jibjit bpo project

8/12/2019 Jibjit Bpo Project

http://slidepdf.com/reader/full/jibjit-bpo-project 1/44

(Submitted for the Degree of B.Com Honours in Accounting &Finance under the University of Calcutta

!itle of the "ro#ect

“Business Processing Outsource (BPO)”

Submitted by

$ive% Saha

oll no. 'egistration o.'

Su)ervised By

February* +,-

1



This project is based on “BPO INDUSTR IN INDI!”" Business ProcessOutsourcing is the de#egation o$ one or %ore o$ the business processes to ane&terna# pro'ider hich in turn o ns %anages and contro#s the se#ectedprocesses based on so%e speci$ic standards" It as started in India in ear#*

+,-./s b* the British !ir a*s ho set0up their capti'e unit in De#hi"

2

This is %* proud pri'i#ege to e&press %* deepest sense o$ gratitude andineptness to %* Super'isor Pro$essor Basudeb Sahu1han Depart%ent o$co%%erce !char*a 2irish 3handra 3o##ege 4o#1ata05....6"

7ords perhaps ou#d $ai# to e&press the gratitude I o e to hi%" It ou#d ha'e

been i%possib#e $or %e to co%p#ete the project or1 ithout his constant andinspiring guidance and 'a#uab#e suggestion at e'er* stage o$ the project"

I a% a#so indebted to a## other teachers o$ the sa%e depart%ent $or theirconstant support inspiration and suggestions"

I e&press %* gratitude to %* parents $riends $or their he#p and inspiration toco%p#ete the project"



BPO in India starts ith #o 0end data entr* processes but no it %o'e up the'a#ue chain and dea#s in core business processes a#so" Both 'oice and non0'oiceBPO Industr* e&ists in India" 8arious t*pes o$ ser'ices are per$or%ed ca##centers being the attraction toda* $or the *outh"

BPO operates through three t*pes o$ business %ode#s 'i9" 0 Transactiona# Nicheand 3o%prehensi'e" :inance and !ccounting has a#so set its signi$icant p#ace inBPO pie"

In ;..- BPO industr* generates USD +;"- Bn re'enue out o$ hich e&portsre'enue as USD +.",Bn" It i## achie'e USD +<"- Bn b* the end o$ ;..,(e&pected) and is e&pected to achie'e USD =.Bn b* ;.+; and USD ;;> Bn b* theend o$ ;.;."

3ost co%petiti'eness and ta#ented poo# o$ hu%an resources are the 1e* dri'ers inthe gro th o$ BPO industr* but sti## so%e $actors such as underde'e#opedin$rastructure and co%petition $ro% others #o 0cost countries are pro'idingcha##enge to the Indian industr* hich needs to be addressed care$u##* b* thecooperation o$ go'ern%ent N!SS3O? and industr* it se#$"

Sti## India is shining in the BPO #andscape and is the %ost attracti'e destination"

Sr.No. TITLE Pg. No.

+" Introduction " De$inition " Objecti'es

(50-)5-

;" @'o#ution (,0+.)

6" Si9ing O$ BPO In India (++0+=)

3



<" Seg%ents In BPO " 8oice A Non08oice " ori9onta# A 8ertica#

(+=0;;)+-0;+;+0;;

>" Steps :o##o ed 7hi#e Outsourcing" (;;0;6)

=" Regu#ator* :ra%e or1 O$ Indian BPO"

" Data Protection Ca " " Sarbanes O&#e* !ct"

(;<0;>)

;<;>

5" BPO A :inance" (;>0;-)

-" Trends In BPO Industr*" " Dri'ers o$ BPO 2ro th" " Issue A 3ha##enges"

(;,06+)6.06+6+

," 3o%petiti'e Candscape O$ Indian BPO" (6;06=)

+." 3ritica# !na#*sis O$ BPO" " Bene$its o$ BPO" " Ci%itations o$ BPO" " S7OT !na#*sis"

(6=06,)6=065656-06,

++" 3onc#usion (6,0<.)

Bib#iograph* <+

!nne&ure0+ <;

!nne&ure0; <6

4



Sr.No FIGURES

Pg. No.

1. De$inition O$ BPO" 5"

2. istor* O$ BPO In India" ,"3. 8a#ue O$ 3hain O$ BPO In India" +."4. 2ro th O$ BPO In Ter%s O$ @&ports" ++"5. 2ro th In Do%estic BPO Re'enue" +;"6. Tota# BPO 2ro th in Ter%s O$ Re'enue" +6"7. BPO A @%p#o*%ent" +<"8. Si9e O$ BPO 2#oba# ?ar1et" +>"9. 2#oba# BPO ?ar1et Share" +="10. 3#assi$ication O$ 8oice A Non08oice BPO" +5"11. ori9onta# A 8ertica# BPO" ;+"

12. 8ertica# Seg%ents In BPO" ;;"

13. Steps To Be :o##o ed 7hi#e Outsourcing" ;6"14. :inancia# BPO Process Being Outsourced" ;="

15. Top +. BPO 3o%panies" 6;"

16. S7OT !na#*sis" 6="

5



Sr.No.

TABLES

Pg. No.0.

