(Submitted for the Degree of B.Com Honours in Accounting & Finance under the University of Calcutta)

Title of the Project

“Business Processing Outsource (BPO)”

Submitted by

Vivek Saha

Roll no. :

Registration No.:

Supervised By

February, 2013

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This is my proud privilege to express my deepest sense of gratitude and ineptness to my Supervisor Professor Basudeb Sahukhan, Department of commerce, Acharya Girish Chandra College, Kolkata-700003.

Words perhaps would fail to express the gratitude I owe to him. It would have been impossible for me to complete the project work without his constant and inspiring guidance and valuable suggestion at every stage of the project.

I am also indebted to all other teachers of the same department for their constant support, inspiration and suggestions.

I express my gratitude to my parents, friends for their help and inspiration to complete the project.

This project is based on “BPO INDUSTRY IN INDIA”. Business Process Outsourcing is the delegation of one or more of the business processes to an external provider, which in turn owns, manages and controls the selected processes based on some specific standards. It was started in India in early 1980’s by the British Airways who set-up their captive unit in Delhi.

BPO in India starts with low-end data entry processes, but now it move up the value chain and deals in core business processes also. Both voice and non-voice BPO Industry exists in India. Various types of services are performed, call centers being the attraction today for the youth.

BPO operates through three types of business models viz. - Transactional, Niche and Comprehensive. Finance and Accounting has also set its significant place in BPO pie.

In 2008 BPO industry generates USD 12.8 Bn revenue, out of which exports revenue was USD 10.9Bn. It will achieve USD 14.8 Bn by the end of 2009 (expected) and is expected to achieve USD 60Bn by 2012 and USD 225 Bn by the end of 2020.

Cost competitiveness and talented pool of human resources are the key drivers in the growth of BPO industry, but still some factors such as underdeveloped infrastructure and competition from others low-cost countries are providing challenge to the Indian industry, which needs to be addressed carefully by the cooperation of government, NASSCOM and industry it self.

Still, India is shining in the BPO landscape and is the most attractive destination.

Sr.No. TITLE Pg. No.

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1. Introduction . Definition . Objectives

(7-8)78

2. Evolution (9-10)

3. Sizing Of BPO In India (11-16)

4. Segments In BPO . Voice & Non-Voice . Horizontal & Vertical

(16-22)18-2121-22

5. Steps Followed While Outsourcing. (22-23)

6. Regulatory Framework Of Indian BPO. . Data Protection Law. . Sarbanes Oxley Act.

(24-25)2425

7. BPO & Finance. (25-28)

8. Trends In BPO Industry. . Drivers of BPO Growth. . Issue & Challenges.

(29-31)30-3131

9. Competitive Landscape Of Indian BPO. (32-36)

10. Critical Analysis Of BPO. . Benefits of BPO. . Limitations of BPO. . SWOT Analysis.

(36-39)36-373738-39

11. Conclusion (39-40)

Bibliography 41

Annexure-1 42

Annexure-2 43

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Sr.No FIGURES

Pg. No.

1. Definition Of BPO. 7.

2. History Of BPO In India. 9.

3. Value Of Chain Of BPO In India. 10.

4. Growth Of BPO In Terms Of Exports. 11.

5. Growth In Domestic BPO Revenue. 12.

6. Total BPO Growth in Terms Of Revenue. 13.

7. BPO & Employment. 14.

8. Size Of BPO Global Market. 15.

9. Global BPO Market Share. 16.

10. Classification Of Voice & Non-Voice BPO. 17.

11. Horizontal & Vertical BPO. 21.

12. Vertical Segments In BPO. 22.

13. Steps To Be Followed While Outsourcing. 23.

14. Financial BPO Process Being Outsourced. 26.

15. Top 10 BPO Companies. 32.

16. SWOT Analysis. 36.

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Sr.No.

TABLESPg. No.0.

1. BPO Growth In Export. 11.

2. BPO Growth In Domestic Market. 12.

3. Overall (Export & Domestic) Growth. 13.

4. Employment Generated By BPO. 14.

5. Global BPO Market. 15.

6. Major Players In BPO Finance 18.

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1. INTRODUCTION TO BPO

DEFINITION OF BPO

OUTSOURCING: -An organization entering into contract with another organization to operate and manage one or more of its business processes

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BASED ON VOICE BASED ON LOCATION

BUSINESS PROCESS OUTSOURCING: - It is the delegation of one or more of IT intensive business processes to an external provider, which in turn owns, manages, and administers the selected processes based on defined and measurable performance criteria.

