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Business  Process  Outsourcing Arun Manohar EE03B109
What is BPO? ,[object Object],[object Object],[object Object]
Benefits ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
When does a company outsource? ,[object Object],[object Object],[object Object],[object Object]
 
Global Market for IT-enabled Services (by 2008)          In that the opportunity for India will be $ 17 Billion.      Source:  NASSCOM McKinsey Study - India IT Strategies 141.2 Total 3.0            Market Research 5.0            Website Services 15.0            Networking Consulting & Management 18.0            Remote Education 44.0            Data Search, Integration & Management 5.0            HR Services 1.2            Engineering & Design 2.0            Translation, Transcription & Localization 15.0            Finance & Accounting Services 33.0            Customer Interaction Services The $142 Billion market can be broken up and shown as below:
Software Outsourcing ,[object Object],[object Object],[object Object],Sales Outsourcing Costumer Interaction Services
Source: U.S Department of Labour and Forrester Research, Inc. 3,320,213 1,591,101 587,592 102,674 Total   1,659,310 791,034 295,034 53,987 Office 9 26,564 97,321 29,064 4,619 Sales 8 29,639 13,846 5,576 818 Art, Design 7 74,642 34,673 14,220 1,793 Legal 6 36,770 14,478 3,677 0 Life Sciences 5 84,347 83,237 32,302 3,498 Architecture 4 72,632 276,954 108,991 27,171 Computer 3 48,028 161,722 61,252 10,787 Business 2 88,281 117,835 37,477 0 Management 1 2015 2010 2005 2000 Job Category   Number of U.S. Jobs Moving Offshore Sl.No
How Does Outsourcing Benefit Both the US and India? ,[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],…  but this is good for the economy
… and a growing economy creates new jobs   ,[object Object],[object Object],[object Object],[object Object],[object Object]
Why India? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Top 15 BPO’s in India ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Indian Market size estimates of BPO ,[object Object],[object Object],[object Object]
Comparison of India Vs US BPO operating costs   Source: Industry Sources, Merill Lynch 2003 (From the Nasscom Strategic Review 2003) 20% 11,854 58,598 TOTAL EXPENSES 50% 1,500 3,000 Depreciation 33% 847 2,600 Property Rentals 155% 2,328 1,500 Telecom 12% 1,000 8,571 G&A Expense 14% 6,179 42,927 Personnel (Full Time Employee) India as % of US costs India  United States  US$ Cost per FTE
Cost Difference
What next for India's BPO sector   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Animation Outsourcing ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Legal Outsourcing HR Outsourcing
Statistics regarding number of employees Vs revenues sector wise in India     Source: Nasscom 2,350 1,71,100 Total 465 44,000 Content development 310 25,000 Administration 210 11,000 Payment service 45 2,100 HR 510 24,000 Finance 810 65,000 Customer care Revenue (in $m) Employment   2002-03 Service Area Growth trend of the outsourcing industry
Government Policy ,[object Object],[object Object],[object Object],[object Object]
Problems faced by the BPO Sector ,[object Object],[object Object],[object Object],[object Object]
Future Threats ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
India’s Competitors Good only for low-end jobs Immediate neighbor of US, 30% cheaper than US; Spanish skills Mexico Small talent pool; high costs European language skills Czech Republic, Hungary Poor infrastructure; corruption; language Technology skills Russia Quality of English not good Low costs China Skill shortage Time zone similar to Europe; 25% cost saving, good for niche work South Africa High costs Understands the US market; high-end skils Canada, Ireland, Australia More expensive than India; small talent pool Understands the US market; voice work; low attrition Philippines Limitation USP Country
 
 
Problems in Outsourcing ,[object Object],[object Object],[object Object],Vulnerability  of strategic information
Thank You

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Business Process Outsourcing (in India)

  • 1. Business Process Outsourcing Arun Manohar EE03B109
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  • 6. Global Market for IT-enabled Services (by 2008)          In that the opportunity for India will be $ 17 Billion.      Source: NASSCOM McKinsey Study - India IT Strategies 141.2 Total 3.0            Market Research 5.0            Website Services 15.0            Networking Consulting & Management 18.0            Remote Education 44.0            Data Search, Integration & Management 5.0            HR Services 1.2            Engineering & Design 2.0            Translation, Transcription & Localization 15.0            Finance & Accounting Services 33.0            Customer Interaction Services The $142 Billion market can be broken up and shown as below:
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  • 8. Source: U.S Department of Labour and Forrester Research, Inc. 3,320,213 1,591,101 587,592 102,674 Total   1,659,310 791,034 295,034 53,987 Office 9 26,564 97,321 29,064 4,619 Sales 8 29,639 13,846 5,576 818 Art, Design 7 74,642 34,673 14,220 1,793 Legal 6 36,770 14,478 3,677 0 Life Sciences 5 84,347 83,237 32,302 3,498 Architecture 4 72,632 276,954 108,991 27,171 Computer 3 48,028 161,722 61,252 10,787 Business 2 88,281 117,835 37,477 0 Management 1 2015 2010 2005 2000 Job Category   Number of U.S. Jobs Moving Offshore Sl.No
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  • 15. Comparison of India Vs US BPO operating costs Source: Industry Sources, Merill Lynch 2003 (From the Nasscom Strategic Review 2003) 20% 11,854 58,598 TOTAL EXPENSES 50% 1,500 3,000 Depreciation 33% 847 2,600 Property Rentals 155% 2,328 1,500 Telecom 12% 1,000 8,571 G&A Expense 14% 6,179 42,927 Personnel (Full Time Employee) India as % of US costs India United States US$ Cost per FTE
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  • 19. Statistics regarding number of employees Vs revenues sector wise in India   Source: Nasscom 2,350 1,71,100 Total 465 44,000 Content development 310 25,000 Administration 210 11,000 Payment service 45 2,100 HR 510 24,000 Finance 810 65,000 Customer care Revenue (in $m) Employment   2002-03 Service Area Growth trend of the outsourcing industry
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  • 23. India’s Competitors Good only for low-end jobs Immediate neighbor of US, 30% cheaper than US; Spanish skills Mexico Small talent pool; high costs European language skills Czech Republic, Hungary Poor infrastructure; corruption; language Technology skills Russia Quality of English not good Low costs China Skill shortage Time zone similar to Europe; 25% cost saving, good for niche work South Africa High costs Understands the US market; high-end skils Canada, Ireland, Australia More expensive than India; small talent pool Understands the US market; voice work; low attrition Philippines Limitation USP Country
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