+" BPO 2ro th In @&port" ++"

;" BPO 2ro th In Do%estic ?ar1et" +;"

6" O'era## (@&port A Do%estic) 2ro th" +6"

<" @%p#o*%ent 2enerated B* BPO" +<"

>" 2#oba# BPO ?ar1et" +>"

=" ?ajor P#a*ers In BPO :inance +-"

6



1. INTRODUCTION TO BPO

DEFINITION OF BPOOUTSOUR3IN2 0!n organi9ation entering into contract ith another organi9ation to operate and%anage one or %ore o$ its business processes

7



BUSIN@SS PRO3@SS OUTSOUR3IN2 0 It is the de#egation o$ one or %ore o$ IT intensi'e business processes to ane&terna# pro'ider hich in turn o ns %anages and ad%inisters the se#ectedprocesses based on de$ined and %easurab#e per$or%ance criteria"

BPO as per the or1 per$or%ed can be c#assi$ied as 8OI3@ B!S@D hichinc#udes custo%er re#ated ser'ices such as technica# support %ar1eting etc" andNON08OI3@ hich inc#udes interna# business operations" !nd as per the#ocation in'o#'ed it can be c#assi$ied as

ON-SHORE: BPO that is contracted inside a co%pan*/s countr*"

NEAR-SHORE: BPO that is contracted to a co%pan*/s neighboring countr*"

OFF-SHORE: BPO that is contracted outside a co%pan*/s countr*"

OBJECTIVES OF BPO:

Traditiona##* the %ain objecti'e o$ co%panies outsourcing their businessprocesses to India as the ant o$ #o cost" But no 0a0da*s co%panies thato$$shore their business processes to India are no #onger #oo1ing at cost reduction

a#one" The* t*pica##* ant to achie'e+ ) P ro ce ss i %p ro 'e %e nt a nd e $$ ic ie nc * 0 $ as te r t ur na ro un d a nd g re at erproducti ' i t*

; ) 3 o s t s a ' i n g s "

6 ) I % p r o ' e d E u a # i t * 0 # e s s e r r o r s F r e o r 1

<) Bui#dingFstrengthening presence in a ne %ar1etF$oreign countr*

>) I nc re as ed $ oc us o n c or e c o%pe te nc ie s 0 e "g " d e' e# op i ng n e p ro du ct s o rser ' ices

= ) B u i # d i n g b u s i n e s s ' a # u e a n d s t r a t e g i c d i $ $ e r e n t i a t i o n "

2. EVOLUTION OF BPO IN INDIA.

Outsourcing as a concept is probab#* one the o#dest and %ost co%%on#*practiced" !s a concept and practice it per'ades a## aspects o$ our #i'es0 do%estic

as e## as pro$essiona#" The idea o$ outsourcing has its roots in the Gco%petiti'ead'antageG theor* propagated b* !da% S%ith in his boo1s G T @ 7@!CT O:

8



N!TIONS G hich as pub#ished in the *ear +55=" O'er the *ears the %eaningo$ the ter% outsourcing has undergone a sea0change"

Evol !"o# o$ BPO "# I#%"& '&# $ r!()r *) )+,l&"# #%)r ! o()&% :-

1. HISTORY OF BPO IN INDIA.

2. VALUE CHAIN OF BPO IN INDIA.

1. HISTOR/ OF BPO IN INDIA: In India BPO started ith Britishair a*s setting their bac10o$$ice operations in De#hi in ear#* +,-.Gs" Starting ithcapti'e units India BPO %o'es to the third pHart* BPOGs" therea$ter the entr* o$ IT0%ajors brightens the Indian BPO industr* in g#oba# BPO #andscape"

:o##o ing diagra% depicts brie$#* the histor* o$ BPO in India

2. VALUE CHAIN OF BPO IN INDIA:

9



8a#ue chain is a chain describing the 'a#ue o$ business processes being outsourced toIndia" 8a#ue can be e&p#ained as the i%portance o$ business processes to the $ir%outsourcing its business operations" India is %o'ing up in the 'a#ue0chain" !t thebeginning on#* #o end data entr* processes ere outsourced to India" 7ith thepassage o$ ti%e trend goes on changing" :ro% #o 'a#ue data entr* processes chain%o'es up to core processes being outsourced no 0a0da*s" It started ith

?ID0+,,./s0 D!T! @NTR PRO3@SS@S Data entr* si%p#* inc#udes entr* o$ data$ro% papers boo1s or an* hard cop* $or%at to co%puter aided so$t cop*"

D!T! 3ON8@RSION PRO3@SS@S 3on'ersion o$ data across 'arious databases ondi$$erent p#at$or%s"

C!T@ +,,./s0 3!CC 3@NTR@ S@R8I3@S3a## centers are out#ets that e&ist %ain#* to ans er inbound or p#ace outbound

te#ephone ca##s and can e&ist $or the purpose o$ sa#es %ar1eting te#e%ar1etingcusto%er ser'ice technica#Fnon technica# support or an* other speci$ic businessacti'it*"

;...0 TR!NS3RIPTION PRO3@SS@S Transcription process i%p#ies transcribingthe audio or 'isua# in$or%ation into e#ectronic docu%ent $or%"

Up ti## ;... on#* non0core acti'ities ere outsourced" Then the trend changed andtoda* the core acti'ities a#so occup* a signi$icant proportion in tota# Indian BPO pie"

10

DATA

ENTRY

DATA

CONVERSI

ON

CALL-

CENTRE

TRANSCRIPTI

ON-

PROCESS-

NON CORE

TRANSCRIPTION-

PROCESS-

CORE

F"g : VALUE CHAIN OF BPO IN INDIA

TODAY2000MID LATE



The abo'e $igure c#ear#* sho s that e&ports in the BPO %ar1et are increasingat the $#uctuating rate" In ;..6 it as USD ;"= bi##ion" Then it increased to USD

11

F"g. GRO3TH OF BPO IN TER4S OF E5PORT



6"+ bi##ion in ;..<"!nd in the $inancia# *ear ;..- it as USD +.", bi##ion" It ise&pected to reach at USD +;"- bi##ion b* the end o$ ;..," :igure indicates that itgro s a#%ost at the rate o$ >. $ro% ;..6 to ;..=" !$ter that it gro s a#%ost atthe rate o$ ;. 06. "

The abo'e $igure sho s the trend o$ gro th in do%estic re'enues o$ Indian BPOindustr*" It sho s that onshore co%ponent is #ess than o$$shore co%ponent" In ;..6

12



re'enue o$ BPO $ro% do%estic industr* as USD ."; Bi##ion" It increased to USD ."6Bi##ion in ;..<" Then in ;..- it as USD+"=Bi##ion and is e&pected to reach USD +",Bi##ion at the end o$ ;..," It is gro ing at a s#o pace than e&port co%ponent o$ BPO%ar1et"

FIG 6: TOTAL BPO GRO3TH IN TER4S OF REVENUE

A (o # *7 !() $"g r) ov)r&ll BPO gro !)&%"l7 &! !() r&!) o$ &l8o ! 29 "#200; !o!&l BPO "#% !r7 & USD 12.; B"ll"o# ("l) "! " )+,)'!)% !o r)&'(USD B"ll"o# "# 200<.