BPO as per the work performed can be classified as VOICE BASED, which includes customer related services such as technical support, marketing etc. and NON-VOICE, which includes internal business operations. And as per the location involved it can be classified as:

ON-SHORE: BPO that is contracted inside a company’s country.

NEAR-SHORE: BPO that is contracted to a company’s neighboring country.

OFF-SHORE: BPO that is contracted outside a company’s country.

OBJECTIVES OF BPO:

Traditionally, the main objective of companies outsourcing their business processes to India was the want of low cost. But now-a-days, companies that offshore their business processes to India are no longer looking at cost reduction alone. They typically want to achieve:

1) Process improvement and efficiency - faster turnaround and greater productivity

2 ) C o s t s a v i n g s .

3 ) I m p r o v e d q u a l i t y - l e s s e r r o r s / r e w o r k  

4) Building/strengthening presence in a new market/foreign country

5) Increased focus on core competencies - e.g. developing new products or services

6 ) B u i l d i n g b u s i n e s s v a l u e a n d s t r a t e g i c d i f f e r e n t i a t i o n .

2. EVOLUTION OF BPO IN INDIA.

Outsourcing as a concept is probably one the oldest and most commonly practiced. As a concept and practice it pervades all aspects of our lives- domestic as well as professional. The idea of outsourcing has its roots in the `competitive

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advantage` theory propagated by Adam Smith in his books ` THE WEALTH OF NATIONS ` which was published in the year 1776. Over the years, the meaning of the term outsourcing has undergone a sea-change.

Evolution of BPO in India can further be explain under two heads:-

1. HISTORY OF BPO IN INDIA.

2. VALUE CHAIN OF BPO IN INDIA.

1. HISTORY OF BPO IN INDIA: In India BPO started with British airways setting their back-office operations in Delhi in early 1980`s. Starting with captive units India BPO moves to the third p[arty BPO`s. thereafter the entry of IT-majors brightens the Indian BPO industry in global BPO landscape.

Following diagram depicts briefly the history of BPO in India:

2. VALUE CHAIN OF BPO IN INDIA:

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Value chain is a chain describing the value of business processes being outsourced to India. Value can be explained as the importance of business processes to the firm outsourcing its business operations. India is moving up in the value-chain. At the beginning only low end data entry processes were outsourced to India. With the passage of time trend goes on changing. From low value data entry processes chain moves up to core processes being outsourced now-a-days. It started with:

MID-1990’s- DATA ENTRY PROCESSES: Data entry simply includes entry of data from papers, books or any hard copy format to computer aided soft copy.

DATA CONVERSION PROCESSES: Conversion of data across various databases on different platforms.

LATE 1990’s- CALL CENTRE SERVICES:  Call centers are outlets that exist mainly to answer inbound or place outbound telephone calls and can exist for the purpose of sales, marketing, telemarketing, customer service, technical/non technical support or any other specific business activity.

2000- TRANSCRIPTION PROCESSES: Transcription process implies transcribing the audio or visual information into electronic document form. 

Up till 2000 only non-core activities were outsourced. Then the trend changed and today the core activities also occupy a significant proportion in total Indian BPO pie.

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DATA ENTRYDATA CONVERSION

CALL-CENTRE

TRANSCRIPTION- PROCESS- NON CORE

TRANSCRIPTION-PROCESS-CORE

Fig 3: VALUE CHAIN OF BPO IN INDIA

TODAY2000MID 1990’S LATE 1990’S

The above figure clearly shows that exports in the BPO market are increasing at the fluctuating rate. In 2003 it was USD 2.6 billion. Then it increased to USD 3.1

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Fig. 4 –GROWTH OF BPO IN TERMS OF EXPORTs

billion in 2004.And in the financial year 2008 it was USD 10.9 billion. It is expected to reach at USD 12.8 billion by the end of 2009. Figure indicates that it grows almost at the rate of 50% from 2003 to 2006. After that it grows almost at the rate of 20%-30%.

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The above figure shows the trend of growth in domestic revenues of Indian BPO industry. It shows that onshore component is less than offshore component. In 2003 revenue of BPO from domestic industry was USD 0.2 Billion. It increased to USD 0.3 Billion in 2004. Then in 2008 it was USD1.6Billion and is expected to reach USD 1.9 Billion at the end of 2009. It is growing at a slow pace than export component of BPO market.

