will see a slowdown on account of what looks like an inevitable recession in the US, the country from where most offshoring work comes, the industry's medium term projections are likely to beat that of most businesses. A study conducted this year by Nasscom and research firm Everest estimates "conservatively" that between 2008 and 2012, the industry will see a compounded annual growth rate (CAGR) of 28-30%. But it believes this could go up to as high as 45-50 % if supply constraints are eased.

"Supply is the constraint, not demand," says Pramod Bhasin, CEO of one of India's biggest BPO companies Genpact. India, he says, is already creating the biggest pool of business reengineering talent in the world and is fast consolidating its position as the No. 1 BPO destination. So anybody anywhere looking to outsource their non core areas is likely to look first to Indian BPO companies. In fact, Bhasin would perhaps be unhappy that we continue to use the term BPO to describe his firm. He thinks that given the specialized expertise companies are moving towards, the generic term is no longer meaningful.

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BPOs grapple with inflation

IT-BPO firms, which are already facing a US slowdown and currency fluctuations, are now busy in firming up their plans to tackle a rising inflation in the country and its impact on salary, sales, general and administrative (SG&A) and travel costs, which can dent their profit margins.

According to analysts, the immediate impact of a rising inflation would be on salary. Avinash Vashishta, Tholons Investment Advisory Research, said: "Salaries will now have to be hiked by more than what the companies had decided. Last year, there was almost a 15 per cent rise in salary, while this year it may go up by 8-9 per cent."

Most companies, including India's largest IT services provider Tata Consultancy Services (TCS), Infosys and Satyam , implemented their annual wage hike in the first quarter of the financial year beginning April 1. Others such as Wipro do it during the year. If inflation continues throughout the year the firms would have to effect a mid-term hike or raise the salary by a good measure in the next financial year.

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Business Process Outsourcing 2008: The Year Ahead

The sub-prime mortgage crisis and the weakening of the US Dollar have rendered several rude shocks to the outsourcing industry in 2007. Indian companies were especially hit as the Rupee appreciated by 10.9% in the last 12 months (14.2% in the last 15 months) against the US Dollar. Investors, analysts and the media have been speculating about the impact of margin pressures, risk of business loss in the US, further Rupee appreciation coupled with domestic inflation, etc. This will continue through 2008, as we watch the US slowdown play out – much depends on the extent of the slowdown (will it become a full-blown recession?).

Interestingly, despite worries on the margin front, outsourcing growth expectations stand tall. In our interaction with vendors across the outsourcing spectrum (IT, BPO and KPO), optimism is the prevailing mood, especially as concerns top-line growth. As a result, companies are gearing up to face the year with aggressive plans coupled with some innovative strategies to fight margin pressures. Either way, 2008 promises to provide plenty of action for the outsourcing industry. Our analysts have put together a list of key trends that we believe will make an impact in 2008.

1. Shake-up likely as smaller un-differentiated BPOs will be badly hit
Smaller BPOs with low-end, commoditized services are worst affected by margin pressures, and the worst is far from over. These players will find it difficult to raise prices, and will be unable to pay enough to retain the best talent. Small Indian vendors will be forced to innovate with a focus on "differentiating" their services. In 2008, we believe that this will become critical not just for sustaining competitiveness but also for the very survival of smaller vendors. The vendors that succeed in differentiating their offerings and thereby climb higher up the value chain, will see new growth or exit options open up via better access to funding and M&A activity by larger players. The others, who are unable to get out of the low-price, low-cost game, will start fading away from the competitive landscape.

2. Rigorous cost cutting by vendors inevitable in 2008
The larger companies may hedge forex exposures in the near term, but cannot disregard the threat of lower competitiveness in the long run. Large global vendors and focused, niche providers may be able to raise billing rates, but this will not compensate for the entire exchange loss, and will need a parallel productivity increase to prevent margins from weakening further.

Cost rationalization will be inevitable in 2008 for Indian vendors – whether small or large! The most obvious impact will be on wage hikes and executive perks. Recruitment too is expected to slow down marginally until mid-2008, as vendors push up utilization rates aggressively. But we expect recruitment to pick up again in the latter half of the year as the slack gets wrung out. The impact on attrition rates will also be interesting to see, as large premiums on poaching may no longer be affordable.

Apart from the obvious cost heads, companies will also look to optimize various administrative or marketing costs. Traditionally, the weak Rupee has meant that margins were never threatened for Indian IT and BPO service providers. This has led to considerable slack, in areas like transport costs, procurement, travel, telecom, etc. In the past, management attention was focused only on growth, but now, the quality of growth will matter more.

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Designing Your Organization for BPO and Shared Services

This article provides guidance on organizational design (OD) for organizations that are undertaking or contemplating a shared service or business process outsourcing (BPO) initiative. It comes from the series, "Guidelines for Shared Services and BPO," developed by Alsbridge to reflect a shared understanding of good practice in outsourcing. Related columns will discuss the following areas: developing a business case, change management and SLAs and service levels, charging and benchmarking.

Organizational design is sometimes used to mean simply the design of an organization chart. However, this article uses a broader definition which covers the operating model, the organizational structure (including the organization chart), the roles, competencies and job descriptions.