FUTURE LOO=: !s per the stud* conducted b* N!SS3O? Indian BPOindustr* is gro ing at a 3!2R o$ ;- " I$ it continues ith this pace it i## reachto USD 6.Bi##ion b* ;.+; but it is e&pected that it i## touch USD =. Bi##ionbecause o$ the %an* ad'antages it has o'er the co%petitors"

13

Tab#e 6 0 O8@R!CC @& ort A Do%estic BPO 2ro th



7hi#e the other stud* o$ N!SS3O? predicts the Indian BPO %ar1et i## reachUSD ;;> Bi##on b* ;.;."So it can be represented as;.+;JUSD =.Bi##ion @";.;.J USD +5> Bi##ion (@&ports) KUSD >. Bi##ion (do%estic) "So ;.;.J USD ;;> Bi##ion"@J @&pected"

D. IN TER4S OF E4PLO/4ENT GENERATED

TABLE . E4PLO/4ENT GENEREATED B/ BPO

FIGURE >. BPO AND E4PLO/4ENT

So the greatest poo# o$ graduates is %o'ing to ards the BPO industr* thereb*decreasing the une%p#o*%ent and de'e#oping the econo%* b* uti#i9ing thea'ai#ab#e poo# o$ ta#ent"

14



2. GLOBAL BPO 4AR=ET AND INDIA?S SHARE:

2#oba# BPO %ar1et is a#so gro ing at the rapid pace" !s sho n b* the $o##o ingtab#e in ;.+; it as USD >"+ Bi##ion and progressed to USD >6"< Bi##ion in ;.+5"

FIGURE 9- SI@E OF GLOBAL BPO 4AR=ETOut o$ this tota# g#oba# %ar1et India/s share is esti%ated to be >0= current#* assho n b* the $o##o ing diagra%" US ha'e the #argest share o$ >; $o##o ed b*U4 hich co%%ands ;. o$ the BPO pie" 2!RTN@R predicts that India/sshare in the 2#oba# BPO %ar1et i## get doub#e b* ;.+.i"e" it i## reach to +.o$ tota# BPO %ar1et"

15



FIGURE <- GLOBAL BPO 4AR=ET SHARE

. SEG4ENTS IN BPO

BPO in India is organi9ed in %an* seg%ents" Pre'ious#* there as on#* #o end'oice operations ere outsourced to India" In the ear#* da*s o$ BPO in India'oice operations ere the %ajor actors #ea'ing a 'er* s%a## proportion $or non0'oice acti'ities" But as India %o'es up in the 'a#ue chain non0'oice operationsstarting occup* a bigger proportion o$ the BPO pie" @&cept 'oice and non0'oiceBPO in India can a#so be seg%ented into hori9onta# and 'ertica#"

So business process outsourcing can be seg%ented as

+" 8OI3@ !ND NON08OI3@ BPO";" ORILONT!CC !ND 8@RTI3!CC BPO"

16



1. VOICE AND NON-VOICE BPO.

FIGURE 10: CLASSIFICATION OF VOICE AND NON-VOICEBPO

A VOICE BPO FRONT OFFICE OPERATIONS

17

INBOUND S!C@S

OUTBOUND S!C@S

T@C@?!R4@TIN2

3USTO?@R S@R8I3@S

ORD@R PRO3@SSIN2

T@3 NI3!C SUPPORT

!PPOINT?@NT S@TTIN2S

D@BT 3OCC@3TION

@CP D@S4

?!R4@T R@S@!R3 !NDMU!CIT SUR8@ S

!33OUNTIN2

D!T! @NTR

D!T!B!S@ ?!N!2@?@NT

3C!I?S PRO3UR@?@NT

TR!NS3RIPTION

U?!N R@SOUR3@S



Vo"') &'!"v"!") *)"#g o ! o r')% "#'l %):

1. INBOUND SALES:

2. OUTBOUND SALES

. TELE4AR=ETING

. CUSTO4ER SERVICE

;. ORDER PROCESSING

18



6. TECHNICAL SUPPORT

>. APPOINT4ENT SETTING

9. DEBT COLLECTION

<. HELP DES=

10. 4AR=ET RESEARCH AND UALIT/ SURVE/S

B NON-VOICE BPO BAC= OFFICE OPERATIONS

1. ACCOUNTING.

19



2. DATA ENTR/.

Data entr* ser'ices he#ps in getting #arge a%ounts o$ in$or%ation added into databasesor speci$ic app#ications cost e$$ecti'e#*"

. DATABASE 4ANAGE4ENT.

@'er* business has custo%er and contact databases to %anage and 1eep up to date"Database %anage%ent ser'ice a##o s 1eeping database c#ean and up to date through aprogra% o$ contacting our custo%ers to ensure *ou ha'e the #atest in$or%ation"

. CLAI4S PROCESSING.

T*pica##* associated ith the insurance industr* c#ai%s processing actua##* co'ers an*process that starts ith a custo%er enEuir* that reEuires in'estigation ana#*sis

assess%ent decision and $o##o 0up ith a $or%a# response"

;. TRANSCRIPTION.