FIG 6: TOTAL BPO GROWTH IN TERMS OF REVENUE

As shown by the figure overall BPO grow steadily at the rate of almost 28% in 2005 total BPO industry was USD 12.5 Billion while it is expected to reach USD Billion in 2009.

FUTURE LOOK: As per the study conducted by NASSCOM Indian BPO industry is growing at a CAGR of 28%. If it continues with this pace it will reach

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Table 3:- OVERALL (Export & Domestic) BPO Growth

to USD 30Billion by 2012 but it is expected that it will touch USD 60 Billion because of the many advantages it has over the competitors.While the other study of NASSCOM predicts the Indian BPO market will reach USD 225 Billon by 2020.So it can be represented as:2012=USD 60Billion E.2020= USD 175 Billion (Exports) +USD 50 Billion (domestic) .So 2020= USD 225 Billion.E= Expected.

D. IN TERMS OF EMPLOYMENT GENERATED

TABLE 4. EMPLOYMENT GENEREATED BY BPO

FIGURE 7. BPO AND EMPLOYMENT

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So the greatest pool of graduates is moving towards the BPO industry thereby decreasing the unemployment and developing the economy by utilizing the available pool of talent.

2. GLOBAL BPO MARKET AND INDIA’S SHARE:

Global BPO market is also growing at the rapid pace. As shown by the following table in 2012 it was USD 5.1 Billion and progressed to USD 53.4 Billion in 2017.

FIGURE 8- SIZE OF GLOBAL BPO MARKET

Out of this total global market India’s share is estimated to be 5-6%, currently as shown by the following diagram. US have the largest share of 52% followed by UK which commands 20% of the BPO pie. GARTNER predicts that India’s share in the Global BPO market will get double by 2010i.e. it will reach to 10% of total BPO market.

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FIGURE 9- GLOBAL BPO MARKET SHARE

4. SEGMENTS IN BPO

BPO in India is organized in many segments. Previously there was only low end voice operations were outsourced to India. In the early days of BPO in India voice operations were the major actors leaving a very small proportion for non-voice activities. But, as India moves up in the value chain, non-voice operations starting occupy a bigger proportion of the BPO pie. Except voice and non-voice, BPO in India can also be segmented into horizontal and vertical.

So business process outsourcing can be segmented as:

1. VOICE AND NON-VOICE BPO.2. HORIZONTALLY AND VERTICALLY BPO.

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1. VOICE AND NON-VOICE BPO.

FIGURE 10: CLASSIFICATION OF VOICE AND NON-VOICE BPO

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BPO

VOICE BPO NON-VOICE BPO

INBOUND SALES

OUTBOUND SALES

TELEMARKETING

CUSTOMER SERVICES

ORDER PROCESSING

TECHNICAL SUPPORT

APPOINTMENT SETTINGS

DEBT COLLECTION

HELP DESK

MARKET RESEARCH AND QUALITY SURVEYS

ACCOUNTING

DATA ENTRY

DATABASE MANAGEMENT

CLAIMS PROCUREMENT

TRANSCRIPTION

HUMAN RESOURCES

(A) VOICE BPO (FRONT OFFICE OPERATIONS)

Voice activities being outsourced include:

1. INBOUND SALES:

2. OUTBOUND SALES

3. TELEMARKETING

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4. CUSTOMER SERVICE

5. ORDER PROCESSING

6. TECHNICAL SUPPORT

7. APPOINTMENT SETTING

8. DEBT COLLECTION

9. HELP DESK

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10. MARKET RESEARCH AND QUALITY SURVEYS

(B) NON-VOICE BPO (BACK OFFICE OPERATIONS)

1. ACCOUNTING.

2. DATA ENTRY.

Data entry services helps in getting large amounts of information added into databases or specific applications, cost effectively.

3. DATABASE MANAGEMENT.

Every business has customer and contact databases to manage and keep up to date. Database management service allows keeping database clean and up to date through a program of contacting our customers to ensure you have the latest information.

4. CLAIMS PROCESSING.

Typically associated with the insurance industry, claims processing actually covers any process that starts with a customer enquiry that requires investigation, analysis, assessment, decision, and follow-up with a formal response.