For shared services and BPO the model has three main areas, as follows:

• The service management organization is the shared services/BPO operation itself, undertaking the various transaction processing or administrative activities. Some shared services/BPO operations will deliver specialist and expert services. This organization may be an internal shared service center, serving one or many internal customers, or external, which is typically the outsourced/BPO option.
• The retained organization is the term used to describe what is left behind when the shared services or outsourced activities are transferred to the new service provider. There are two aspects to the design of the retained function. First there is a need to design an organization that is effective in "receiving" the service delivered by the shared service/BPO provider. This will require an organization where there is clarity of responsibility for inputs and outputs to and from the provider. Second, there is a need to design a retained organization that is effective in performing its role in supporting the business.
• The governance layer term refers to the activities that are necessary to manage a customer/supplier relationship, including the management of service level agreements, performance reporting, billing, and issue resolution.

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Is Mysore becoming the next BPO capital?

Think IT, think South India. Bangalore, Chennai and Hyderabad have seen unprecedented growth in the last decade owing to the growth of the information technology sector. But, could Bangalore be 'Bangalored' by its own neighboring town? Could Vijayawada or Madurai be the next BPO boomtowns?

Mysore is known as much as for Mysore Pak as it is known for Brindavan Gardens and the Chamundi Hills. This sleepy city has been witnessing a quiet IT revolution since 2003.

According to a NASSCOM - A.T Kearney study, Mysore is all set to breakout into the big league on the BPO scene because of availability of talent and the city’s proximity to Bangalore. So, while the big firms like Infosys, Wipro and HCL are setting up big global trading and delivery centers here, it’s the smaller firms that are actually able to dig in their heels into the local talent pool.

HTMT Global Solutions is one of the first BPO companies is to set-up shop in Mysore. Benjamin Franklin, the Deputy GM at HTMT tells that the 250-seater facility is far exceeding his expectations. Set-up just 1.5 years ago, it has seen some of it’s first employees now become team leaders. The response from the city has been so good that HTMT is already looking to expand by over 500-seats.

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New BPO service on the offing

Insurers in Europe and the United States are increasingly considering policy administration business process outsourcing BPO, says a new report by London based independent market analyst . Facing challenging market conditions, both life and non life insurers are seeking to reduce costs and gain flexibility. Often times, however, these goals are stymied by rigid policy administration platforms, which are frequently built in house, Datamonitors report states.

The report concludes that insurers need to reduce costs and become more efficient in order to protect profit margins during this and future soft markets. Further, insurers in the mature markets of North America and Western Europe that are struggling to find new pockets of growth need a flexible policy administration system that enables quicker time-to-market. Policy administration BPO can effectively increase efficiency and flexibility, as well as free resources that can then be expended on value-add functions, according to the research group.

Insurers are increasingly targeting the policy administration function to improve their competitiveness, says Jonathan Steiman, a financial services technology analyst with Datamonitor and the reports author. Business process outsourcing, which is often less capital intensive and less time consuming than other options, is being considered by more and more insurers.

Steiman warns, however, that along with the benefits come some risks. Outsourcing the policy administration function can greatly improve an insurers operation, which is imperative in todays market, but insurers are still wary of losing control of the customer and becoming over-dependant on a single vendor. Many of these risks, Steiman adds, can be mitigated with a comprehensive service-level agreement SLA.

Datamonitor's report notes that both large and small insurers will adopt BPO. Currently, insurers with fewer than 5,000 employees currently have the lowest policy administration BPO adoption rate, however, this is likely to change. According to a Datamonitor survey of 200 global insurers conducted in the first quarter of 2008, small insurers are heavily weighing a BPO strategy, which is evidence of the need to lower costs and concentrate limited resources on value-add functions in today's competitive marketplace.

The survey also found that large insurers those with more than 20,000 employees are increasingly likely to outsource policy administration. Typically, these players engaged in off-shoring via captives, or company owned facilities. The captive route has not been as fruitful as expected, elevating their interest in outsourcing to a third party.

The trends captured by our survey are incredibly interesting, notes Steiman. On the one hand, we see small insurers looking to outsource in order to improve competitiveness. On the other hand, we see large insurers, many of whom already having gone overseas with captives, being drawn to outsourcing because of the maturity and expertise that BPO providers now possess.

Many of today's BPO arrangements can be classified as traditional, or your mess for less, BPO. In other words, insurers look to BPO providers to perform the same functions on the same platforms, but for less money. The savings in traditional BPO are typically driven by moving the process offshore to low-wage countries.

Source : http://www.offshoringtimes.com/

Infosys BPO, i-mint tie up for employee rewards programme

BANGALORE: Infosys BPO, the business process outsourcing subsidiary of Infosys Technologies and i-mint, India's first multi-partner consumer rewards programme, have partnered to launch the i-mint-Infosys employee reward programme for Infosys BPO employees.

The programme would be launched with a Infosys co branded i-mint card.

The program would add considerable value to Infosys' employees, who would for the first time receive i-mint points as rewards and can also earn points across the i-mint network of partners such as Airtel, HPCL, Air India, ICICI Bank, Lifestyle, Makemytrip.com among others.

The employees can redeem their points from the vast i-mint rewards catalogue on www.imintpoints.com.

About the launch Amitabh Chaudhry, CEO and MD, Infosys BPO said, "Infosys BPO is the Employer of Choice where careers are build and this initiative further validates our best people practices making it a Great Place to Work for".
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