Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific

business functions (or processes) to a third-party service provider. Originally, this was associated with manufacturing firms. In the contemporary context, it is primarily used to refer to the outsourcing of business processing services to an outside firm, replacing in-house services with labor from an outside firm. BPO is typically categorized into back office outsourcing - which includes internal business functions such as human resources or finance and accounting, and front office outsourcing - which includes customer-related services such as contact centre services. BPO that is contracted outside a company's country is called offshore outsourcing. BPO that is contracted to a company's neighboring (or nearby) country is called nearshore outsourcing.

Sectors:

Telecom Industry This past summer, research firm IDC said the overall telecom sector will lead all other verticals in outsourcing engagements, predicting a 10.7 percent compound annual growth rate (CAGR). A review of the latest trends in telecommunications-related outsourcing suggests that mid-sized telecom providers and IT firms that outsource service offerings stand to gain significant market share in the coming months as they continue carving out niches in an exploding market.

Technology Industry Information technology outsourcing or ITO is a company's outsourcing of computer or Internet related work, such as programming, to other companies. It is used in reference to business process outsourcing or BPO, which is the outsourcing of the work that does not require much of technical skills. The recent downturn in IT and software employment may continue even as the economy improves. Global providers of IT services, especially in India, are poised to permanently capture a large share of IT service and labor. In many ways the international

outsourcing of IT services and software development is beginning to resemble the pattern of the U.S.automobile industry during the latter part of the 20 century. U.S. IT education and business leaders need to study and respond accordingly to this global challenge.
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Banking/Financial services Large BPOs like WNS and Genpact traditionally catering to the international market are focusing on building their domestic BPO divisions. We have classified the vendor landscape in the domestic banking BPO into four categories:

International leaders (established BPO vendors with strong presence in international BPO market like MphasiS)

India leaders (primarily focused on domestic market like Aegis, InfoVision and Omnia BPO) Emerging companies (companies building capabilities and currently offering specialized services on a small scale like Caretel, vCustomer)

'Me-too players (offering undifferentiated low value services) Financial services businesses throughout the world are increasingly using third parties to carry out activities that the businesses themselves would normally have undertaken. Industry research and surveys by regulators show financial firms outsourcing significant parts of their regulated and unregulated activities. These outsourcing arrangements are also becoming increasingly complex. Outsourcing has the potential to transfer risk, management and compliance to third parties who may not be regulated, and who may operate offshore

Insurance Industry Insurance companies have traditionally been among the slowest adopters of outsourcing/off shoring.However shrinking margins, higher claims disbursement and increasing competition in recent years, especially post 9/11, have forced insurance companies to look at outsourcing/off shoring to improve efficiency and channelise resources towards the core functions of product development and

innovation. The size of the insurance industry, with over 1500 P&C insurance companies and 1300 health insurance companies in the US alone makes insurance outsourcing an attractive market. Success of the early adopters will determine future growth rates. Several niche providers with relevant domain expertise are emerging and encouraging insurance companies to outsource more value-added services. Some of the key drivers of insurance off shoring include: Cost saving Focus on core processes Speed to market Technology risk Better quality through specialized services Deregulation of insurance markets Availability of credible service providers Minimizing risk through multiple delivery locations

E-commerce & Retail Industry internet, with its ability to reach a larger number of potential customers at a fairly low cost, has become a powerful tool for the retail industry. Realizing the potential of the internet and its comparative advantages over traditional means has led many companies to retail products and services online. Convenience, ease of use, larger variety and cheaper prices are some of the reasons why customers are turning to the internet to shop. The popularity of online retailing is mainly due to its speed and ease of use. Retailing products and services online has enables retailers to reach out to a global customer base and increase their profits. The growth and advancements in technology have enabled retail companies to easily and effectively automate their business processes. Automation improves transactional efficiency of processes, speeds up business-to-business communication and significantly reduces operating costs. Our solutions enable retailers to improve their services and operations.

Industrial Sector The manufacturing industry has relied on outsourcing to increase its profitability and cut costs. Manufacturers are willing to spend money in order to save money, thus directing greater resources towards outsourcing. When implemented correctly, a procurement system can save a company a lot of capital, time as well as streamline work force. These systems are especially useful to large manufacturers that spend lump sums on purchasing services and goods for their business. A combination of our industry-leading research and analysis with an extensive consulting experience, the ValueNotes Sourcing Practice offers buyers and sellers of manufacturing outsourcing services research that:

* Allows for better understanding of the business environment * Forms the basis for actionable insights for internal or external strategy * Aligns offerings and services with end consumers * Can be leveraged to create research backed marketing communique

Different Types of Services Being Offered By BPO's Customer Support Services Technical Support Services Telemarketing Services Employee IT Help-desk Services Insurance Processing Data Entry Services / Data Processing Services Data Conversion Services Form Processing Services Internet / Online / Web Research

Why India is more preferable English speaking population

Educated technically skilled employees (large no. of graduates, engineers) Telecom facilities. Favorite govt. policies Lower wages (cost reduction up to 50% ) Suitable & large human resources Well positioned with IT-enabled services Conductive environment Large unemployment rate.

Knowledge process outsourcing (KPO) is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost. Unlike the outsourcing of manufacturing, this typically involves high-value work carried out by highly skilled staff. KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisionstypically those that are easily undone if they conflict with higher-level business plans KPO services include the following:

Investment research services (equity, fixed income and credit, and quantitative research) Business research services Data Analytics Market research services Valuation and fairness opinions Legal process outsourcing Patent research services Business operations support, analytics & management

Editorial process outsourcing

Leaders in the market research industry are slowly seeing the benefits offered by KPO and have begun outsourcing. Comprehensive IT solutions are offered by vendors who provide solutions covering the entire life cycle of a market research project. Smaller firms can also benefit from these solutions as they are cost effective and remain within the budget of smaller organizations.

KPO is claimed to efficiently increase productivity and increase cost savings in the area of market research. Advocates claim that the trend is likely to prove increasingly popular in the global market research industry

Opportunity Class MBAs Engineering / MBA combinations Chartered Accountant / Financial Analyst Lawyers, Doctors Economists Architects/ Civil engineers Educationists, PhDs Biotechnologists Statisticians

And a Day (9-5) Job, unlike IT and ITES What will Drive KPO in India? 1. Education

2. Ability to deliver High quality Lateral Knowledge / Decisions 3. Confidence building with Customers Abundance of educated professionals doctors, lawyers, chemical engineers , finance professionals, chartered accountant , PhD India has a huge pool of English speaking and computer literate person power and is growing Worlds largest number of scientific and technological personnel after USA In India , six times more people go to universities than in China

220 universities, 10000 colleges , 330,000 teachers and 3,000,000 Graduates every year . Medium of instruction is English in 50% of universities Other promising locations Russia , China etc. though only 1/6 people go to universities in China

KPO AND BPO STATISTICS

Market Share: BPO and ITes Contributes 7% to GDP The global BPO Industry is 120-150 billion dollars Indian BPO is US $11.4billion. 824 call centers in India. Expectations of $30 billion by 2012. Around 6,00,000 people employed, about the same as IT industry but Its growing faster.

Indian BPO players are ranked top global players in every single segment because they invest massively in training, quality assurance, productivity improvement and information security