MARKETING RESEARCH

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BPO IN INDIA

Compiled By

Tasneem, Saurin, Shafi, Tommy & Murli

WHAT IS BPO?

Business Process Outsourcing is the strategic use of outside resources to perform activities traditionally handled by internal staff and resources, none of which are core to the functioning of the company. It is a strategy by which an organization contracts routine functions to service providers who specialize in such functions. Thus the service provider is not only responsible for the execution of a business process but also for improving it

HISTORY OF OUTSOURCING

1776 :-Adam Smith discovered competitive advantage through outsourcing.

1970s-1980s :- C. K. Prahalad's core competency theory expounded in Harvard Business School. American Express, Swissair, British Airways and General Electric(GE) start captive units in India.

2000 :-Third Party players spring up in India. By 2005 end, over 300 open shop in India and beyond. Some of them even set up operations outside.

MARKET SHARE The global BPO Industry is estimated to be

worth 120-150 billion dollars, of this the Indian BPO is estimated to be some US $11.4 billion.

The $11-billion Indian BPO industry will reach $30 billion by 2012.

The Indian BPO Industry employs 6,00,000 people approx.

GLOBAL GEOGRAPHICAL DISTRIBUTION OF BPO

PROVIDERS

WHY INDIA AN ATTRACTIVE DESTINATION

FOR BPO Low cost staff Well positioned with ITES Large pool of Skilled workforce English Speaking workforce Conducive Environment Government Policy Support Cost reduction up to 50% Low infrastructure Cost Favorable time lag:(12 hrs with US & 5 hrs with

Europe)

Improving Telecom Infrastructure to meet call centre requirements

SEGMENTS IN BPO~Segments~

Customer Care

Human Resource

Finance

Market Research

Network Consultancy

Technical Support

Collections

Transaction Processes

Accounting

Administration

Training

CALL CENTER & ITS TYPES

A call center is a centralized office used for the purpose of receiving and/or transmitting a large volume of requests by telephone for business specific purposes.

TOP 15 BPO COMPANIES IN INDIARank Co. Rank Co.

1 Genpact 2 WNS(World Network Solution)

3 Wipro BPO 4 HCL BPO Services

5 ICICI One Source

6 IBM Daksh

7 Progeon 8 Aegis BPO Services

9 EXL Service Holdings

10 24/7 Customer

11 MphasiS BPO 12 Intelenet Global Services

13 GTL 14 TCS BPO

15 Transworks

HOW MANY CALL CENTERS IN INDIA

Result of a survey of 824 organizations throughout all the regions representing call centers

India, China, HongKong, Malaysia, Philippines, Singapore & Thailand

India, which now has the most call centre seats in the region, would see their number rise from 96,000 in 2003 up 65 per cent to 158,000 in 2004

Martin Conboy,

(Chief officer of Callcentres.net)

WHAT SECTORS DO THEY SERVE?

Telecom Industry Travel & Hospitality Industry Technology Industry Banking/Financial services Insurance Industry E-commerce & Retail

Industry Industrial Sector Distribution Sector & many

more

SETTING UP A BPO Background Stability Vision Transparency Market Research Employee Centric Environment Certificates

ATTRITION RATE IN BPO & OTHER SECTORS

Sector 0-3years

4-7years

8-12years

13+years

Pharmacy & Chemicals 25% 10% 5% 2%

Manufacturing 8.58% 2.46% 2.46% 3%

Financial Services 20% 20% 20% 20%

Hospitality 35% 25% 20% 7.5%

Ad & Media 40% 35% 20% 15%

BPO 40% 30% 20% 10%

Automobile 7% 3% 2% 2%

Banking 10% 5% 2.5% 2.5%

Infrastructure 16% 11% 7% 11%

IT & Telecom 32% 25% 10% 5%

WHY DO COMPANIES OUTSOURCE?

Reduce Cost. Improve Efficiency. Additional Expertise. Specialized

Technology. Better Solutions. Overall Development

of Outsourced Process.

Concentration on Core Competencies.

CURRENT AFFAIRS OF INDUSTRY

Indian IT-BPO industry records an overall growth of 28% in FY 2007-08

USD 39.6 billion in FY06-07. According to the annual NASSCOM survey:

growth of 28% with revenues of USD 52 billion FY07-08

The Indian IT-BPO industry’s resilience is reflected in its FY07-08 with a 28.2% .

The target of USD 60 billion in exports by FY09-10.

CURRENT AFFAIRS OF INDUSTRY CONTD…

Barrack Obama outsourcing views and US presidential elections.

BPO increasing at an annual growth rate of 50% during 2004-06.

By 2006 will employ 0.4 million people Financial meltdown in the US Decline from 50% to 33% in finance and

insurance sectors. Estimated 5000-8000 lose job in BFSI NASCSCOM: short term and company

specific.

FUTURE OUTLOOKo New horizon: specialized services to

newly emerging industries like retail, fashion, apparel or automobile components

o Customer relation management (CRM).o Improving between the government

and industry.

FUTURE OUTLOOK CONTD…

o Great number of employment up to 0.4 million

o Large number of English speaking college graduates.

o More and more foreign technological firms setting up

o Limited work skills and experience o Neglect in the systemo Media industries

RISE IN RUPEE VALUE LEADS TO FALL IN

OUTSOURCING The Indian rupee has been appreciated

against the dollar in the last 1 year. Core Objective of outsourcing to India

has been affected. Inflation in country has added

problems. The world economy is going through

recession. Better to have a job than to have no

job

COUNTERACT

Flexibility in Operations

Result Oriented Solutions

Go Beyond Cost Saving

Develop Knowledge Industry (Specific)

WHAT MORE SHOULD BE DONE ? Farm & Hunt Strategy should be

implemented Farm for more projects from existing

clients Farm for more projects from new

clients Hunt for new business in same

industry domain Hunt for new business in new sectors

& Industries

WHAT MORE SHOULD BE DONE ?

People seeking a career in BPO Industry should develop Industry Knowledge

Understand Retail & Banking better Campus programme should be

introduced in partnership of the BPO Co. to enhance curriculum & create sensitization

Industry should become more outcome based & think solution rather than just transactions.

Always make your total effort, even when the odds are against you.