Bpos In India Essay

The BPO Industry in India

In India, Business Process Outsourcing (BPO) is the fastest growing segment of the ITES (Information Technology Enabled Services) industry. Factors such as economy of scale, business risk mitigation, cost advantage, utilization improvement and superior competency have all lead to the growth of the Indian BPO industry. Business process outsourcing in India, which started around the mid-90s, has now grown by leaps and bounds.

India is now the world's favored market for BPO companies, among other competitors, such as, Australia, China, Philippines and Ireland. The BPO boom in India is credited to cheap labor costs and India's huge talent pool of skilled, English-speaking professionals. Research by the National Association of Software Services and Companies (NASSCOM) has revealed that quality orientation among leading BPO companies, 24/7 services, India's unique geographic location and the investor friendly tax structure in India have all made the BPO industry in India very popular.

What is business process outsourcing?

The term Business Process Outsourcing or BPO as it is popularly known, refers to outsourcing in all fields. A BPO service provider usually administers and manages a particular business process for another company. BPOs either use new technology or apply an existing technology in a new way to improve a particular business process. India is currently the number one destination for business process outsourcing, as most companies in the US and UK outsource IT-related business processes to Indian service providers.

Services offered by Indian BPO companies

Indian BPO companies offer varied services, such as, customer support, technical support, telemarketing, insurance processing, data processing, forms processing, bookkeeping and internet / online / web research.

  1. Customer support services: 24/7 inbound / outbound call center services that address customer queries and concerns through phone, email and live chat.
  2. Technical support services: Installation, product support, running support, troubleshooting, usage support and problem resolution for computer software, hardware, peripherals and internet infrastructure.
  3. Telemarketing services: Interacting with potential customers and creating interest for the customer's services/ products. Up-selling, promoting and cross selling to existing customers and completing online sales processes.
  4. IT help desk services: Level 1 and 2 multi-channel support, system problem resolutions, technical problem resolution, office productivity tools support, answering product usage queries and performing remote diagnostics.
  5. Insurance processing: New business acquisition and promotion, claims processing, policy maintenance and policy management.
  6. Data entry and data processing: Data entry from paper, books, images, e-books, yellow pages, web sites, business cards, printed documents, software applications, receipts, bills, catalogs and mailing lists.
  7. Data conversion services: Data conversion for databases, word processors, spreadsheets and software applications. Data conversion of raw data into PDF, HTML, Word or Acrobat formats.
  8. Bookkeeping and accounting services: Maintenance of the customer's general ledger, accounts receivables, accounts payables, financial statements, bank reconciliations and assets / equipment ledgers.
  9. Form processing services: Online form processing, payroll processing, medical billing, insurance claim forms processing and medical forms processing.
  10. Online research: Internet search, product research, market research, surveys, analysis, web research and mailing list research.

Interesting facts about the Indian BPO industry

  • The BPO sector in India is estimated to have reached a 54 per cent growth in revenue
  • The demand for Indian BPO services has been growing at an annual growth rate of 50%
  • The BPO industry in India has provided jobs for over 74,400 Indians. This number is continuing to grow on a yearly basis. The Indian BPO sector is soon to employ over 1.1 million Indians
  • 70% of India's BPO industry's revenue is from contact centers, 20% from data entry work and the remaining 10% from information technology related work
  • Indian BPOs handle 56% of the world's business process outsourcing

The top fifteen BPO companies in India

NASSCOM recently conducted a survey and evaluated the leading BPO service providers across India. The top fifteen business process outsourcing companies in India are:

  • WNS Group
  • Wipro Spectramind
  • Daksh e-Services
  • Convergys
  • HCL Technologiess
  • Zenta
  • First Source
  • MphasiS
  • EXL
  • Tracmail
  • GTL Ltd
  • vCustomer
  • HTMT
  • 24/7 Customer
  • Sutherland Technologies

Outsource your BPO work to India

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The Future of BPO (Business Process Outsourcing) in India

India has emerged as a hot destination for BPO work in recent years. The success is mainly due to the fact that there is a ready availability of large numbers of resources fluent in English and the diligent and hardworking efforts put in by the companies in India that do BPO work. Further, the fact that Indians are well educated (by Asian standards) and that there is a humungous body of resources who have graduated in commerce and technology has meant that the BPO story took off in right earnest in India. Added to this is the fact that the demographics favor India since a majority of its population is young and under 30. This is the so-called demographic dividend wherein a country that is youthful reaps the fruits of having a labor force which can be tapped into. All these reasons have conspired to bring about a revolution in the way the Indian BPO sector has performed.

However, things are not all that hunky dory since many other countries in Asia seem to be playing catch-up with Philippines emerging as a viable alternative to India. One of the reasons for the completion is that the wage differential that India had over the West is eroding since the industry is maturing and hence wages of the workforce are going up.

This means that other low cost rivals like the Philippines can tap into the advantage that India hitherto had. Further, there is a certain level of saturation that has set in India with the law of diminishing returns coming into play. These factors mean that India has to watch out for competition from other countries. Of course, there are certain steps that can be taken to arrest the decline and ward off the competition.

For instance, Indian BPO companies can branch out into Tier II and Tier III cities so that their wages are competitive and that a skilled workforce that exists beyond the cities can be tapped into. Moreover, the costs can be kept down because of the fact that these cities have a lower cost of living and doing business than the Tier I cities. The most important step is that Indian BPO companies can move up the “value chain” which means that they can migrate to higher end knowledge work or KPO which is more cerebral and pays well. The point here is that it is time for the Indian BPO industry to take the phenomenon to another level and this is precisely the reason for many Indian BPO’s to take up KPO work as well as opening centers in smaller cities.

Finally, the Indian BPO industry has to realize that once the industry matures, profit margins and return on investment stagnate and reach a plateau. It is for this reason that the time is ripe for the Indian BPO sector to innovate and move up the curve. With other nations snapping at its heels, the Indian BPO sector cannot afford to take it easy nor be complacent.

Authorship/Referencing - About the Author(s)

The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.

Business Process Outsourcing


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