International Outsourcing Consultants

Business Process Outsourcing

What is BPO?

Business Process Outsourcing is the long-term contracting of non-core business processes to an outside provider who, in turn, owns, administrates, and manages the selected process(es), based upon defined and measurable performance metrics to achieve increased shareholder value.

Why Now?

In the eighties and nineties the manufacturing jobs moved from high-labor cost countries like the USA, Canada, U.K, to low-labor cost countries like China, Taiwan, Korea and India. As technology continues to advance, services have started to follow manufacturing to be located in centers of lower labor cost. During mid-nineties computer programming jobs started moving to countries like India. Forward looking Fortune 100 companies like GE, Oracle and TI set up Indian operations and flourished. For example, GE is doing more than 30% of their IT development from India. During this same time frame it was not feasible to do BPO operations because the infrastructure cost and the telecommunication costs were too high and offset the benefit of low labor cost. But in the past 5 years the cost of hardware and the telecommunication cost came down so much that it makes sense to move BPO operations to countries like India.

Why India?

There are only very few countries in the world where you can find a large good English speaking population. To name a few, India, Philippines, Singapore and Malaysia. Of all these countries the labor cost is the lowest in India, and the pool of available qualified people is significantly higher in India. A.T. Kearney, a global management consulting firm, believes that determining the optimum offshore location requires assessing a myriad of critical factors, ranging from labor costs to political stability. Using a proprietary scoring methodology, A.T. Kearney ranks India as the preferred country overall for offshore business processing.

BPO Success Stories in India

•          There are many Fortune 1000 companies who have established direct presence in India

•          There are over 250 medium to big size companies outsourcing their back office jobs to India

•          The medium to big size companies prefer to partner with a BPO service provider.

•          Over 40% of the outsourcing partnerships are with Bangalore based service providers

What services?

Some examples of BPO services that are currently done in India are:  

a.     Tax accounting

b.     Bookkeeping

c.     Accounts Payable

d.     Accounts receivable

e.     Payroll processing

f.      HR management

g.     Medical billing

h.     Medical transcription

i.      Litigation assistance

j.      Back office processing for Banks and other financial institutions

k.     Customer service

l.      Pre-sales and marketing including lead generation.

m.    Mutual Fund accounting, customer service, etc.

n.     Tele-marketing for mortgage industry, including refinancing.

o.     Marketing and sales for hospitality industry including customer service.