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Busniess Environment for Business Process Outsourcing
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  • 1. CONTENTS: Introduction Nature What is Outsourcing & BPO? Outsourcing Objectives Why Companies Outsource its Business Process?? Advantages Challenges Faced by BPO Industries Business Environment & BPO Industries Conclusion 2
  • 2.  Business Environment consists of all those factors that have an impact on Business  The Preference of any company which wants to outsource its Business Process can be contributed to three basic factors  Cost  People  Environment 3 Cost People Environment
  • 3.  BPO stands for “Business Process Outsourcing", which is simply another term for Outsourcing  Outsourcing is contracting with another company or person to do a particular function  Environment is surrounding situation of Business
  • 4.  Environment is Dynamic  It is inseparable part of Business  Environment create Opportunities and Threats for Business  Environment, Planning and Business Management are related 5
  • 5. WHAT IS OUTSOURCING & BPO ??  Outsourcing can be when a company directly hires an independent contractor or provide service. Or a company may hire an outsourcing company that either employs or contracts with workers to provide the services  Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business functions (or processes) to a third-party service 6
  • 6.  It is basically the process by which a company can delegate certain functions of their business to a specialized organization who can get it done more cheaply, quickly, and efficiently  The process of outsourcing generally includes four stages: 1) Strategic thinking 2) Evaluation and selection 3) Contract development 4) Outsourcing management or governance 7
  • 7. 0% 20% 40% 60% 80% 100% De-risk the business Achieve High Productivity Improved operational Quality Reduced Costs Focus on Core Activity 12% 29% 35% 85% 91% OUTSOURCING OBJECTIVE
  • 8. WHY COMPANIES OUTSOURCE ITS BUSINESS PROCESS?? 9
  • 9. ADVANTAGES  Cater to changing customer demands - Many BPOs provide the management with flexible & scalable services to meet the customers' changing requirements, and to support company acquisitions, consolidations  Improve Productivity- BPOs helps Improve quality of service and productivity by bringing greater accountability and transparency in production standards 10
  • 10.  Concentration on core business - With the day-to-day back office operations taken care of, the management is free to concentrate more on the core business of the company  Revenue increase - As stated above, by outsourcing non-core processes, companies can concentrate on increasing their sales and market share, develop new products, spread out into new markets and increase customer service & satisfaction
  • 11.  Cost reductions- Cost reduction is done through process improvements, reengineering and use of technologies that reduce and bring administrative & other costs under control  Outside expertise - BPOs ensure that experts from another company provide the needed guidance and skills 12
  • 12. CHALLENGES FACED BY BPO INDUSTRIES  BPOs have proved a grand success however, certain problems have cropped up in the process for which long term solutions are necessary  Areas of concern in BPO − Working in a BPO may feel is a job that does not require much skills. Anybody possessing basic education, good communication skills is employable after some training − People take up jobs in BPOs because they need to earn money (some as a way of improving their life style) − BPO industry performed many tasks (telemarketing, technical, insurance, data entry etc.) but the major problem is there is no proper training program suitable to all BPOs 13
  • 13.  Attrition in BPOs • Attrition means a gradual reduction in the number of people working in a company due to retirement, resignation or death • The single largest worry of the BPOs industry is attrition in outsourcing context • Attrition in individual firms varies from 15% in larger firm to, up to 40% in the smaller ones
  • 14.  Major reasons for staff Attrition in BPO  BPOs do not present attrition career prospectus. People join BPOs because of the lucrative salaries  Young men and women just out school & graduates join BPOs as a means to earn and save money to finance their higher studies
  • 15. BUSINESS ENVIRONMENT & BPO INDUSTRIES  As there many Challenges before BPO industries, BPO industries have to comp up effective solutions  The study of Business environment is very helpful to minimize problems  Attrition management should be done with the help of the study of the Business Environment  Identification of Strengths & Weaknesses can be with the help of the study of the Business Environment 16
  • 16.  BPOs employees suffer from many health problems  The miseries of the employees are compounded by managers who are not supportive and sympathetic. The employees do not feel secure in their jobs  Attrition is the major limitation of the BPO industries. There is need of proper Attrition Management 17
  • 17.  The study of Business Environment is also helpful in being Active & Alert in Competition  Improve Employee Retention is also a challenge before BPO industries which can effectively faced by studying the Business Environment  BPO industries must offer more specialized services that can create a special position for it & for its Success 18
  • 18.  BPOs are fastest booming & growing industries  BPO industries are spreading very rapidly  There are many advantages of Outsourcing, which are the Strengths of BPOs. Similarly there are Weaknesses too  To survive in the competition it needs to gear up and prepare itself to face the competition  As Business Environment affect BPO industries, it is very necessary for every BPO industries to study it properly