Outsourcing Business from USA: Is Vietnam a sleeping tiger?

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This is the slide deck that Mr. Shivaji Sengupta presented in the 27th CIO Vietnam offline event.

This is the slide deck that Mr. Shivaji Sengupta presented in the 27th CIO Vietnam offline event.

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  • 1. Outsourcing  Business  from  USA     Is  Viet  Nam  a  sleeping  9ger?   By   Shivaji  (Sam)  Sengupta   me@shivaji.info   www.shivaji.info       www.LinkedIn.com/in/shivaji   www.Twi@er.com/ShivajiSengupta  
  • 2. Worldwide  and  U.S.  Business  Process   Outsourcing  Services  2012-­‐2016  Forecast   IDC  expects  the  worldwide  BPO  market  to  reach  $202.6  billion  in  2016,   represenQng  a  five-­‐year  CAGR  of  5.3%.  The  U.S.  market  is  expected  to  grow  at   a  five-­‐year  CAGR  of  4.2%,  reaching  $92  billion  in  2016.       IDC  concludes  that  BPO  services  vendors  are  beginning  to  assist  the   transforma9on  efforts  of  their  customers.  Evidence  is  now  seen  in  case   studies  from  providers  that  describe  case  studies  where  they  have  leveraged   their  automated  sub-­‐process  solu9ons,  big  data,  business  analy9cs,   mobility,  cloud  delivery,  and  so  forth,  and  as  a  result,  customers  are  not  only   reducing  errors/defects  in  their  processes  but  beginning  to  standardize   processes  globally,  analyze  business  performance  (oLen  in  real  9me),  and   gain  more  insight  and  control  over  their  business  operaQons.     ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 3. Latest  Trends  affecQng  the  USA  Outsourcing  Model   Here  are  few  trends  which  give  idea  of  what  is  stored  in  future  for  this   outsourcing  industry:-­‐   1.  Client  will  ask  for  increased  standardized  solu9ons  from  their   outsourcing  contracts,  so  the  vendor  will  have  to  differenQate  their   services  through  performance  rather  than  pricing.   2.  Industry  leaders  and  analysts  predict  that  industry  will  face  cost   pressure,  though  short  term,  and  Vendors/service  providers,  will  be   under  pressure  for  more  flexible  pricing  contracts.   3.  Smaller  alliances,  which  have  focus  on  opera9onal  efficiencies,  good   quality  control,  lesser  back  office  costs,  will  have  rising  trend.   4.  The  rising  energy  cost  will  pressure  companies  to  look  for  areas  where   cost  reducQon  can  be  done.  Taking  advantage  of  technology  and   outsourced  work  to  save  cost  will  be  on  the  priority  list  of  the   companies.   5.  Cloud  based  technologies  will  grow,  as  they  are  cost  effecQve.   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 4. BPO  Maturity  Scale   Integrated y rit u at ing s a re c In Ad Hoc PO B M ✪ Defined Linked Functional and Process strong Functional strong, Process strong but with gaps Functional strong, Process boundaries visible Key: Functional strong, Process barely visible - Process orientation - Functional orientation
  • 5. Types  of  BPO   ★   ★   ★   ★   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved   ★  
  • 6. Finance  and  AccounQng  BPO   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 7. Outsourcing  advances  in  Publishing  Business   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 8. Insurance  Processing   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 9. Three  Tenets  of  BPO   Flexible  &   Stable   ★     Clients   ★     Human  Capital   Sub  Contract   Technical  Specialist   Technology   BPO     ConQnuous     Incremental   Training  &   Mentoring     People   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved   Process   Standardize d  and   Repeatable    