Transcription is the process o$ con'erting the audio or 'isua# in$or%ation intoe#ectronic docu%ent $or%"

?edica# transcription as one o$ the $irst o$$shore BPO ser'ices to be #aunched $ro%India" This ser'ice in'o#'es the transcribing o$ %edica# records $ro% audio $or%at ordictated b* doctors or other hea#thcare into either a hard cop* or e#ectronic $or%at"

=" U?!N R@SOUR3@

u%an resources are the %anpo er e%p#o*ed b* the $ir%" It is the 'a#uab#e asset o$the co%pan*" ?ore and %ore businesses are outsourcing their hu%an resourcebusiness $unction or parts o$ that $unction to e&perts ho do this ser'ice $u##0ti%e" Thisranges $ro% hiring processes to %anage%ent o$ e%p#o*ee bene$its process to pa*ro##"Businesses that $ind a high Eua#it* ser'ice pro'ider outsource their R acti'ities andcan increase their e%p#o*ee satis$action 'is0 0'is reduce e&penses"

2. HORI@ONTAL AND VERTICAL BPO:

There are t o t*pes o$ BPO opportunities in the %ar1et

+" igh 'o#u%e and #o 'a#ue

;" igh 'a#ue and #o 'o#u%e" igh0'o#u%e and #o 0'a#ue are the hori9onta# BPO/s

hi#e high0'a#ue and #o 0'o#u%e are the 'ertica# BPO/s"

20

8ertica#BPO



F"g r) 11: HORI@ONTAL AND VERTICAL BPO

No l)! %" ' "# %)!&"l:

A HORI@ONTAL BPO

B VERTICAL BPO

21

ori9onta#BPO



F"g.12: VERTICAL SEG4ENTS IN BPO.

;. STEPS TO BE FOLLO3ED 3HILE OUTSOURCING

Outsourcing %eans e are hand#ing our business processes to so%e outsider$ir%" So hen the $ir% is outsourcing its core high0'a#ued business processesit shou#d ta1e di#igent care as an* %ista1e can %ar the $ir%" Not on#* thecore ones e 'en non0core processes contribute a #ot to the $ir% direct#*or indirec t#*" So outsourcing dec is ion shou#d be %ade care$u##*" :orout sourcing to be e$$ect i'e there are certain steps hich need to be $o##o ed

22



6. REGULATOR/ FRA43OR= ON INDIAN BPO

23

Securit* #e'e#

F"g. 1 : STEPS TO BE FOLLO3ED 3HILE OUTSOUCING



A. DATA PROTECTION LA3.

B. SARABANES O5LE/ ACT.

24



>. BPO AND FINANCE.

A. SEG4ENTS IN BPO FINANCE.

1. CO4PANIES IN BAN=ING FINANCIAL SERVICES ANDINSURANCES BFSI .

2. NON-BFSI CO4PANIES.

25

I$ the* outsource $inance it is their core business that the* are outsourcing" In $act$inance has been at the $ore$ront o$ outsourcing 2enera# @#ectric !%erican @&pressand 3iti Ban1 #ed the initiati'e in India" The reason is that their custo%er0$acing $ronto$$ice is in high cost #ocations" But there are $unctions hich i$ de#i'ered at #o costsou#d ha'e a %ajor i%pact on their ba#ance sheets"

:ro% the% the $inance $unction is i%portant as it he#ps the rest o$ the organi9ationruns s%ooth#*" So such a co%pan* i## outsource $unctions #i1es sa#es ordersprocessing accounts pa*ab#e recei'ab#e %anage%ents ba#ance0sheet %anage%ent andcash %anage%ent" :or instance a US based industria# %ajor current#* e'a#uating$inance BPO co%panies in India has ->. e%p#o*ees #oo1ing at $inance at a tota# annua#

cost o$ Q++. %i##ion" 2#oba# air#ines a#so under cost pressures are #oo1ing India tooutsource re'enue accounting and sa#es audit $unctions" These inc#ude British !ir a*s!ustra#ian !ir#ines ?a#a*sian !ir#ines and Matar !ir a*s"



B. FINANCIAL BPO PROCESSES BEING OUTSOURCED:

Three t*pes o$ $inancia# processes are being outsourced to India" These inc#ude

1. CLERICAL LO3 GRADE 3OR=:

?ost o$ the or1 being outsourced to India in $inance and accounting 'ertica# consistso$ c#erica# #o 0grade or1" !#%ost =. to 5. o$ the or1 inc#udes processes #i1etransaction accounting $i&ed assets (depreciation ca#cu#ation etc") account recei'ab#eaccount pa*ab#e tra'e# A #i'ing cash app#ication (goes into %a1ing #edger entries) andaccount reconci#iation"

2. 4IDDLE LEVEL:The %idd#e #e'e# hich constitutes a#%ost ;> to 6> o$ the or1 inc#udes processes#i1e accounting operations genera# #edger conso#idation reporting" It a#so inc#udestas1s such as inco%e ta& returns"

. TOP-END ACTIVITIES:

The top end acti'ities constitute on#* +. o$ the or1 in the $inance and accounting 'ertica#"!t the top end o$ the sca#e are acti'ities #i1e ad%inistration o$ %ortgage0bac1ed securities$inancia# p#anning and ana#*sis reEuiring e&pertise o$ at #east ?B! $inance or a statisticsgraduate" Other or1 in this categor* inc#udes eEuit*Fdebt %ar1et research and ana#*sis"

C. REASONS FOR OUTSOURCING FINANCE AND ACCOUNTING

26

TOP @ND

!3TI8ITI@S

(!ROUND +. )

?IDDC@ @ND!3TI8ITI@S

(!ROUND ;> 066 )

3C@RI3!C CO7 @ND!3TI8ITI@S

(!ROUND => 05> )

+"

;"

6" F"g.1;: F"#&#'"&l BPO ,ro') *)"#g o ! o r')%



There are %an* reasons hich #ure a business to outsource its $inance and accountingoperations" These are