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5. TRANSCRIPTION.

Transcription is the process of converting the audio or visual information into electronic document form. 

Medical transcription was one of the first offshore BPO services to be launched from India. This service involves the transcribing of medical records from audio format or dictated by doctors or other healthcare into either a hard copy or electronic format.

6. HUMAN RESOURCE

Human resources are the manpower employed by the firm. It is the valuable asset of the company. More and more businesses are outsourcing their human resource business function or parts of that function to experts who do this service full-time. This ranges from hiring processes to management of employee benefits process to payroll. Businesses that find a high quality service provider outsource their HR activities and can increase their employee satisfaction vis-à-vis reduce expenses.

2. HORIZONTAL AND VERTICAL BPO:

There are two types of BPO opportunities in the market— 

1. High volume and low value

2. High value and low volume. High-volume and low-value are the horizontal BPO’s while high-value and low-volume are the vertical BPO’s.

Figure 11: HORIZONTAL AND VERTICAL BPO

Now lets discuss in detail:

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Horizontal BPO

Vertical BPO BPO

(A) HORIZONTAL BPO

(B) VERTICAL BPO

Fig.12: VERTICAL SEGMENTS IN BPO.22

5. STEPS TO BE FOLLOWED WHILE OUTSOURCING

Outsourcing means we are handling our business processes to some outsider firm. So when the firm is outsourcing its core high-valued business processes it should take diligent care as any mistake can mar the firm. Not only the core ones, even non-core processes contribute a lot to the firm directly or indirectly. So outsourcing decision should be made carefully. For outsourcing to be effective there are certain steps which need to be followed:

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Security level

Fig. 14: STEPS TO BE FOLLOWED WHILE OUTSOUCING

6. REGULATORY FRAMWORK ON INDIAN BPO

A. DATA PROTECTION LAW.

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B. SARABANES OXLEY ACT.

7. BPO AND FINANCE.

A. SEGMENTS IN BPO FINANCE.

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1. COMPANIES IN BANKING, FINANCIAL SERVICES AND INSURANCES (BFSI).

2. NON-BFSI COMPANIES.

B. FINANCIAL BPO PROCESSES BEING OUTSOURCED:

Three types of financial processes are being outsourced to India. These include:

1. CLERICAL LOW GRADE WORK:

Most of the work being outsourced to India in finance and accounting vertical consists of clerical low-grade work. Almost 60% to 70% of the work includes processes like

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If they outsource finance, it is their core business that they are outsourcing. In fact, finance has been at the forefront of outsourcing – General Electric, American Express and Citi Bank led the initiative in India. The reason is that their customer-facing front office is in high cost locations. But there are functions, which, if delivered at low costs, would have a major impact on their balance sheets.

From them, the finance function is important as it helps the rest of the organization runs smoothly. So such a company will outsource functions likes sales orders processing, accounts payable, receivable managements, balance-sheet management and cash management. For instance, a US based industrial major currently evaluating finance BPO companies in India has 850 employees looking at finance at a total annual cost of $110 million. Global airlines also, under cost pressures, are looking India to outsource revenue accounting and sales audit functions. These include British Airways, Australian Airlines, Malaysian Airlines and Qatar Airways.

TOP END ACTIVITIES

(AROUND 10%)

MIDDLE END ACTIVITIES

(AROUND 25%-33%)

CLERICAL LOW END ACTIVITIES

(AROUND 65%-75%)

1.

2.

3. Fig.15: Financial BPO process being outsourced

transaction, accounting, fixed assets (depreciation calculation etc.), account receivable, account payable, travel & living, cash application (goes into making ledger entries) and account reconciliation.

2. MIDDLE LEVEL:

The middle level which constitutes almost 25% to 35% of the work includes processes like accounting operations, general ledger consolidation, reporting. It also includes tasks such as income tax returns.

3. TOP-END ACTIVITIES:

The top end activities constitute only 10% of the work in the finance and accounting vertical. At the top end of the scale are activities like administration of mortgage-backed securities, financial planning and analysis, requiring expertise of at least MBA finance or a statistics graduate. Other work in this category includes equity/debt market research and analysis.

C. REASONS FOR OUTSOURCING FINANCE AND ACCOUNTING

There are many reasons which lure a business to outsource its finance and accounting operations. These are:

1. EXPECTATION TO REDUCE COST:

Study conducted by Deloitte suggests that the firms achieve 39 percent cost savings from moving operations to low-cost centers.

