ppt of mos
TRANSCRIPT
-
8/7/2019 ppt of mos
1/21
May 2, 2011 GROUP 8 1
OUTSOURCING: THE CASE OF INDIAN BPO SEGMENT has been submitted in partial fulfillment of the PGDMcourse, 3rd Trimester of PGDM Program at Jaipuriainstitute of management By Members of Group 8
Shivam -PGMF0923Sanjay -PGMF0920Shubham -PGMF0921
Submitted To : Dr. Banash r ee D ey (Faculty: Ma rk eting Of Se rv ices)
-
8/7/2019 ppt of mos
2/21
May 2, 2011 GROUP 8 2
BREIF INTRODUCTION
Outsourcing refersto a comp a ny th a t
contr a cts w ith a nother comp a ny to
provide services th a t
might other w ise b e performedb y in-house employees .
-
8/7/2019 ppt of mos
3/21
May 2, 2011 GROUP 8 3
BUSINESS PROCESS OUTSOURCING
Form of outsourcing that involves the contracting of the operations andresponsibilities of specific business functions (or processes) to a third-partyservice provider.Originally, this was associated with manufacturingfirms, such as Coca Cola that outsourced large segments of its supplychain. In the contemporary context, it is primarily used to refer to theoutsourcing of services.BPO that is contracted outside a company's country is called offshoreoutsourcing.BPO that is contracted to a company's neighboring (or nearby) country iscalled near shore outsourcing.
-
8/7/2019 ppt of mos
4/21
May 2, 2011 GROUP 8 4
BPO enables companies to reduce cost and Start up operations with greater speedEnsure uniformity of management practices across the globeTap into alternative sources of revenueHave more consistent training practices.
There are three distinct process areas in an organizations cost structure that can be
outsourced, as B usiness administrationSupply chain management, andCustomer service, sales and marketing .
-
8/7/2019 ppt of mos
5/21
May 2, 2011 GROUP 8 5
TYPES OF SERVICES BEING OFFERED BY BPO'S
Customer Support ServicesTechnical Support ServicesTelemarketing ServicesEmployee IT Help-desk ServicesInsurance ProcessingData Entry Services / Data Processing ServicesData Conversion Services
Scanning, OCR with Editing & Indexing ServicesB ook Keeping and Accounting ServicesForm Processing ServicesInternet / Online / Web Research
-
8/7/2019 ppt of mos
6/21
May 2, 2011 GROUP 8 6
NATURE OF OUTSOURCING Companies seeking to outsource their business processesto external parties need to evaluate them thoroughly beforethey begin operations as most B PO activities tend to havemaximum benefit to the outsourcing organization whenthey have a degree of continuity.
This continuity is derived from long-term partnerships. Theservice provider goes through a learning curve beforeefficiencies and effectiveness in managing andimplementing the set of processes set in.
Unlike other outsourced activities such as applicationdevelopment or system integration that tend to be project based and relatively short term, B PO is a long-termundertaking with contracts lasting several years.
-
8/7/2019 ppt of mos
7/21
May 2, 2011 GROUP 8 7
63 percent of BPO contracts are for 5-10 years
25 percent for three-to-five years. This is mainly because of the highcost of switching between vendors.In addition, renewal rates are high. According to vendor responses tothe Gartner survey, nearly 90 percent of contracts are renewed, withonly a 10 percent rate of non-renewals.
Companies that outsource their business process also have to decidewhat the nature and extent of the relationship with their service provider will be. To what extent are they going to outsource will it be purely ona transactional basis, or will it be more of a long-term project?
-
8/7/2019 ppt of mos
8/21
May 2, 2011 GROUP 8 8
INDIAS BPO INDUSTRY India's BPO industry is at a significant turning point. Over the last five tosix years the industry has grown faster than the IT services industry toachieve USD 11 billion revenues by 2008.Next 10 to 15 years can be fundamentally different from the last 5years. A number of demand and supply side factors are likely to alter the industrys growth trajectory.
For e.g. on the demand side, the global economic crisis and changingsocio-economic, demographic and environmental landscape are goingto redefine the addressable opportunity.On the supply side, increasing competition from other low costcountries, shortage of talent and need for new business models arelikely to affect the industry significantly.
It is therefore imperative for BPO customers and providers tounderstand the impact of these factors and transform their approachand business models accordingly.
-
8/7/2019 ppt of mos
9/21
May 2, 2011 GROUP 8 9
BPO: INDIA SWOT BPO: INDIA SWOT
OpportunityOpportunity
Move up the value chain Expand into other countries other than US
StrengthStrength
Huge Skilled labour Superior service maturity Strong governmental support Cost competitiveness
Threat & ChallengeThreat & Challenge
Emerging low-cost nations Unstable geopolitical situation Rising costs Continue supply of talent pool
WeaknessWeakness
Physical Infrastructure Bureaucracy
9
-
8/7/2019 ppt of mos
10/21
May 2, 2011 GROUP 8 10
MARKET SIZE
India's domestic B PO market, with nearly 500 players, isset to grow at a CAGR of 33.3 per cent to touch revenues of $6.82 billion by 2013, up from $1.62 billion recorded in2008.
the B PO market around the globe is around $300-544billion, of which $20 billion will be India's share by theyear 2008.
