Business Process Outsourcing


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  • Back office outsourcing – includes internal business functions such as human resources or finance and accountingFront office outsourcing – includes customer-related services such as contact centre servicesOffshore Outsourcing – BPO that is contracted outside a company's countryNearshore Outsourcing – BPO that is contracted to a company's neighboring (or nearby) countryInformation Technology based Outsourcing - business processes are information technology-basedKnowledge Process Outsourcing – outsourcing of core business activities, which often are competitively important or form an integral part of a company's value chainLegal Process Outsourcing – the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company
  • Business Process Outsourcing

    1. 1. Ishpreet Singh – 12P139 Karan Jaidka – 12P141Lucky Sharma – 12P145 Prabhat Singh– 12P154Vignesh Patil – 12P177 Viswanath Kuppa – 12P180 PGPM – Section C – Group 9
    2. 2. Agenda What is BPO? Video Types of outsourcing Footprints of BPOs Functions of BPO – A brief IT-BPO Contribution to the Indian Economy Why India is a preferred BPO destination Advantages and Limitations of BPO BPO vs KPO BPM Top BPO firms (Indian and Global)
    3. 3. What is Business Process Outsourcing? 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 provider. Originally associated with manufacturing firms
    4. 4. So much variety! Back office Outsourcing Front office Outsourcing Offshore Outsourcing Nearshore Outsourcing Information Technology based Outsourcing Knowledge Process Outsourcing Legal Process Outsourcing
    5. 5. We’re present almost everywhere! Telecom Industry Travel & Hospitality Industry Technology Industry Banking/Financial services Insurance Industry E-commerce, Retail and Distribution Industry Industrial Sector
    6. 6. What we like doing! (1/3)Accounting Managing finances, maximizing tax deductions, filing taxes, providing business and investment advice and developing effective budgets and cash flow projects – all through the services of a Certified Public Accountant (CPA) Tax Preparation  A tax preparation service can reduce tax liabilities by ensuring compliance to tax rules and timelines. They help businesses save tax wherever possible – sale or purchase of business, e- commerce transactions, disputes, and so on.
    7. 7. What we like doing! (2/3)Website Design A business or e-commerce website design is crucial in keeping customers engaged and encouraging repeated visits. This happens to be one of the most outsourced components of a company’s functioning. Customer Service Outsourcing  Companies are outsourcing customer service to focus on core business competencies and operations.  In addition, cost reduction, declining in- house capabilities, and increased demand for customer support channels are driving outsourcing of customer service.
    8. 8. What we like doing! (3/3)Human Resources Outsourcing Combines global sourcing and delivery capabilities to offer flexible and cost- efficient solutions for acquiring, administering and developing talent. Enable customers to embark on the HRO journey easily and realize benefits promptly. Sourcing and Procurement Outsourcing  Provides transformational benefits across the entire Source-to-Procure and Payment value cycle.  Sourcing and Procurement has become a critical area for companies implementing cost-cutting measures.
    9. 9. IT-BPO Contribution to the Indian Economy Aggregate revenues crossed the USD 100 billion mark, exports at USD 69 billion during FY12 Software and services revenues (excluding Hardware), comprising nearly 87 per cent of the total industry Net employment generator - expectedly added 230,000 jobs in FY12, thus providing direct employment to about 2.8 million, and indirectly employing 8.9 million people As a proportion of national GDP, the sector revenues have grown from 1.2% in FY98 to an estimated 7.5 per cent in FY12
    10. 10. Size of the Indian IT-BPO industry from2005 to 2011 and its growth
    11. 11. We love you India! 82% of US–based companies have voted for India as their first and most preferred choice for software outsourcing, over China and the Philippines Indians are enthusiastic and career–focused, who constantly upgrade their skills through training and certificate programs Over 350 million people in India are fluent in the English language, so Indians do not pose a language problem India has a huge talent pool of experienced specialists - 3.1 million students graduate annually from Indian universities in various fields such as software programming, accounting or law Indians work like crazy!! Many Indians work eight hour shifts for six days a week. Indians also willingly work around the clock to compensate for the time difference between India and the US or UK
    12. 12. Please go ahead and outsource! Save big! Taking advantage of the cost benefits Getting access to specialized services Reduced time to delivery, companies benefit from time zone advantages Scaling operations up or down without the hassle of hiring and training Improved customer satisfaction due to high quality and fast delivery Key employees are released from performing non-core or administrative processes and can invest more time and energy in building the firm’s core businesses A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may otherwise take years to amortize
    13. 13. The advantages don’t just end there!
    14. 14. Hold on! There’s a flip side too… Risk is the major drawback with Business Process Outsourcing. Outsourcing of an Information System, for example, can cause security risks both from a communication and from a privacy perspective In countries like India and Philippines, the BPO sector is known for rising incidence of lifestyle and work related illnesses The BPO phenomenon has created an illusion of prosperity and higher standard of living for the employees Countries like India have to contend with a large workforce that ape the West without having the infrastructure or the amenities that the West enjoys
    15. 15. BPO versus KPOBPO is outsourcing of some of the KPO is a subset of BPO. KPO involves business functions to a third party in outsourcing of core functions which may order to save money or may not give cost benefit to the parent company but surely helps in value addition On the other hand, highly specialised andBPOs usually deal with fringe business knowledge based services are outsourced activities such as customer care, finance to KPOs. These activities are directly and HR related to core offering of parent company The motive behind KPO is not only to reduce cost but to get specialisedUSP of a BPO is their being cost solutions for which availing in-house resources might be tough effective KPO job requires one to be competent in a particular field. Also, the training providedBasic education may be enough to get a by the KPOs is more rigorous and sector BPO job specific
    16. 16. Rebranding BPO to BPM According to NASSCOM, the IT industry body of India, the acronym BPO which stands for business process outsourcing, no longer suits the outsourcing industry considering the maturity level it has attained now Indian outsourcing industry has moved up the value chain from just being a third party service provider to being a business partner who manages the entire business process of their clients Indian BPO companies are shifting from being efficient to effective by taking up the responsibility to manage the processes that could transform the business outcomes for the clients
    17. 17. We’ll do it for you! Top Indian BPO Firms Top Global BPO Firms