High performance in the retail industry through outsourcing

It is obviously the dramatic cost savings and the enhanced focus on core competencies facilitated by the BPO companies that attract the consumer goods and retail companies towards it. However any serious concerns related to outsourcing should address common concerns like the common belief that outsourcing entails a loss of in-house expertise. The argument goes that since the process is outsourced to an external service provider, there will be a reduction in process expertise and capability as a result.

 However companies with many years of experience in outsourcing have strongly voted against the belief by proving that gains rather than loses in functional expertise leading to higher business performance has been seen. Most of the retail companies operate in a competitive market where fluctuations are sudden, systems are complex, thin margins and handiness is mandatory. In such a scenario only a rare enterprise can stand against the tide and afford any loss even if it is only for a brief period. Hence companies prefer outsourcing to promote process excellence as it reduces costs.

Many companies who have partnered with the BPO companies have admitted that they have noticed significant levels of expertise equal to or often greater than those enjoyed prior to outsourcing. The impact of outsourcing on innovation, key skills, and access to cutting edge technology and tools for managing a process has been prominent and profitable. Many surveys conducted on this subject matter have produced results favorable to the BPO service providers. The bottom line is that most of the companies achieve high performance through effective outsourcing partnerships.

How to know the data confidentiality at outsourcing centers?

In the financial service industry many companies are skeptical about the security of their data while outsourcing. The uncertainty cannot be belittled since data confidentiality and security is of prime importance particularly for regulated entities in the financial service sector. Hence it becomes mandatory for the buyers of outsourcing services to closely examine the physical and information technology security, as well as data confidentiality processes maintained by the BPO companies.

The basic thing that comply the security and safety is infrastructure. Companies should look for secure and controlled data center environment with fire suppression, emergency power supply, cooling and building security. Also they need to know what all procedures need to be undergone by the personnel to enter the data centers. The place needs to have video surveillance that will be properly monitored. Moreover there should be no rights to privacy policy in place for processing sites and data centers.

Coming to the data security within the process, the companies should make sure that only authorized users have access to the data. Moreover the BPO Company should necessarily be certified and independently audited. The authenticity of the data confidentiality implied by the outsourcing service provider can be checked by knowing the measures used to secure data transfers between all related parties and also the presence of a secure processing environment.

Outsourcing soon to enter the public sector

The waves of offshore outsourcing have been hitting the commercial as well as public sector in many countries. Even though it has been relatively prominent in the commercial sector, it has started entering some limited zones in the public sector. The public sector has been in the need for services that will enhance efficiency and enable cost reduction. These perks have already been delivered by the BPO industry. Hence there is more temptation to outsource the public sector jobs to offshore locations.

The offshore outsourcing has already been used extensively in the US commercial sector particularly in Insurance and Financial sector. Kobayashi-Hillary, an advisor on globalization points out that the Australian, Philippines and Canadian government have been sending works to India. Even though the UK government has not directly outsourced the works, many offshore locations deliver parts of wider contracts, he says. It has been seen that the administration and data entry processes of a finance and accounting firm jointly owned by the UK department for health has been outsourced to India.Application development, application management and noncore administrative process like data entry jobs are largely outsourced to India. 

In the whole, the offshore market is expanding with the delivery model expanding into new territories to deliver to new geographical locations. With the introduction of cloud computing, where the end result is provided as a service over the internet, offshore outsourcing is no more a concern for many companies. As long as the service is delivered as expected, clients are not concerned about the location from which it comes.

Back office services are safe in BPO companies’ hands

 

Outsourcing of back office services have become one of the major sectors in the BPO industry. Basically companies rely on the BPO service providers for managing specific and not so crucial office tasks. Back office services outsourcing gained momentum with the newly emerged management trends and with the success of outsourcing in various other sectors. According to the field of services the back office works are being outsourced. Financial and accounting services, bookkeeping service, customer care and support, call center, email support, web research services are often given in the hands of BPO companies at various geographical locations.

As the BPO companies deliver efficient results, the field of services of back office operations is expanding. Hence many companies are seeking support from the outsourcing companies. The main advantage is that the outsourcing of back end operations reduces the working costs and help to achieve competence at reasonable prices. Since man power is available at lesser costs in the outsourcing locations, efficient services are ensured at low costs. This is reason why many multinational companies outsource their back office services to India. Moreover the companies can also save some quality time and utilize it for other process as they outsource less important work.        

As the offshore outsourcing companies have creative talent pools, they are efficient in delivering smart back office services using innovative business processing methods. Furthermore, certain operating methods are automated with software tools. In that way the BPO companies carry out the work by reduced man power and labor costs.

