BPO Industry in India

Tapesh Kr. Dube

Sourab Singh Yadav
Rajanish Kumar
Jeetesh Kumar
Kumar Sachin Deo

06/02/10
Introduction
 Business process outsourcing (BPO) is a broad
term referring to outsourcing in all fields.

 BPO is an organization entering into a contract

with another organization to operate and manage
one or more of its business processes.

 Business Process Outsourcing is the delegation of

one or more IT-intensive or other business
processes.

 BPO is one of the fastest growing segments of the

Information Technology Enabled Services (ITES)
industry.
Why Choose Outsourcing?
Reasons include:
 Lower costs (or lower total costs). Sometimes
achieved through lower wages costs, but also through
economies of scale by providing the same service to
multiple companies.
 Improve service. Often, better educated or skilled
people perform the task, and thus perform it better.
 Obtain expert skills. An outsource firm is an expert
in that particular activity, and thus should be able to do
it better than the customer.
 Improve processes. Given that outsourcers are very
experienced at a particular set of processes, they can
help the customer to improve their processes.
 Improve focus on core activities. Outsourcing frees
management from having to worry about the inner-
workings of a non-core activity.
Different Types of Services Being
Offered By BPO's
1. Customer Support Services

2. Technical Support Services

3. Telemarketing Services

4. Employee IT Help-desk Services

5. Insurance Processing
 CONT…
6.Data Entry Services / Data Processing
Services
7. Data Conversion Services

8. Book Keeping and Accounting Services

9. Form Processing Services

10. Internet / Online / Web Research

Challenges to the BPO industry
1. High employee turn over(35%).
2. Global financial crisis.
3. The 'International' Issue
4. Emergence of competitors.
While South Africa, Egypt and Mexico are emerging
as alternative destinations for off shoring, the
Chinese and Vietnamese governments continue to
attract foreign investors and build advance
infrastructure, putting pressure on mature offshore
countries such as India.
5. Lack of specific training institute.
Few of the motivation factors :
 Cost Factor
Call Centre Employee cost
Advantage
Country Cost (USD/yr)

 Business Risk USA 19,000

Mitigation Australia 17,000

Philippines 9,050

India 9,500
 Superior Competency

 Utilization
Improvement
 Domestic Indian BPO Industry --
 Supplier-Side Assessment
– Domestic Indian BPO Industry has seen a spurt in the
recent years growing at a 33 %.
– The Domestic Indian BPO industry grew from a USD
660 Million to a USD 1.18 Billion industry in last 5years.
– EBIT margins for domestic BPO stood at a double
digit Percent figure
– Billing rates are less compared to offshore segment
– Most Indian BPOs (specially call centres) are
engaged throughout the night hours (for offshore
clients), leaving the facility empty for the day.
-This enabled them to be leveraged during the day
for domestic markets in India
 Demand Side Assessment
– Financial, banking, and telecom companies are
leading the domestic BPO wave:
-Telecom majors- almost all major mobile & landline
telephony provide
 Indian BPO industry has largely been concentrated in and
around the metropolitan areas such as NCR, Mumbai,
Bangalore etc

Kolkatta 2%
Chennai 8%

NCR
NCR
Hyderabad
11%
25% OTHERS
BANGLORE
Mumbai MUMBAI
15%
Others HYDERABAD
25%
CHENNAI
Bangalore KOLKATA
16%

Source: “Nasscom KPMG Study”

Global BPO Market by Industry

Industry Percentage (%)

Information Technology 43

Financial Services 17

Communication (Telecom) 16

Consumer Goods/ Services 15

Manufacturing 9
Top 10 BPO Companies of India

1. Tata Consultancy Services

2. WNS
3. Wipro
4. Infosys
5. Firstsource(ICICI)
6. Accenture
7. ABN-AMRO
8. American Express
9. AOL Online Member Services
10. Bank of America
OTHER MAJOR INDIAN COMPANIES
 #1. Daksh eServices (IBM) Services include
services include Customer Care, Technical
Support, Collections, Transaction Processes etc.
5 centres in india(4 in NCR & 1 in mumbai)
 #2. ISeva
 #3. Efunds International
 #4. Hinduja TMT
 #5. EXL Services
 #6. Ajuba
 #7. Motif
 #8. NIIT SmartServe
 #10. HCL-Tech BPO
International BPO Industry

 In 2009 the global information technology and business

process outsourcing market was with total revenues of
$373 billion, which was 14.4 per cent higher than the
$326 billion recorded in 2008.
 Global BPO market to will hit US$450B by 2012.
 India would have 44.8 per cent of the total outsourcing
pie and China 25.9 per cent, according to Canadian-
based ICT research and advisory firm XMG Global.
 The emerging economies of Asia and Latin America will
ride the crest of this wave, housing support functions
such as finance and accounting services, and benefiting
from the relocation of existing shared services centers.
 Seven Chinese cities - Shanghai, Beijing, Shenzhen,
Dalian, Guangzhou, Chengdu and Tianjin.
How to Choose an Outsourcing
vendor?
Experts point to the importance of investigating
vendors thoroughly before signing any contracts.
They recommend requesting documentation and
other information to substantiate strengths,
experience, and success in the following areas:

Financial stability
To withstand the fluctuation of the current economy
the provider should be well-funded and have a wide
client base across which to spread costs.
Organizations should ask themselves, "Is there a
chance this company will close its doors within the
next two years due to lack of capital?"

Years in business
A provider with several years experience in the
particular business offers valuable experience and
stability.
CONT………

HR
This is the most important part of analysis.
one should analyse whole set of work force
matching with work to be outsourced.
Customers
While investigating, organizations should
ask how long the average client relationship
has lasted and ask for comments from
existing customers regarding the services
provided.
Reputation
Clients may take note of comments from
third parties, such as analysts and industry
trade writers. However, this should not
replace a thorough, in-person investigation.
NEWS
 HCL BPO to hire 300 more for media unit
(January 22, 2010)
 Epi Source India, the Chennai-based business
and knowledge process outsourcing company
(KPO), is planning to build its workforce
capabilities by tapping available talent in Tier-II
and Tier-III cities and rural areas in Tamilnadu.
(Feb 13, 2010 )

 BPO major Genpact announced has bagged a 10-

year contract from US drugstore chain Walgreens
for providing accounting services. (Jan 08, 2010)
 BSNL to outsource customer-care to BPOs (June
18, 2009)
 NASSCOM
(National Association of Software and Services Companies )

•NASSCOM is a not-for-profit organization, was set up in

1988 to facilitate business and trade in software and services
and to encourage advancement of research in software
technology.
•It’s headquarter is in New Delhi, with regional offices in the
cities of Mumbai, Chennai, Hyderabad, Bangalore, Pune and
Kolkata.
•NASSCOM's Vision is to maintain Indian leadership position
in the global offshore IT-BPO industry, to grow the market
by enabling industry to tap into emerging opportunity areas
and to strengthen the domestic market in India.
•NASSCOM’s members are primarily companies run by
Indian nationals in the business of software development,
software services, and IT-enabled/BPO services.
• NASSCOM is the global trade body with over 1200
members, of which over 250 are global companies from the
US, UK, EU, Japan and China.
THANK YOU