Indian Bpo Industry Case

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  • Its very nicely done presentation detailing the various aspect of outsourcing business.....in the list of leading companies, I think one Business process management company is missing which is Tata-BSS. for more info. log on to www.tata-bss.com
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  • 1. Outsourcing: The Case of Indian BPO Segment
    Presented By:-
    Aakrati Gupta
    Ashish Kumar
    AvinashVarma
    Parikshit Soni
  • 2. Business process outsourcing (BPO)
    An organization entering into a contract with another organization to operate and manage one or more of its business processes.
  • 3. Types of BPO
    On-shore BPO: When an enterprise outsources its activities to another company located in the same country
    Near-shore BPO: When activities are outsourced to a neighbouring country
    Off-shore BPO: When business processes are outsourced to a remote or far off country
  • 4. Types of Services offered by the BPO industry
    • customer service center to manage queries
    • 5. Customers calling to check on their order status
    • 6. Round-the-clock technical support
    • 7. Customers calling to resolve a problem with their home PC
    • 8. specialized solutions to the insurance sector
    Insurance Processing
    • target interaction with potential customers
    • 9. Outbound calling to sell wireless services for a telecom provider,
    • 10. Policy Maintenance Management
    • 11. provide technical problem solution
    • 12. system problem resolutions related to desktop, notebooks, OS
    • Product Research, Market Research
    Internet / Online / Web Research
    • Payrol Processing etc
    • 13. Insurance claim form
    • 14. Web and Mailing list research
  • INDIAN BPO INDUSTRY -
  • 15. Updated: August 2009
  • 16. CHALLENGES FACED BY INDIAN BPO INDUSTRY
  • 17. WHAT IS “FINANCE AND ACCOUNTS OUTSOURCING”???
    Finance and Accounting Outsourcing (FAO) is one of the fastest growing outsourcing segments in the world. India, which is the frontrunner and most desired BPO destination, has not yet capitalized on the same.
  • 18. ADVANTAGES OF ‘FINANCE AND ACCOUNTS OUTSOURCING’
  • 19.
  • 20. The ITES Market
    Growing market
    Largest ITES player in world in terms of man power
    Potential to generate direct employment for one million by 2008
    Transition from strategy of renting staff to establishing full service software factories
    Win over global competition
  • 21. Offshore software development
    $ 12 bn a year industry worldwide
    70% market share
    India surpass other countries :
    Employment
    No. of companies sourcing
    Spectrum of vertical & service lines
    2005-07: more than 70% growth in ITES
  • 22. Comparison With Other Countries On IT Services
  • 23. Vendor Landscape
    Four types of players providing ITES:
    1. In-house/captive centers:
    Eg. GE, British Airways, & HSBC
    Out-locating business processes to low cost, high skill off shore locations like India, Ireland, Philippines
    Focusing on their core businesses and outsourcing “non core or non critical activities to third parties
  • 24. 2. Spin offs:
    leveraging their domain knowledge and parent brand to offer industry specific services
    e.g. Sabre (Airline Reservation) and First Data (Card processing)
    3. Focused BPO providers:
    specializing in narrow “non core, non critical” processes and offering standard services to multiple verticals
    e.g. ADP (HR), Teletech (Customer Care)
  • 25. 4. Broad based service providers:
    offering bundled BPO and ITO services in an effort to develop into a one stop shop
    e.g.Pricewaterhouse Cooper
  • 26. Opportunities for Indian BPO Industry
    Offshoring opportunities across wide range of processes as well as across verticals
    70% of ITES potential – customer care, HR, & administration
    Banking & insurance
    High cost base
    High extent of offshorable processes
    Medical BPO
  • 27. Other verticals
    Telecom
    Manufacturing
    Transportation
    Retailing
    Utilities
    Automotive
    Pharmaceuticals
  • 28.
  • 29. Revenues expected to grow at CAGR of 38% over the next 5 years
  • 30. Key Drivers of Indian ITES-BPO Industry
    Improved efficiency and higher service levels due to streamlined processes
    Quality improvements due to a better educated workforce
    Cost savings between 40-50 per cent
    Increase in offshoring by existing customers
    Superior project management skills
    Availability of a highly skilled, educated and English-speaking labour pool
  • 31. Industry Performance
  • 32. Indian IT-BPO Industry - Sector-wise Revenue Break-up
  • 33. The Plethora..