2. STANDARDIZING THE FINANCE AND ACCOUNTING PROCESS:Companies on their own do not have the ability to standardize finance & accounting either because of a lack of specialized resources, scale or simply because this is not their prime area of focus. This is why it makes sense to outsource it. And as the back office becomes more standardized, in particular the accounting functions, even bigger cost savings can be seen.

3. OUTSOURCING DISASTER RELIEF:Organizations have become extra cautious after the WTC disaster and want to have protection against disasters. Finance & accounting activities constitute a major part of the activities of all corporate and as such even organizations not having finance and accounting as their core processes want to safeguard their finance & accounting processes. For example, after the collapse of the WTC the Twin Towers Fund (TTF) gave the task of handling the accounting functions to outsource Partners International (OPI), a BPO firm specializing in finance and accounting. OPI's Bangalore office handles most of TTF's accounting work.

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Source documents are scanned in New York and sent to Bangalore by remote connection; the Bangalore office handles 95 percent of document and transaction processing.

4. REAPING THE BENEFITS OF ECONOMIES OF SCALE:

Outsourcing finance and accounting processes to cheaper locations where manpower and infrastructure is less costly gives the outsourcing companies the advantage of economies of scale. Moreover working hours can be increased in locations such as India by increasing the number of shifts.

5. BENEFITING FROM THE TECHNOLOGY AND EXPERIENCE OF THE SERVICE PROVIDER:

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The service gives cutting edge technology and has expertise in specific verticals. Hence it is able to provide the benefit of excellent expertise and best process in that specific vertical.

D.MAJOR PLAYERS IN INDIA BPO FINANCE

Following is the list of major players in this vertical and the approximately number of people in the respective organization.

Table7. Major players in BPO finance

The above table explains the major BPO players who are dealing in outsourcing finance including other business process, and the number of people employed by them in finance outsourcing.

9. TRENDS IN INDIAN BPO INDUSTRY

Trends imply the various changes which we are going to see in the near future in Indian BPO industry whether positive or negative.

Various trends include:

1. OUTSOURCING WILL STAY CLOSER TO HOME.

With available labor from layoffs in many industries and tightened risk profiles of companies, especially in the financial services industry, companies won't have to go far offshore to find talent. Planned initiatives by Barrack Obama and increased government spending on infrastructure projects could lead to more domestic outsourcing, particularly for construction, real estate and technology, IAOP predicts.

2. GLOBAL UNCERTAINITIES WILL CREATE OUTSOURCING VOLATILITY:

Overall, the fast-paced growth in outsourcing will slow in 2009, as companies lower their spending on information technology, consolidate or exit markets, and find skilled labor locally from layoffs in financial services and other industries.

3. STRATEGIC COMPANIES WILL PROSPER:

The economic meltdown could create opportunities for strong, well-positioned companies."While the economic climate will not immediately improve, companies involved in outsourcing that act strategically and decisively for the long-term will be increasingly valued and sought," said IAOP board member Sven Govaars, senior vice president, Colliers International.

4. SHIFT IN FOCUS FROM COST ARBITRAGE TO VALUE ADDITION:

Traditionally the main aim of the companies outsourcing to India was the cost saving. But now as India moves up the value chain, this aim shifts to value-addition and efficiency.

5. SOCIAL RESPONSIBILITY WILL BE OUTSOURCING THEME:

6. IT WILL ALSO CREATE NEWRER OPPORTUNITIES, NEW MARKETS AND ALSO THE NEW SERVICES.

7. SERVICE PROVIDERS WILL SHIFT FROM TIER-1 TO TIER-2 AND TIER-3 CITIES THEREBY CREATING RURAL BPO’S.

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New government direction under OBAMA could promote higher emphasis on socially responsible business environments; driving outsources to create solutions that address them. IAOP predicts will include industry competitive employee retention and welfare programs.

A. DRIVERS OF BPO GROWTH IN INDIA:

A driver is most commonly a factor that contributes to the growth of a particular business.

There are mainly six important business drivers that are pushing enterprises to consider the BPO option in India. These are:

1. ABUNDANT TALENT.

India’s young demographic profile is an inherent advantage complemented by an academic infrastructure that generates a large pool of English speaking talent. Talent suitability concerns are being addressed through a combination of government, academia and industry led initiatives. It includes efforts by NASSCOM and other education agencies like UGC and AICTE to facilitate industry inputs on curriculum and teaching.