1. E5PECTATION TO REDUCE COST:

Stud* conducted b* De#oitte suggests that the $ir%s achie'e 6, percent cost sa'ings$ro% %o'ing operations to #o 0cost centers"

2. STANDARDI@ING THE FINANCE AND ACCOUNTING PROCESS:3o%panies on their o n do not ha'e the abi#it* to standardi9e $inance A accounting eitherbecause o$ a #ac1 o$ specia#i9ed resources sca#e or si%p#* because this is not their pri%e areao$ $ocus" This is h* it %a1es sense to outsource it" !nd as the bac1 o$$ice beco%es %orestandardi9ed in particu#ar the accounting $unctions e'en bigger cost sa'ings can be seen"

. OUTSOURCING DISASTER RELIEF:Organi9ations ha'e beco%e e&tra cautious a$ter the 7T3 disaster and ant to ha'eprotection against disasters" :inance A accounting acti'ities constitute a %ajor part o$ theacti'ities o$ a## corporate and as such e'en organi9ations not ha'ing $inance and accountingas their core processes ant to sa$eguard their $inance A accounting processes" :or e&a%p#ea$ter the co##apse o$ the 7T3 the T in To ers :und (TT:) ga'e the tas1 o$ hand#ing theaccounting $unctions to outsource Partners Internationa# (OPI) a BPO $ir% specia#i9ing in$inance and accounting" OPI s Banga#ore o$$ice hand#es %ost o$ TT: s accounting or1"Source docu%ents are scanned in Ne or1 and sent to Banga#ore b* re%ote connection theBanga#ore o$$ice hand#es ,> percent o$ docu%ent and transaction processing"

. REAPING THE BENEFITS OF ECONO4IES OF SCALE:Outsourcing $inance and accounting processes to cheaper #ocations here %anpo er andin$rastructure is #ess cost#* gi'es the outsourcing co%panies the ad'antage o$ econo%ies o$sca#e" ?oreo'er or1ing hours can be increased in #ocations such as India b* increasing thenu%ber o$ shi$ts"

;. BENEFITING FRO4 THE TECHNOLOG/ AND E5PERIENCE OFTHE SERVICE PROVIDER:

27

The ser'ice gi'es cutting edge techno#og* and has e&pertise in speci$ic 'ertica#s" ence it isab#e to pro'ide the bene$it o$ e&ce##ent e&pertise and best process in that speci$ic 'ertica#"



28

D.4AJOR PLA/ERS IN INDIA BPO FINANCE:o##o ing is the #ist o$ %ajor p#a*ers in this 'ertica# and the appro&i%ate#* nu%ber

o$ peop#e in the respecti'e organi9ation"

T&*l)>. 4& or ,l&7)r "# BPO $"#&#')

The abo'e tab#e e&p#ains the %ajor BPO p#a*ers ho are dea#ing in outsourcing $inanceinc#uding other business process and the nu%ber o$ peop#e e%p#o*ed b* the% in $inanceoutsourcing"



<. TRENDS IN INDIAN BPO INDUSTR/

Trends i%p#* the 'arious changes hich e are going to see in the near $uture in Indian BPOindustr* hether positi'e or negati'e"

8arious trends inc#ude

1. OUTSOURCING 3ILL STA/ CLOSER TO HO4E.

7ith a'ai#ab#e #abor $ro% #a*o$$s in %an* industries and tightened ris1 pro$i#es o$ co%paniesespecia##* in the $inancia# ser'ices industr* co%panies on t ha'e to go $ar o$$shore to $indta#ent" P#anned initiati'es b* Barrac1 Oba%a and increased go'ern%ent spending onin$rastructure projects cou#d #ead to %ore do%estic outsourcing particu#ar#* $orconstruction rea# estate and techno#og* I!OP predicts"

2. GLOBAL UNCERTAINITIES 3ILL CREATE OUTSOURCING VOLATILIT/:O'era## the $ast0paced gro th in outsourcing i## s#o in ;.., as co%panies #o ertheir spending on in$or%ation techno#og* conso#idate or e&it %ar1ets and $ind s1i##ed #abor#oca##* $ro% #a*o$$s in $inancia# ser'ices and other industries"

. STRATEGIC CO4PANIES 3ILL PROSPER:

The econo%ic %e#tdo n cou#d create opportunities $or strong e##0positionedco%panies" 7hi#e the econo%ic c#i%ate i## not i%%ediate#* i%pro'e co%panies in'o#'ed in

outsourcing that act strategica##* and decisi'e#* $or the #ong0ter% i## be increasing#* 'a#uedand sought said I!OP board %e%ber S'en 2o'aars senior 'ice president 3o##iersInternationa# .

. SHIFT IN FOCUS FRO4 COST ARBITRAGE TO VALUE ADDITION:

Traditiona##* the %ain ai% o$ the co%panies outsourcing to India as the cost sa'ing" Butno as India %o'es up the 'a#ue chain this ai% shi$ts to 'a#ue0addition and e$$icienc* .

;. SOCIAL RESPONSIBILIT/ 3ILL BE OUTSOURCING THE4E:

6. IT 3ILL ALSO CREATE NE3RER OPPORTUNITIES NE3 4AR=ETS AND ALSOTHE NE3 SERVICES.

>. SERVICE PROVIDERS 3ILL SHIFT FRO4 TIER-1 TO TIER-2 AND TIER- CITIESTHEREB/ CREATING RURAL BPO?S.

29

Ne go'ern%ent direction under OB!?! cou#d pro%ote higher e%phasis on socia##*responsib#e business en'iron%ents dri'ing outsources to create so#utions that address the%"I!OP predicts i## inc#ude industr* co%petiti'e e%p#o*ee retention and e#$are progra%s"



A. DRIVERS OF BPO GRO3TH IN INDIA:

A %r"v)r " 8o ! 'o88o#l7 & $&'!or !(&! 'o#!r"* !) !o !() gro !( o$ &,&r!"' l&r * "#) .