  • 10. Top  IT  Outsourcing  DesQnaQons   ✪   Ireland   7%   ✪   India   51%   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved   China   ✪   3%   ✪  Philippines   21%  
  • 11. Advantage  India   As  the  markets  in  outsourcing  have  become  Knowledge  intensive,  India  has   become  the  most  preferred  global  hub  for  outsourcing  for  knowledge   services  (KPO).  India  has  large  pool  of  skilled  manpower  resources  such  as   Chartered  Accountants,  MBAs,  Doctors,  Lawyers,  Research  Analysts,  Sogware   engineers,  which  is  necessary  for  growth  of  KPO.       The  areas  of  KPO  are,  where  India  has  edge  over  other  desQnaQons,  are  :-­‐   1.  Finance  and  AccounQng  outsourcing   2.  Legal  Outsourcing   3.  Services  that  require  advanced  English  like  Content  and  Medicine     ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 12. China  Challenges   Undertaking  any  form  of  business  transacQon  in  china  presents  unique  challenges   as  a  result  of  both  cultural  and  regulatory  factors.         High  levels  of  employee  churn  amongst  outsourced  service  providers  coupled   with  limited  cultural  awareness  of  the  importance  of  proprietary  informaQon.  It  is   important  to  note  that  the  PRC  IPR  enforcement  regime  is  focused  heavily  upon   registered  rights,  so  local  registraQon  of  IPR  within  china  can  be  helpful.       There  are  several  key  challenges  which  need  to  be  addressed  in  a  china   outsourcing,  including:     •  Language   •  Due  Diligence   •  Regulatory   •  ProtecQng  IP   •  Contractual   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 13. Advantage  Philippines   From  an  outsourcing  perspecQve,  the  Philippines  is  one  of  the  global  Qtans.  Ranked  2nd   ager  India  as  a  business  process  offshoring  market  by  desQnaQon,  the  Philippines  has   emerged  as  a  power-­‐player  that  has  aggressively  taken  advantage  of  the  outsourcing   trends  over  the  past  decade.  Choosing  the  Philippines  for  your  BPO  requirements  presents   disQnct  advantages:           •  Lifestyle,  language  and  professional  skills  that  are  culturally  specific  to  Western   partners   •  A  mature,  funcQonal  democracy  operaQng  in  a  free-­‐trade  environment   •  A  steady  supply  of  highly  qualified  and  skilled  manpower   •  Well  organized  and  workable  labour  laws   •  English  speaking  populaQon   •  A  'value  added'  and  pro-­‐acQve  work  ethic   •  Access  to  state-­‐of-­‐the-­‐art  technology   •  Deregulated  financial  systems   •  U.S.  based  legal  system     ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 14. Country  Snap  Shot  –  BPO  PerspecQve   NegaQves   PosiQves   India   China   Philippines   Ireland   High  End  BPO     Process  Maturity     Technology   Competence     Scale     Project  funding   High  End  BPO     Language     Process  Maturity   High  end  BPO     Quality     Technology   Competence   Rising  Costs     Quality  Issues     Rising  Costs     Language     Low  end  BPO   Labor  Shortage       High  Cost     Tax  Benefits  Gone   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 15. Viet  Nam  SWOT   DEVELOP   Business  Friendly   Clients  Looking  for  AlternaQves   Geography   Value  BPO  Processes   Young  Workforce   Opportunity   Domain  Experience   Stable  Government   Labor  Costs   Sub  ContracQng   ConnecQvity   Focused    Delivery  Teams    Language   InflaQon   AccounQng  Standards   Threats   Weakness     Technology  Skill  Sets   ENVISION   RECOGNIZE   Strengths   Regional  Business   Technology  Infrastructure   Real  Estate  costs   REDUCE   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved   SCALE        OF  IMPACT           25%   50%   100%  
