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  1. 1. My Job has been Bangalored BPO Industry Presented by: Bharat Jhalani July 2008
  2. 2. Meaning <ul><li>It refers to people who have been laid off from a multinational because their job has been moved to India. </li></ul><ul><li>Bangalore is cited in particular because it has benefited significantly from such outsourcing. </li></ul>
  3. 3. <ul><li>I have lost my livelihood , I can’t stand where I stood, I feel like I have been gored, People say that I have been bangalored. </li></ul><ul><li>Like a missile it struck my heart, Shattered and tore my life apart, As the cost of labour soared , They got me bangalored. </li></ul><ul><li>Thousands of jobs have been lost Many more are loosing them fast, My company has been floored, And I have been bangalored. </li></ul><ul><li>My job is being done by a stranger As he is cheaper and smarter I have become lazy and bored Because I have been bangalored </li></ul>
  4. 4. Reasons for outsourcing <ul><li>Cost savings </li></ul><ul><li>The lowering of the overall cost of the service to the business. This will involve reducing the scope, defining quality levels, re-pricing, re-negotiation, cost re-structuring. </li></ul>
  5. 5. <ul><li>Cost restructuring </li></ul><ul><li>Operating leverage is a measure that compares fixed costs to variable costs. Outsourcing changes the balance of this ratio by offering a move from variable to fixed cost and also by making variable costs more predictable. </li></ul>
  6. 6. <ul><li>Improve quality </li></ul><ul><li>Achieve a step change in quality through sub-contracting out the service to a specialized company </li></ul><ul><li>Focus and core Competency </li></ul><ul><li>Organization would be free to focus on their core business achieving much required competence, leaving non core responsibilities to the outside party. </li></ul>
  7. 7. <ul><li>Knowledge </li></ul><ul><li>Access to intellectual property and wider experience and knowledge. </li></ul><ul><li>Contract </li></ul><ul><li>Services will be provided to a legally binding contract with financial penalties and legal redress. This is not the case with internal services. </li></ul>
  8. 8. <ul><li>Operational expertise </li></ul><ul><li>Access to operational best practice that would be too difficult or time consuming to develop in-house. </li></ul><ul><li>Staffing issues </li></ul><ul><li>Access to a larger talent pool and a sustainable source of skills. </li></ul>
  9. 9. <ul><li>Capacity management </li></ul><ul><li>An improved method of capacity management of services and technology where the risk in providing the excess capacity is borne by the supplier. </li></ul><ul><li>Reduce time to market </li></ul><ul><li>The acceleration of the development or production of a product through the additional capability brought by the supplier. </li></ul>
  10. 10. <ul><li>Commodification </li></ul><ul><li>The trend of standardizing business processes, IT Services and application services enabling businesses to intelligently buy at the right price </li></ul><ul><li>Allows a wide range of businesses access to services previously only available to large corporations </li></ul>
  11. 11. <ul><li>Risk management </li></ul><ul><li>An approach to risk management for some types of risks is to partner with an outsourcer who is better able to provide the mitigation. </li></ul><ul><li>Customer Pressure </li></ul><ul><li>Customers may see benefits in dealing with your company, but are not happy with the performance of certain elements of the business, which they may not see a solution to except through outsourcing. </li></ul>
  12. 12. Industry size <ul><li>BPO market is worth $122 - $154 billion, of which: </li></ul><ul><ul><ul><ul><li>35-40 retail banking </li></ul></ul></ul></ul><ul><ul><ul><ul><li>25-35 insurance </li></ul></ul></ul></ul><ul><ul><ul><ul><li>10-12 travel/hospitality </li></ul></ul></ul></ul><ul><ul><ul><ul><li>10-12 auto </li></ul></ul></ul></ul><ul><ul><ul><ul><li>8-10 telecoms </li></ul></ul></ul></ul><ul><ul><ul><ul><li>8 pharma </li></ul></ul></ul></ul><ul><ul><ul><ul><li>10-15 others </li></ul></ul></ul></ul><ul><ul><ul><ul><li>20-25 is finance </li></ul></ul></ul></ul>
  13. 13. Indian BPO Industry <ul><li>India has revenues of 10.9 billion USD from offshore BPO </li></ul><ul><li>30 billion USD from IT and total BPO (expected in FY 2008). </li></ul><ul><li>India has some 5-6% share of the total BPO Industry </li></ul><ul><li>industry growing 38% in India last year. </li></ul>
  14. 14. Indian BPO industry <ul><li>The top five Indian BPO exporters for 2006-2007 according to NASSCOM are:- </li></ul><ul><ul><ul><li>Genpact </li></ul></ul></ul><ul><ul><ul><li>WNS Global Services </li></ul></ul></ul><ul><ul><ul><li>Transworks Information Services </li></ul></ul></ul><ul><ul><ul><li>IBM Daksh </li></ul></ul></ul><ul><ul><ul><li>TCS BPO </li></ul></ul></ul>
  15. 15. Challenges <ul><li>A failure to meet service levels </li></ul><ul><li>Unclear contractual issues </li></ul><ul><li>changing requirements </li></ul><ul><li>BPO makes a company very dependent on a vendor and therefore very inflexible. </li></ul>