T()r) &r) 8&"#l7 "+ "8,or!&#! * "#) %r"v)r !(&! &r) , ("#g )#!)r,r" )!o 'o# "%)r !() BPO o,!"o# "# I#%"&. T() ) &r):

1. ABUNDANT TALENT.

India/s *oung de%ographic pro$i#e is an inherent ad'antage co%p#e%ented b* an acade%icin$rastructure that generates a #arge poo# o$ @ng#ish spea1ing ta#ent" Ta#ent suitabi#it*

concerns are being addressed through a co%bination o$ go'ern%ent acade%ia and industr*#ed initiati'es" It inc#udes e$$orts b* N!SS3O? and other education agencies #i1e U23 and!I3T@ to $aci#itate industr* inputs on curricu#u% and teaching"

2. SUSTAINED COST CO4PETITIVESS:

India has a strong trac1 record o$ de#i'ering a signi$icant cost ad'antage ith c#ient/sregu#ar#* reporting sa'ings o$ ;> 0>. o'er the origina# cost base" the abi#it* to achie'esuch high #e'e#s o$ cost ad'antage b* sourcing to India is dri'en b* the abi#it* to access high#*

s1i##ed ta#ent at #o er age cost". CONTINUED FOCUS ON UALIT/.

De%onstrated process Eua#it* and e&pertise in ser'ice de#i'er* has been a 1e* $actor dri'ingIndia/s #eadership in g#oba# ser'ice de#i'er*" Since the inception o$ industr* in India p#a*ersithin the India has been $ocusing on Eua#it* initiati'es to a#ign the%se#'es ith

internationa# standards"

. 3ORLD CLASS INFOR4ATION SECURIT/ ENVIRON4ENT:

Indian authorities ha'e bui#t a strong $oundation $or an “in$o0source” en'iron%ent in thecountr*" These inc#ude strengthening the regu#ator* $ra%e or1 through proposeda%end%ents to $urther strengthen the IT !ct0;..."

;. RAPID GRO3TH IN =E/ BUSINESS INFRASTRUCTURE.

BPO sector has been a 1e* bene$iciar* ith the cost o$ internationa# connecti'it* dec#iningrapid#* and ser'ice #e'e# i%pro'ing signi$icant#*" The gro th is ta1ing p#ace not on#* ine&isting urban centre but a#so in sate##ite to ns and s%a##er cities"

The enab#ing po#ic* en'iron%ent in India as instru%enta# in cata#*9ing the ear#* phaseo$ gro th in this sector" Po#ic* %a1ers in India ha'e #aid specia# e%phasis on encouraging

30



$oreign participation ith participating $ir%s enjo*ing %ini%u% regu#ator* and po#ic*restrictions a#ong ith a broad range o$ $isca# and procedura# incenti'es"

B. ISSUES AND CHALLENGES IN BPO GRO3TH:

1. INFRASTRUCTURE CHALLENGE:

India/s IT@S0BPO industr* continues to attract signi$icant business $ro% both the US and 7estern@urope" 7hi#e nationa# issues ith in$rastructure e"g" te#eco%%unications s*ste% etc is beingaddressed the #oca# in$rastructure (roads bridges airports urban transportation etc) is beco%ing abott#enec1 to the e&pansion o$ capacit*" 2etting a connection is sti## not a hass#e0$ree job"

2. 4OVING UP THE VALUE CHAIN:

3usto%ers are #oo1ing $or 'endors ho can pro'ide end0to0end so#utions" Indian 'endors areusing se'era# %ethods #i1e tie0ups ith e&isting p#a*ers acEuisitions in'esting in researchand de'e#op%ent and #e'eraging industr* best practices $or e&pansion"

. SHRIN=ING PROFIT 4ARGINS:

To sustain in the high#* co%petiti'e %ar1et the p#a*ers are #oo1ing $or ne er re'enuesources and opportunities to 1eep cash $#o ing in" !gain ith ser'ice #e'e# agree%entsbeco%ing stringent and sa#es c*c#es stretching $ar in internationa# dea#s the BPO ser'icepro'iders need deeper poc1ets and $inancia# %usc#es" igh initia# capita# in'est%ents in theindustr* #ong gestationa# periods co%petition #eading to reduced bi##ing rates appreciationo$ rupee against the US do##ar ha'e #ed to increased %argin pressures and increased industr*

conso#idation"

. HU4AN RESOURCE ISSUES:

!nother %ajor prob#e% is the high attrition and gro th aspirations o$ the or1$orce" Oddhours at job and stress are supposed to be %ajor causes o$ high attrition rate hich increasesrecruit%ent and training costs" The ser'ice pro'iders need to spe## out a co%prehensi'ehu%an resource po#ic* that out#ines a c#ear career progression path $or the e%p#o*ees"

;. OTHERS:

31



No %)!&"l)% %) 'r",!"o# o$ BPO? *& )% o# R)v)# ):

1. GENPACT:

2enpact as born in +,,5 as the India0based business process operations $or 2@ 3apita#" In;..> ith eEuit* in'est%ents $ro% 2enera# !t#antic and Oa1 i## 3apita# Partners it

beca%e an independent co%pan* and as rebranded 2enpact" It is India s No" + BPO $ir%"

2. 3NS GLOBAL

. IB4 DA=SH

33



. ADIT/A BIRLA 4INACS 3ORLD3IDE

34



;. 3IPRO BPO:

No %)!&"l)% %) 'r",!"o# o$ BPO? *& )% o# E8,lo7)) S&!" $&'!"o#:

1. ISEVA.

2. ICICI ONE SOURCE.

35



. EFUNDS INTERNATIONAL.

. AJUBA.

;. 4OTIF.

