Business Process Outsourcing OPS405

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Business Process Outsourcing OPS405

  1. 1. Business Process Outsourcing BPOOPS450Professor Ken Hogan
  2. 2. Terminology• Outsourcing• Offshoring• BPO• ITO• Fragmentation
  3. 3. History of BPO• World War II • Increased international trade• 1960s – 1980s • Importing turns to outsourcing• 1990s – Present • Services now outsourced • BPO begins
  4. 4. HP Goes The Distance For P&G • Corporate Culture & Brand • Finance and Accounting • Bangalore & Mumbai, India • Global Customers w/ Local Support • Core Competencies cut Defects
  5. 5. Global Accounts Payable Processing
  6. 6. BPO Advantages• Productivity Improvements• Cost Savings• Improved HR• Focus on Core Business Competency• Increased Capability
  7. 7. Benefits
  8. 8. BPO Disadvantages• Recent Studies• Knowledge Disappears and is Transferred to the Outsourcing Partner• Poor Quality Control• Restoring Operations is Complicated• Lack of Loyal Employees• Reduction in Strategic Alignment
  9. 9. Videoshttp://www.youtube.com/watch?v=fS (Very Funny)http://www.youtube.com/watch?v=V (Serious)
  10. 10. Why BPO in India?• Language• Education• Quality - Communication - No pirated products• If Chinese Government Policy changes, what will happen? - Turning point was 2010
  11. 11. Comparison: India versus China India China• Educational System • Educational System• Cost Advantage • Cost Advantage• Time/Distance Advantage • Time/Distance Advantage• English proficiency • Close to Japan• Government Support• Quality• Labor Pool
  12. 12. Matching Process to Market India China• Development of • Manufacturing of software components• Call center • Japanese IT Companies • IBM
  13. 13. Business Process Outsourced Source: BusinessWeek, The Future of Outsourcing
  14. 14. Hot Players in OutsourcingBusiness Services Software Development Call Centers1. Hewitt Associates (U.S.) 1. Tata Consultancy Services (India) 1. Convergys (U.S.)2. ACS (U.S.) 2. Infosys Technology (India) 2. Wipro (India)3. Accenture (U.S.) 3. Wipro (India) 3. ICICI One Source (India)4. IBM (U.S.) 4. Accenture (U.S.) 4. ClientLogic (U.S.)5. EDS (U.S.) 5. IBM (U.S.) 5. 24/7 Customer (India)6. Hewlett-Packard (U.S.) 6. Cognizant Techonology Solutions (U.S.) 6. SR.Teleperformance (France)7. Wipro (India) 7. Satyam (India) 7.e Telecare International (U.S.)8. HCL Technologies (India) 8.Patni Computer Systems (India) 8. SITEL (U.S.)9. Tata Consultancy Services (India) 9. EDS (U.S.) 9. Teletech (U.S.)10. WNS Global Services (India) 10. CSC (U.S.) 10. CustomerCorp. (U.S.) Source: BusinessWeek, The Future of Outsourcing
  15. 15. 5 Managerial Steps That Pay Off1. Go Offshore for the right reasons • Shifting a broken process overseas may not fix it2. Choose your model carefully • Could cost more • Get your people on board • Employees and middle managers can make the bold move happen….or stop you in your tracks
  16. 16. 5 Managerial Steps That Pay Off1. Be prepared to invest time and effort • Often what is lacking in offshore partners is a lot of deep process knowledge2. Treat your partners as equals • Telling your partners exactly what to do and how to do it is not conducive to the entire process
  17. 17. Examples• Penske and India’s Genpact • http://www.businessweek.com /magazine/content/06_05/b3969414.htm• Eli Lilly• http://www.centerwatch.com/news-online/article/987/eli-lilly-expands-it statprobe
  18. 18. Sources• Gibson, Stan. “HP Goes DistanceFor P&G,” eWeek, 3/20/2006, Vol. 23 Issue 12, p49-52, 3p.• “A world of work,” The Economist, November 13, 2004, pp. 6-7.• Booton, Bob (2005). Outsourcing in a box. San Jose, CA: Bidness Books Publishing.• Engardio, Pete, "The Future of Outsourcing," Business Week, January 30,2006. pp. 50-58.• Kripalani, Manjeet, "Five offshore practices that pay off," Business Week, January 30, 2006. pp. 60-61.• http://economictimes.indiatimes.com/articleshow/1468167.cms• http://www.behtimes.com/article/123/7/• http://us.rediff.com/money/2004/jan/08bpo.htm• http://globalconnect.ucsd.edu/taipei/documents/Inter- RegionalPartnershipsAnIndiaPerspective.pdf• http://www.cyfuture.com/business-process-outsourcing.htm• http://www.bpoindia.org/• http://www.xicom.biz/research.html• http://www.networkworld.com/news/2004/0407updatibm.html• http://encarta.msn.com/encyclopedia_701702628/Outsourcing.html

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