2. SUSTAINED COST COMPETITIVESS:

India has a strong track record of delivering a significant cost advantage, with client’s regularly reporting savings of 25%-50% over the original cost base. the ability to achieve such high levels of cost advantage by sourcing to India is driven by the ability to access highly skilled talent at lower wage cost.

3. CONTINUED FOCUS ON QUALITY.

Demonstrated process quality and expertise in service delivery has been a key factor driving India’s leadership in global service delivery. Since the inception of industry in India, players within the India has been focusing on quality initiatives, to align themselves with international standards.

4. WORLD CLASS INFORMATION SECURITY ENVIRONMENT:

Indian authorities have built a strong foundation for an “info-source” environment in the country. These include strengthening the regulatory framework through proposed amendments to further strengthen the IT Act-2000.

5. RAPID GROWTH IN KEY BUSINESS INFRASTRUCTURE.

BPO sector has been a key beneficiary with the cost of international connectivity declining rapidly and service level improving significantly. The growth is taking place not only in existing urban centre but also in satellite towns and smaller cities.

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The enabling policy environment in India was instrumental in catalyzing the early phase of growth in this sector. Policy makers in India have laid special emphasis on encouraging foreign participation, with participating firms enjoying minimum regulatory and policy restrictions along with a broad range of fiscal and procedural incentives.

B. ISSUES AND CHALLENGES IN BPO GROWTH:

1. INFRASTRUCTURE CHALLENGE:

India’s ITES-BPO industry continues to attract significant business from both the US and Western Europe. While national issues with infrastructure, e.g. telecommunications system etc is being addressed, the local infrastructure (roads, bridges, airports, urban transportation, etc) is becoming a bottleneck to the expansion of capacity. Getting a connection is still not a hassle-free job.

2. MOVING UP THE VALUE CHAIN:

Customers are looking for vendors who can provide end-to-end solutions. Indian vendors are using several methods like tie-ups with existing players, acquisitions, investing in research and development and leveraging industry best practices for expansion.

3. SHRINKING PROFIT MARGINS:

To sustain in the highly competitive market, the players are looking for newer revenue sources and opportunities to keep cash flowing in. Again with service level agreements becoming stringent and sales cycles stretching far in international deals, the BPO service providers need deeper pockets and financial muscles. High initial capital investments in the industry, long gestational periods, competition leading to reduced billing rates, appreciation of rupee against the US dollar have led to increased margin pressures and increased industry consolidation.

4. HUMAN RESOURCE ISSUES:

Another major problem is the high attrition and growth aspirations of the workforce. Odd hours at job and stress are supposed to be major causes of high attrition rate which increases recruitment and training costs. The service providers need to spell out a comprehensive human resource policy that outlines a clear career progression path for the employees.

5. OTHERS:

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10. COMPETITIVE LANDSCAPE OF BPO IN INDIA

BPO Industry in India is growing very fast. It is gaining ground everywhere. There is a lot of competition today in BPO landscape. Let’s check out which are the major players in India. We will study this under two heads:

Following is the list of Top 10 BPO Companies In India By Maximum Revenue as per data released by Dataquest, an industry journal. The BPO companies in India posted a total revenue of Rs. 32,246 crore in 2010-2011.

As per the Industry fact sheet published by NASSCOM, the Indian ITES-BPO segment grew at 37% in 2005-06 (ITES-BPO) and the exports are expected to cross US$ 9 billion by end 2007.

Fig. 16- TOP 10 BPO COMPANIES IN INDIA.32

TOP 10 BPO CAOMPANIES IN INDIA

BASED ON REVENUE BASED ON EMPLOYEE SATISFACTION

1. DAKSH-E-SERVICE

2. ISEVA

3. ICICI ONESOURCE

4. EFUNDS INTERNATIONAL

5. HINDUJA TMT

6. EXL SERVICES

7. AJUBA

8. MOTIF

9. MIT SMART SERVE

10. HCL TECH BPO

1. GENPACT.

2. TCS BPO.

3. AEGIS BPO.

4. WIPRO BPO.

5. FIRST SOURCE SPOULTIONS.

6. WNS GLOBAL SOLUTIONS.

7. INFOSYS BPO.

8. ADITYA BIRLA MINACS.

9. IBM DAKSH.

10. IBM GLOBAL PROCESS SERVICES

Now detailed description of BPO’s based on Revenue:

1. GENPACT:

Genpact was born in 1997 as the India-based business process operations for GE Capital. In 2005, with equity investments from General Atlantic and Oak Hill Capital Partners, it became

an independent company and was rebranded Genpact. It is India's No. 1 BPO firm.