10. CRITICAL ANAL/SIS OF BUSINESS PROCESSOUTSOURCING

3ritica# ana#*sis %eans an appraisa# based on care$u# ana#*tica# e'a#uation" No $orana#*9ing the BPO industr* e i## stud* its

+ " B e n e $ i t s o $ B P O i n d u s t r * "; " C i % i t a t i o n s o $ B P O i n d u s t r * "6 " S 7 O T ! n a # * s i s "

1. BENEFITS OF OUTSOURCING:36



Outsourcing *our non0core acti'ities i## gi'e *ou %ore ti%e to concentrate on*our core business processes"

O$$ shoring can gi'e *ou access to pro$essiona# e&pert and high0Eua#it* ser'ices"

7ith outsourcing *our organi9ation can e&perience increased e$$icienc* andproducti'it* in non0core business processes"

O$$shore outsourcing can he#p *ou sa'e on ti%e e$$ort %anpo er operatingcosts and training costs a%ongst others"

Outsourcing can %a1e *our organi9ation %ore $#e&ib#e to change"

our organi9ation can sa'e on in'esting in the #atest techno#og* so$t are andin$rastructure as *our outsourcing partner ou#d be in'esting in these"

Outsourcing can gi'e *ou assurance that *our business processes are being

carried out e$$icient#* pro$icient#* and ithin a $ast turnaround ti%e"O$$ shoring can he#p *our organi9ation sa'e on capita# e&penditures"

B* outsourcing *our co%pan* can sa'e on %anage%ent prob#e%s as *ouro$$shore partner i## be %anaging the tea% ho does *our or1"

B* outsourcing *ou can cater to the ne and cha##enging de%ands o$ *ourcusto%ers"

Sharing *our business ris1s is possib#e ith outsourcing"

Outsourcing can gi'e *our business a co%petiti'e ad'antage as *ou i## be ab#eto increase producti'it* in a## the areas o$ *our business"

Outsourcing can he#p *our organi9ation to cut its operationa# costs to %ore thanha#$"

I$ *ou ant *our organi9ation to sta* ahead o$ co%petition concentrate on coreco%petencies and %a1e use o$ the #atest techno#ogies then outsourcing can he#p*our organi9ation achie'e a## this and %ore"

2. LI4ITATIONS OF OUTSOURCING:

!t ti%es it is %ore cost0e$$ecti'e to conduct a particu#ar business process ratherthan outsourcing it"7hi#e outsourcing ser'ices such as pa*ro## processing ser'ices and ta&preparation ser'ices *our outsourcing pro'ider i## be ab#e to see *ourco%pan*/s con$identia# in$or%ation and hence there is a threat to securit* and

con$identia#it* in outsourcing"

37



7hen *ou begin to outsource *our business processes *ou %ight $ind it di$$icu#tto %anage the o$$shore pro'ider hen co%pared to %anaging processes ithin*our organi9ation"O$$ shoring can create potentia# redundancies $or *our organi9ation"In case *our o$$shore ser'ice pro'ider beco%es ban1rupt or goes out o$business *our organi9ation i## ha'e to i%%ediate#* %o'e *our business

processes in0house or $ind another outsourcing pro'ider"The e%p#o*ees in *our organi9ation %ight not #i1e the idea o$ *ou outsourcing*our processes and the* %ight e&press #ac1 o$ interest or #ac1 o$ Eua#it* ator1"our outsourcing pro'ider %ight not be on#* pro'iding ser'ices $or *our

organi9ation" Since *our pro'ider %ight be catering to the needs o$ se'era#co%panies there %ight be not co%p#ete de'otion to *ou and *our co%pan*"B* outsourcing *ou %ight $orget to cater to the needs o$ *our 'a#uab#ecusto%ers as *our $ocus i## be on the business process that is outsourced"

In outsourcing *ou %a* #ose *our contro# o'er the process that is outsourced"Outsourcing though cost0e$$ecti'e %ight ha'e hidden costs such as the #ega#costs incurred hi#e signing a contract bet een co%panies" ou %ight a#so ha'eto spend a #ot o$ ti%e and e$$ort in getting the contract signed"

. S3OT ANAL/SIS OF INDIAN BPO INDUSTR/

FIGURE 1> - S3OT ANAL/SIS OF INDIAN BPO INDUSTR/

38

STR@N2 T

OPPORTUNITI@S

T R@!TS

7@!4N@SS



1. STRENGTHS:

igh#* s1i##ed @ng#ish0spea1ing or1$orce"!bundant %anpo er"3heaper or1$orce than their 7estern counterparts" !ccording to Nassco% The agedi$$erence is as high as 5.0-. percent hen co%pared to their 7estern counterparts"

Co er attrition rates than in the 7est"Dedicated or1$orce ai%ing at %a1ing a #ong0ter% career in the $ie#d"Round0the0c#oc1 ad'antage $or 7estern co%panies due to the huge ti%e di$$erence"Co er response ti%e ith e$$icient and e$$ecti'e ser'ice"Operationa# e&ce##ence"3onduci'e business en'iron%ent"

2. 3EA=NESSES:

Recent %onths ha'e seen a rise in the #e'e# o$ attrition rates a%ong BPO or1ers hoare Euitting their jobs to pursue higher studies" O$ #ate or1ers ha'e sho n a tendenc*not to pursue BPO as a $u##0ti%e career"The cost o$ te#eco% and net or1 in$rastructure is %uch higher in India than in the US"?anpo er shortage"Coca# in$rastructure"

. OPPORTUNITIES:

To or1 c#ose#* ith associations #i1e Nassco% to portra* India as the %ost $a'ouredBPOFIT@S destination in the or#d"Indian BPOFIT@S co%panies shou#d or1 c#ose#* ith 7estern go'ern%ents andassuage their concerns and issues"India can be branded as a Eua#it* BPO destination rather than a #o 0cost destination"Q=. bi##ion BPO business b* ;.+."