Revenue \ Year 2003-04 2004-05 2005-06 2006-07 2007-08
Domestic BPO 0.3 0.6 0.9 1.1 1.6
Overall BPORevenue 3.4 5.2 7.2 9.5 12.5
Figures in $ billion Source: Nasscom
-
8/7/2019 ppt of mos
11/21
May 2, 2011 GROUP 8 11
According to Nasscom, total IT-BPO clocked (or will clock)
2007-08: $52 billion (growth of 28%).$40.4 b from exports & $11.6 domestic.
Of the exports, IT grew by 28% to 23.1 b B PO exports went
up by 30% to $10.9 b2008-09*: $62-64 billion2010*: 110 billion
-
8/7/2019 ppt of mos
12/21
May 2, 2011 GROUP 8 12
Top 5 India-Centric Providers BPO Revenue Estimates by Geography,2008 (Millions of Dollars) I ndi a -He a dqu a rtered P roviders R evenue Asia/Pacific Europe North America2008 W orld w ide BP O
Genpact 833 100 233 500 Aditya Birla Minacs 392 4 27 361Firstsource 367 38 100 229WNS 366 2.9 232.4 131.7TCS 361 4.9 188 168.1Total for 4,070.6 407.6 400.2 262.75Top 20 Vendors
-
8/7/2019 ppt of mos
13/21
May 2, 2011 GROUP 8 13
INDIA:THE OUTSOURCING DESTINATION
Cost and quality benefits play a positive role in making India a choicedestination for outsourcing of technology.
According to a study conducted by Forrester Research in November,2001, Indias edge over other competing nations in the IT outsourcingand remote development business is based on the
1. countrys decade old experience in this area.2. Fluency in the English language3 . Corporate friendly atmosphere created by liberal policies of the
Government.
Today, there is a greater focus by MNCs on the Indian IT outsourcingand remote development market. A large number of companies are
1. outsourcing their software development to Indian companies.2. Others are establishing a presence in India and participating actively in
the software export arena.India can be an ideal offshore destination for remote development,remote programming and IT outsourcing.
-
8/7/2019 ppt of mos
14/21
May 2, 2011 GROUP 8 14
COMPETITIVE EDGE
Going forward, China and Philippines can emerge as seriouscompetitors to India.B esides the low cost of labour, the other factors influencingcompanies to outsource to India are the superior quality andlow turnover rates as compared to other countries.
Over the last decade or so India has seen a quantumimprovement in terms of its technical, technological, andtelecommunications infrastructure.
-
8/7/2019 ppt of mos
15/21
May 2, 2011 GROUP 8 15
PE O PLEEnglish speaking workforce
Highly skilled,
IT savvy workersStrong work ethicsHigh level of educationCosmopolitan culture
CA P ACITY2.5 Million graduates
every year
World s second largest Low labour cost
English speaking population Abundant world class
Office space at low cost
L O CATI ON12 Hour time zone difference
Government support
for IT & ITESPolitical stability
Strong financial systemStrong legal system
Cosmopolitan culture
T E C HNO L OG YProven expertise inIT related services
IPCL and other telecomcost going down.Private players in telecom
and Internet service .
-
8/7/2019 ppt of mos
16/21
May 2, 2011 GROUP 8 16
Key Operational Challenges in the BPO-ITES Industry
Soaring revenues, increasing job opportunities, changes in lifestyle, excellent growth prospects and a global footprint - theIndian B PO/ITES industry has achieved it all. Currently sizedat $2.3 billion, the Indian B PO and ITES business in thecountry has been pegged at $21-$24 billion by 2008. Some of the key factors that have led to this unprecedented successare:Financial B enefit - Cost Arbitrage
Process Maturity and Delivery CapabilitiesHuman ResourcesGovernment Support
-
8/7/2019 ppt of mos
17/21
May 2, 2011 GROUP 8 17
Overcome the drawbacks
In order to sustain its success, the Indian BPO/ITESindustry needs to concentrate on strategic issues like
o avoidance of price war,o acquisition of domain knowledge,o growing from low margin businesses to high margin
businesses (Analytics, Financial Management, etc.) and
o leveraging existing IT off shoring services for crossselling to existing clients.
-
8/7/2019 ppt of mos
18/21
May 2, 2011 GROUP 8 18
Apart from the strategic issues, there are a lot of operational challenges
Infrastructure Management 1. Facility Location2. Telecommunication Infrastructure3. Financial Requirements
Human R esources Management 1. High Attrition rates2. Recruitment Strategies
Project Management 1. Estimation Techniques2. Process Maturity
-
8/7/2019 ppt of mos
19/21
May 2, 2011 GROUP 8 19
The challenges have
been classified into ten themes Key Process ChallengesEffective Practice for Improving ResponsivenessProcess Improvement Improving Quality and AccuracyCost-Effective TrainingRetentionOrganization StructureEnd-User SatisfactionManaging Client RelationshipStrategies to Increase B usiness .
-
8/7/2019 ppt of mos
20/21
-
8/7/2019 ppt of mos
21/21
May 2, 2011 GROUP 8 21