2. WNS GLOBAL

3. IBM DAKSH

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4. ADITYA BIRLA MINACS WORLDWIDE

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5. WIPRO BPO:

Now detailed description of BPO’s based on Employee Satisfaction:

1. ISEVA.

2. ICICI ONE SOURCE.

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3. EFUNDS INTERNATIONAL.

4. AJUBA.

5. MOTIF.

10. CRITICAL ANALYSIS OF BUSINESS PROCESSOUTSOURCING

Critical analysis means an appraisal based on careful analytical evaluation. Now for analyzing the BPO industry we will study its:

1 . B e n e f i t s o f B P O i n d u s t r y .2 . L i m i t a t i o n s o f B P O i n d u s t r y .

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3 . S W O T A n a l y s i s .

1. BENEFITS OF OUTSOURCING:

Outsourcing your non-core activities will give you more time to concentrate on your core business processes.

Off shoring can give you access to professional, expert and high-quality services. With outsourcing your organization can experience increased efficiency and

productivity in non-core business processes. Offshore outsourcing can help you save on time, effort, manpower, operating

costs and training costs amongst others. Outsourcing can make your organization more flexible to change. Your organization can save on investing in the latest technology, software and

infrastructure as your outsourcing partner would be investing in these. Outsourcing can give you assurance that your business processes are being

carried out efficiently, proficiently and within a fast turnaround time. Off shoring can help your organization save on capital expenditures. By outsourcing, your company can save on management problems as your

offshore partner will be managing the team who does your work. By outsourcing, you can cater to the new and challenging demands of your

customers. Sharing your business risks is possible with outsourcing. Outsourcing can give your business a competitive advantage as you will be able to

increase productivity in all the areas of your business. Outsourcing can help your organization to cut its operational costs to more than

half. If you want your organization to stay ahead of competition, concentrate on core

competencies and make use of the latest technologies, then outsourcing can help your organization achieve all this and more.

2. LIMITATIONS OF OUTSOURCING:

At times, it is more cost-effective to conduct a particular business process, rather than outsourcing it.

While outsourcing services such as payroll processing services and tax preparation services, your outsourcing provider will be able to see your company’s confidential information and hence there is a threat to security and confidentiality in outsourcing.

When you begin to outsource your business processes, you might find it difficult to manage the offshore provider when compared to managing processes within your organization.

Off shoring can create potential redundancies for your organization. In case, your offshore service provider becomes bankrupt or goes out of business,

your organization will have to immediately move your business processes in-house or find another outsourcing provider.

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The employees in your organization might not like the idea of you outsourcing your   processes and they might express lack of interest or lack of quality at work.

Your outsourcing provider might not be only providing services for your organization. Since your provider might be catering to the needs of several companies, there might be not complete devotion to you and your company.

By outsourcing, you might forget to cater to the needs of your valuable customers as your focus will be on the business process that is outsourced.

In outsourcing, you may lose your control over the process that is outsourced. Outsourcing, though cost-effective, might have hidden costs, such as the legal

costs incurred while signing a contract between companies. You might also have to spend a lot of time and effort in getting the contract signed.

3. SWOT ANALYSIS OF INDIAN BPO INDUSTRY

FIGURE 17 - SWOT ANALYSIS OF INDIAN BPO INDUSTRY

1. STRENGTHS:

Highly skilled, English-speaking workforce. Abundant manpower. Cheaper workforce than their Western counterparts. According to Nasscom, The wage

difference is as high as 70-80 percent when compared to their Western counterparts. Lower attrition rates than in the West. Dedicated workforce aiming at making a long-term career in the field. Round-the-clock advantage for Western companies due to the huge time difference. Lower response time with efficient and effective service. Operational excellence. Conducive business environment.

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STRENGHT

OPPORTUNITIES

THREATS

WEAKNESS

2. WEAKNESSES:

Recent months have seen a rise in the level of attrition rates among BPO workers who are quitting their jobs to pursue higher studies. Of late workers have shown a tendency not to pursue BPO as a full-time career.