  • 16. Vietnam  Plan  of  AcQon   Market  –  USA   Market  –  India     BPO Capability Core  Team  -­‐  Trainer   Workflows  &  Technology   Partnerships  &  Alliances   Business  Development   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved   Market  –  EMEA  
  • 17. Its  not  all  about  wages   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 18. Healthcare  Outsourcing  
  • 19. What  is  Healthcare   Health  insurance  is  designed  to  give  you  peace  of  mind.  It  allows  you  to  focus  on  your   health  -­‐-­‐  instead  of  medical  bills  that  could  pile  up  when  you  are  not  feeling  well.     When  a  individual  buy  health  insurance,  the  health  plan  pays  for  many  of  your  medical   expenses,  whether  you  visit  your  doctor  for  prevenQve  care,  such  as  a  yearly  check-­‐up,  or   you  receive  medical  treatment  for  a  health  concern.  Health  Insurance  can  also  help  cover   your  bills  if  you  need  to  go  to  the  emergency  room.     Your  health  insurance  can  protect  your  family  members  as  well,  and  even  extend  beyond   medical  care:  certain  kinds  of  insurance  can  lower  the  cost  of  prescripQon  drugs,  and  vision   and  dental  care.     You  can  buy  health  insurance  through  your  employer,  a  broker,  and  directly  from  an   experienced,  accredited  insurer  such  as  a  Health  Insurance  Company.  You  pay  a  premium  -­‐-­‐   a  monthly  charge  -­‐-­‐  for  your  insurance  and  if  you  get  insurance  through  your  employer,   your  employer  may  also  pay  some  of  the  cost.     You  ogen  pay  some  other  costs  toward  medical  bills,  too.   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 20. Healthcare  Programs   • Mailroom/Claims  Capture   • Membership  and  Provider   Eligibility   • Edit  ResoluQon  for   Suspended  Claims   • Provider  /Member   Correspondence/Suspended   Claims     Claims   Processing   • Print  and  Fulfillment  of   Membership  Kits   • Inbound  &  Outbound   Mailroom  OperaQons   • Membership  ApplicaQon   Review     and  Approval     • Premium  Processing   • Membership  Enrollment  Card   ProducQon  and  fulfillment   Enrollment  &   Membership   Management   • Print  and  Le@er  GeneraQon     for  Surveys   • USPS  /  Fax  /  CD-­‐ROM   Processing   • Capturing  of  Survey     Responses   • Repository  /  Workflow   ApplicaQons   • InvesQgaQon  /  Audit  /  QA   • Audit  Trail  Adhering  to   Compliance   Measurements  for  Case   TAT   • Outbound  /  Inbound  Call     Center   Coordina9on  of   Benefits   (Commercial,   RxCOB)   • Integrated  Le@er  GeneraQon   to  Providers  and  Insured   Fraud  &  Abuse,   • Document  ill   Hospital  BFulfillment     • ANSI  837  Receipt   Audit   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved   • Provider  Contract  Fulfillment   • Contract  Approval  and   CredenQaling:  Direct  Access   into  Client’s  ApplicaQons   • Contract  Repository  &   Workflow   • Premiums  /  Provider   Reimbursements  /  PBM   Payments   • EOB    DistribuQon/Processing/ Payments   • Address  Search  Processing   • CredenQaling  File  Conversion   • CMS  Compliance  Trail   Provider     Contract  &   Creden9aling   Management   Payment   Processing       • Complete  InformaQon   Channel  for  Medical  Benefit   RequesQng   • Mailroom  OperaQons   • Instant  NoQficaQon  for   Expedited  Requests   • Integrated  Variable  Content   Management  for  Approval   and  Denial   • Address  Search  Processing   Pre-­‐ Authoriza9on  &   Referrals   • Repository  Workflow   • CMS  Compliance  Trail   • Address  correcQon  and  re-­‐ mail   Return  Mail  