. THREATS:The anti0outsourcing #egis#ation in the US state o$ Ne erse*" Three %ore states in theUnited States are p#anning #egis#ation against outsourcing" These are0 3onnecticut?issouri and 7isconsin"7or1ers in British Te#eco% ha'e protested against outsourcing o$ or1 to Indian BPOco%panies"Other BPOFIT@S destinations such as 3hina Phi#ippines and South !$rica cou#d ha'ean edge on the cost $actor"S#o do n o$ de%and"

39



11. CONCLUSION

Business Process Outsourcing industr* is gro ing rapid#* since its inception" IndianBPO/s are going through e&citing ti%es" Starting ith capti'e units and #o 0endacti'ities BPO/s are no %o'ing to high0end acti'ities" Indian BPO/s are operating inboth $ront0o$$ice and bac10o$$ice operations"BPO industr* in India is gro ing at therate o$ ;- and is e&pected to reach around USD+<"- Bn in;..," @&ports areaccounting %ajor proportion hich are in journe* to touch USD +;"- Bn b* the end o$;..," These are gro ing at the $#uctuating rate o$ around ;. 06. a *ear" Do%esticBPO %ar1et is a#so in gro th and has accounted USD+"= Bn in ;..-"Inspite o$ thisBPO/s are he#ping in the de'e#op%ent o$ econo%* b* decreasing the e'i#o$ une%p#o*%ent" Since the e'o#ution o$ BPO it is ser'ing the countr* b* pro'iding thee%p#o*%ent to ta#ented and ab#e *outh o$ the countr*" Up ti## ;.., it has generatedaround 56. ... e%p#o*%ents in the countr*" Shi$t in BPO ser'ices has a#so been

e&perienced ith %o'ing $ro% #o 0end to B:SI (Ban1ing :inancia# Ser'ices andInsurance) and i0Tech sector" But the econo%ic do nturn has i%pacted the gro tho$ BPO industr*" Sti## it occupied =. o$ the o$$shore %ar1et" The industr* is e&pectedto achie'e USD =. Bn b* the end o$ ;.+;" !nd USD ;;> Bn b* the end o$ ;.;."8arioustrends ha'e been e&perienced in BPO"

The BPO industr* is dra ing signi$icant attention and India b* 'irtue o$ itsdo%inance in this sector is at the center o$ this attention" The shi$t o$ the Indianecono%* to ards %ore ser'ice orientation suggests that in the #ong ter% India i##continue to be a %ajor p#a*er in the g#oba# BPO industr*"

Despite the gro th that this industr* is itnessing there are certain areas that reEuiregreater attention going $or ard $ro% ser'ice pro'iders to ensure that the industr*re%ains $ir%#* on the gro th path" This sur'e* as conducted ith the objecti'e o$ana#*9ing so%e o$ the 1e* trends that i## dri'e the $uture direction o$ the industr*"7e

a'e endea'ored to high#ight so%e o$ the 1e* ris1s that the industr* $aces and i## $aceas the industr* e'o#'es" 7e ha'e a#so discussed the corresponding ris10%itigants thatser'ice pro'iders and co%panies are $ocusing on to %anage the ris1s" 7e hope thatthis sur'e* pro'ides ser'ice pro'iders ith a deeper understanding o$ the

Industr* the* operate in and acts as an i%portant input to potentia# custo%ersconsidering outsourcing their processes to India"

40



+" "nassco%"co%

;" "bpoindia"co%

6" "eEuaterra"co%

<" "econo%icti%es"co%

>" "coo#a'enues"co%

=" "outsourceindia"co%

5" "tutoria#reports"co%

-" "dataEuest"co%

," "outsourcingpro$essiona#"co%

+." "goog#e"co"in

++" " i1ipedia"co%

+;" "chi##ibree9e"co%

41

http://www.nasscom.com/

http://www.equaterra.com/

http://www.economictimes.com/

http://www.coolavenues.com/

http://www.outsourceindia.com/

http://www.dataquest.com/

http://www.outsourcingprofessional.com/

http://www.google.co.in/

http://www.wikipedia.com/

http://www.chillibreeze.com/

http://www.nasscom.com/

http://www.equaterra.com/

http://www.economictimes.com/

http://www.coolavenues.com/

http://www.outsourceindia.com/

http://www.dataquest.com/

http://www.outsourcingprofessional.com/

http://www.google.co.in/

http://www.wikipedia.com/

http://www.chillibreeze.com/



42



43

!his is to certify that ?r" BI44 S !7 student of B.com (Honours inAccounting & Finance of Acharya /irish Chandra College under the Universityof Calcutta has 0or%ed under my su)ervision and guidance for his )ro#ect 0or%and )re)ared a "ro#ect e)ort 0ith the title “Business Processing Outsource(BPO)"”

!he )ro#ect 0hich he is submitting is his genuine and original 0or% to the best ofmy %no0ledge.

P#ace 1ol%ata Na%e "rof. Basudeb Sahu%han.

Date Designation

S ,)rv" or? C)r!"$"'&!)



S! %)#!? D)'l&r&!"o#

2 hereby declare that the "ro#ect 3or% 0ith the title “Business ProcessingOutsource (BPO)” submitted by me for )artial fulfillment of the degree ofB.Com (Honours in Accountancy & Finance under the University of Calcutta ismy original 0or% and has not been submitted earlier to any other University forthe fulfillment of the re4uirement for any course of study.

2 also declare that no cha)ter of this manuscri)t in 0hole or in )art has beenincor)orated in this re)ort from any earlier 0or% done by others or by me.Ho0ever* e5tracts of any literature 0hich has been used for this re)ort has been

duly ac%no0ledged )roviding details of such literature in the references.

P#ace 1671A!A Bi%%y Sha0

Date ,* 1." Saha Street* 1ol%ata 8 +9

egistration o.' +<+0++;+0..,60+.

oll o.' ++<+0=+0..>=

jibjit bpo project

Documents