The cost of telecom and network infrastructure is much higher in India than in the US. Manpower shortage. Local infrastructure.

3. OPPORTUNITIES:

To work closely with associations like Nasscom to portray India as the most favoured BPO/ITES destination in the world.

Indian BPO/ITES companies should work closely with Western governments and assuage their concerns and issues.

India can be branded as a quality BPO destination rather than a low-cost destination. $60 billion BPO business by 2010.

4. THREATS:

The anti-outsourcing legislation in the US state of New Jersey. Three more states in the United States are planning legislation against outsourcing. These are- Connecticut, Missouri and Wisconsin.

Workers in British Telecom have protested against outsourcing of work to Indian BPO companies.

Other BPO/ITES destinations such as China, Philippines and South Africa could have an edge on the cost factor.

Slowdown of demand.

11. CONCLUSION

Business Process Outsourcing industry is growing rapidly since its inception. Indian BPO’s are going through exciting times. Starting with captive units and low-end activities BPO’s are now moving to high-end activities. Indian BPO’s are operating in both front-office and back-office operations.BPO industry in India is growing at the rate of 28% and is expected to reach around USD14.8 Bn in2009. Exports are accounting major proportion, which are in journey to touch USD 12.8 Bn by the end of 2009. These are growing at the fluctuating rate of around 20%-30% a year. Domestic BPO market is also in growth and has accounted USD1.6 Bn in 2008.Inspite of this

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BPO’s are helping in the development of economy by decreasing the evil of unemployment. Since the evolution of BPO it is serving the country by providing the employment to talented and able youth of the country. Up till 2009 it has generated around 730,000 employments in the country. Shift in BPO services has also been experienced with moving from low-end to BFSI (Banking, Financial Services and Insurance) and Hi-Tech sector. But the economic downturn has impacted the growth of BPO industry. Still it occupied 60% of the offshore market. The industry is expected to achieve USD 60 Bn by the end of 2012. And USD 225 Bn by the end of 2020.Various trends have been experienced in BPO.

The BPO industry is drawing significant attention and India, by virtue of its dominance in this sector is at the center of this attention. The shift of the Indian economy towards more service orientation suggests that in the long term, India will continue to be a major player in the global BPO industry.

Despite the growth that this industry is witnessing, there are certain areas that require greater attention going forward from service providers to ensure that the industry remains firmly on the growth path. This survey was conducted with the objective of analyzing some of the key trends that will drive the future direction of the industry. We

Have endeavored to highlight some of the key risks that the industry faces and will face as the industry evolves. We have also discussed the corresponding risk-mitigants that service providers and companies are focusing on, to manage the risks. We hope that this survey provides service providers with a deeper understanding of the

Industry they operate in and acts as an important input to potential customers considering outsourcing their processes to India.

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1. www.nasscom.com

2. www.bpoindia.com

3. www.equaterra.com

4. www.economictimes.com

5. www.coolavenues.com

6. www.outsourceindia.com

7. www.tutorialreports.com

8. www.dataquest.com

9. www.outsourcingprofessional.com

10. www.google.co.in

11. www.wikipedia.com

12. www.chillibreeze.com

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This is to certify that Mr. BIKKY SHAW student of B.com (Honours) in Accounting & Finance of Acharya Girish Chandra College under the University of Calcutta has worked under my supervision and guidance for his project work and prepared a Project Report with the title “Business Processing Outsource (BPO).”

The project which he is submitting is his genuine and original work to the best of my knowledge.

Place: Kolkata Name: Prof. Basudeb Sahukhan.

Date: Designation:

Supervisor’s Certificate

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Student’s Declaration

I hereby declare that the Project Work with the title “Business Processing Outsource (BPO)” submitted by me for partial fulfillment of the degree of B.Com (Honours) in Accountancy & Finance under the University of Calcutta is my original work and has not been submitted earlier to any other University for the fulfillment of the requirement for any course of study.

I also declare that no chapter of this manuscript in whole or in part has been incorporated in this report from any earlier work done by others or by me. However, extracts of any literature which has been used for this report has been duly acknowledged providing details of such literature in the references.

Place: KOLKATA Bikky Shaw

Date: 30, K.P Saha Street, Kolkata – 28

Registration No.: 141-1121-0093-10

Roll No.: 1141-61-0056