    From non-engineering colleges every year:
    2.7 mn Graduates in India
    0.4 mn Post-graduates
    • Out of this 7-7.5 % of students works in IT industry.
    • 34. At this rate: 20 mn people by 2010
  • Pool of Manpower
    Indian Software employs 6.3 mn programmers
    Qualified labor pool grew 17% annually
    By NASSCOM (end of 2010):
    Software and Services professional – 22.3mn
    The distribution of Software Professional is as follows
  • 35. Pool of Manpower
  • 36. Knowledge Professionals Employed
  • 37. Indian Education System
    Starting from Pre-Nursery, English is the main subject.
    One of the largest pool of English speaking professionals
    More emphasis on Science and Engineering
    Specialized Engineering talent in India
    Eagerness to accommodate clients
  • 38. Government Policies
    Reform process makes licensing process easier
    Government promotes FDI from NRIs
    Government supports the IT enabled start ups
    Ministry of Information & Communication Technologyplays an active role
    Developing infrastructure
    IT Bill 2000
    National Venture Capital Fund of Rs 1000 crore with SIDBI & IDBI
  • 39. Some Statistics
    IT/ITES Industry’s contribution to GDP is 5.2% in 2006-2007
    Size of BPO was $11 bn in FY08
    By 2012 it will increase to $50 bn
    BPO will add 2.5% directly to GDP
    Industry will provide employment to 2 mn
    Source : NASSCOM
  • 40. Budget and BPO/IT Industry
    • Extension of Tax Holidays for Software Technology Park of India (STPI) scheme
    • 41. Removal of Multiple Taxation on ‘Packaged Software’
    • 42. Abolition of Fringe Benefit Tax
    • 43. Increased Outlay for Institutions
    • 44. Safe-harbor Mechanism for Captive Centers
  • Emphasis On Quality
    316 firms adhering to CMM models.
    Services provided to more than 255 companies amongst the fortune 500 companies.
    More onsite operations performed to deliver quality to the customer
    Each vertical developed as a different department in the companies
  • 45. IT – Enabled Services
  • 46. Challenges Faced By The ITES Industry
  • 47. Effect of Recession on the BPO Industry
    Global technology related spending is expected to reduce for the first 2-3 quarters of 2009
    Greater focus on cost and operational efficiencies in the recessionary environment
    There would be pricing pressures coupled with contract renegotiations
  • 48. Obama’s Policy
  • 49. ‘It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York‘
    --- President BarackObama
    ‘It's a more US-US issue rather than one aimed at stopping outsourcing, or off-shoring, or anything to do with India‘
    --- SomMittal (President NASSCOM)
  • 50. Infosys felt:
    US proposal aimed at closing corporate tax loopholes
    aimed at closing corporate tax loopholes
    nothing to do with IT outsourcing
  • 51. Bouncing Back
    Acquisitions
    April 2008, Aegis (BPO) acquired US-based AOL’s call centre in Bangalore
    Expanded offerings
    Diversification into new areas
    Global delivery
    Overseas expansion of operations
    Provides a natural hedge against currency risks
    Discovering the local market
    Rapid growth of the Indian corporate and financial sectors
    Going public
    Raising funds to finance expansion plans
    Locating in smaller cities
    Reduces labour & infrastructure costs
  • 52. Counter Points
    Services and software segments are estimated to cross USD 1.2 trillion by 2012.
    BPO market is expected to grow at a CAGR of 11.9.
    Industry will continue to diversify in terms of geographies, verticals and service lines
    Lack of working age population in the developed economies.
  • 53. Recessionary Measures Taken by Companies
    Billing rate reduced by 25 – 30 %
    Looking for avenues even in the SME’s areas
    Dividends pay out ratio purposely increased to keep shareholders attracted.
    No Increment for the current financial year for the employees
    Employees called back from sites in USA
  • 54. Operational costs reduced highly –
    Conveyance facility now paid by employees instead by the company
    Budget for stationary reduced.
    Using both sides of the paper for printing
    Finding new scopes ahead earlier than the competitors