  • 21. Payment  Methodology   MEMBER ENROLLS IN AN INSURANCE PLAN THROUGH EMPLOYER PATIENT GOES TO A PHYSICIAN/HOSPITAL PHYSICIAN/HOSPITAL PROVIDES SERVICES PRVOIDER PREPARES AND SUBMITS THE MEDICAL CLAIM TO THE INSURANCE COMPANY. CLAIM IS RECEIVED AT HEALTH INSURANCE COM. THROUGH FAX/ ELECTTONICALLY, ETC. CLAIM IS DATA ENTERED CLAIMS LOADED INTO THE ADJUDICATION SYSTEM INSURANCE COMPANY VERIFIES THE CLAIM INSURANCE COMPANY PAY /DENY THE PROVIDER   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 22. AdjudicaQon  Process   Member  ValidaQon   Provider  ValidaQon   DOS/POS/DX/Procedure  Code/ Modifiers/Billing  Amount   ValidaQon   Edits/Suspend    ValidaQon   Resolve  the  edits  based  on   claims  P&P   End  Process   (File/Deny)   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 23. Claims  AdjudicaQon  and  Adjustments    MEDICAL–  Professional,  Ins9tu9onal,  Prescrip9on,   Rehabilita9on,  ER,  DMEPOS    DENTAL  –  Oral  Surgery,  Orthodon9cs,  Periodon9cs   Prosthodon9cs,  Endodon9cs                    VISION    –  Rou9ne  Vision,  Preven9ve  Vision,  Lens&   Frames,  Lab  order  Entry   Psychiatric–    Psychology,  Mental  Health,  Stress   Management   Fully  Insured/Self-­‐Funded   Plan  Coverage   Commercial/Managed  Care(HMO,  POS)/   Indemnity  (PPO,  OOAPPO)   Product  Coverage     Strong  Project  Management  Team   Mul9ple  Surgery  Reduc9on/CCI/NCD   Proven  Quality  Management  System   Pre-­‐Authoriza9on  &  Penal9es     Capabili9es   Unique  Training  Methodology   Timely  filing/  Provider  Appeals     Buddy  System–Unique  Knowledge     Re-­‐Pricing     Exper9se   sharing  plaiorm   Skilled  Examiners  &  SMEs   •  Buddy  System   •  Progressive   Evalua9on   •  Train-­‐the-­‐Trainer   Approach   •  People  Focused   Career  Progression   Methodology   •  Six  Sigma  Control   •  Best  Prac9ces   Deployment   •  Team  Based   Performance   •  Web  Interfaced   Dashboard   Services     Delivery   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved   •  Quality  Control   Process     •  Stra9fied  Internal   Audit  Controls   •  QC  Tools  based   Analysis  &  CAPA   •  Knowledge   Agreement  Analysis   Quality   •  Sta9s9cal  Process   Controls   •  Competency   Resource  Mapping   •  ISO  Cer9fied  Process   Documenta9on   •  Con9nuous  Process   Improvement   Process  Control   • Intranet  Knowledge  Base   Tool   • Web  based  PPM  and  TAT   Controls   • Secured  and  Integrated   Workflow  Model   • Semi-­‐Automa9on   Custom  Developed  Tools   Technology  
  • 24. Typical  SoluQon     Client   •  Current Work for Daimler Trucks NA (Portland, OR) •  Accounts Payable Workflow Solution •  Just Renewed Contract for an Additional 5 Years •  Potential Architecture Leverage of Existing Platform for DAG Services (Moving Towards One Main System) •  Potential Ramp Time Reductions for DAG Based on Knowledge Gained from DTNA Implementation ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 25. Typical  Project  Team   Program   Management  Team Technology Support  Team Delivery  Head Account   Manager Design Recruitment Site  Head Director  PMO AdministraQon Development OperaQons Training Quality Technical   Project  Manager IT TesQng SME  /  Business   Analyst InformaQon   Security Release   Management ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved  
  • 26.     Typical Team Approach   Solu9on  Analysis   Project  Ini9a9on   Func9onal   Requirements     (Including  Desired     Quality  Levels)   Project  Planning   Build  Vendor  &  Client  Teams   Prepara9on   Implementa9on   Deployment   Planning   Systems  Test   Solu9on   Analysis   ©  Shivaji  Sengupta  2013-­‐2015  All  Rights  Reserved   Detail   Design   User   Training   Implementa9on     Stress  Test   Solu9on   Configura9on   &  Prototyping   Produc9on     Documenta9on  
  • 27. Q  &  A   THANK  YOU