Rapid change sweeps over Finance BPO sector

The good news is that the number of finance BPO services being signed is increasing at a rapid rate of around 30% (Deloitte Consulting Outsourcing Advisory Services Analysis). And furthermore, the highlight of the advancement is that not only the FORTUNE 100 brands are holding the torch but the smaller companies have started moving down the path. Even though the growth has been expected, there are certain key factors contributing to the accelerating rate of finance BPO services.

Analysts suggest that the emergence of the middle market have contributed largely to the growth rate of finance BPO engagements. Strong bonds of contracts have been established as a result of increasing proportion of mid size projects taking place. The trend is expected to continue for the following years which would enhance the BPO sector. 

Now the second factor contributing to the success of the BPO sector can be the shift to on-sourcing and off shoring. Many large companies with a firm ground in the BPO sector have been adopting small scope establishments to enhance their sourcing mix. Moreover the rapidly growing off shoring industry has become a commodity and the operations are handed over to small scale service providers. 

Thirdly many companies have been adapting the volume based pricing in the way in which the finance BPO contracts are priced. Following the labor arbitrage in the sector, many service providers are moving towards gain sharing. This means the suppliers are pricing for the services based on variable inputs like transaction volumes. Also in this way, the provider gets the profit from the gains accumulated from the efficiencies achieved.

BPO insurance services: India to rule the roost

 

Initially the insurance companies have been more conservative in their attitude towards business process outsourcing. Particularly in offshore outsourcing, the insurance industry has been lagging behind. The main reason behind this hiccups were the myriad challenges arising from the intense competition, rising regulatory compliance and growing payouts due to scams and natural disasters. However, owing to competitive pressures the BPO insurance services will flourish in the coming years.

 The insurance industry is poised for significant growth in the next three to four years. The banking and financial services had been adapting the outsourcing services lately and insurance industry had also been in the scenario for some years. With expected cost savings and other significant advantages like focusing on core competencies and access to skilled labor, the insurance sector would soon set the foot firmly on business process outsourcing.

According to analysts, the Indian revenues from offshore insurance BPO services were expected to rise from $690 million in 2006 to about $2 billion by the end of 2010 (Valuenotes database). And this rise of income would in turn increase the employment rate from 41, 600 in 2006 to 100,500 in 2010. The BPO insurance industry is poised for higher growth than it has witnessed so far. This is mainly triggered by the need to reduce costs and differentiate products in an increasingly competitive environment.

A major part of the current offshore business in India is generated from insurance carriers in US and the rest comes from UK and Europe. The UK and Europe share are expected to increase thereby initiating business from the area. Moreover in India itself many of the domestic insurance companies have begun to outsource which would surely accelerate the competition globally.

Creativity takes a turn in BPO sector

Creativity is the new buzz in the business process outsourcing industry. Various industrial sectors are opting for BPO to fulfill the business requirements.The BPO firms were focusing on sectors like finance, insurance, HR and data management and has been tremendously successful. Considering the benefits attained through the outsourcing services, different business sectors are shifting their focus towards BPO services.

The introduction of innovative ideas is mostly seen in the call center scenario with enterprises related to advertising, multimedia, animation and so on. In the computer gaming industry, tremendous growth has been seen with them being an indispensable part of children’s life. The task of developing exclusive gaming contents has been outsourced. The same is the case with the production work of the animation films.

Most of the gaming firms in the western countries outsource their projects on a constant basis to the BPOs. There are many benefits like the outsourcing firms having the right infrastructure and also the rates are very cheap. The demand for BPO service is just expanding over a large number of domains which are related to the creative aspects. What the businesses seek is high end manufacturing services at highly affordable costs.

The BPOs are famous for their commitment in work, quality and also timely delivery of services. Since outsourcing in the insurance, banking and HR sectors have contributed to a major part of the revenue; many leading BPO companies are focusing on adapting creative changes in their strategies thereby initiating more business.

BPO industry is no more under the shadow

Business process outsourcing is no more considered as a side kick of any enterprise as the businesses have realized that the outsourcing is a critical sector that requires specialization in various domains. From being a mere subsidiary of some established ventures involving call centers or support centers, BPO in India have evolved to be a business model in itself.

The BPO sector in India is booming with findings reflecting that the nation contribute to a substantial amount of share in the overall worldwide BPO industry. It has also been expected that the total export of BPO services will grow drastically in the coming years. Here the domestic BPO market is in the limelight as it indicates tremendous growth rate over the years.

What is more innovative is that the industry is undergoing transformation and the organizations are moving way from being the mere back offices to business partners to the clients and even clients are encouraging this transformation waves. The transformation is not only in the business but also in the mindset of the employees joining the firm. The BPO sector is not a fun place anymore and people are opting for long term career option than considering it as a stepping stone. This trend is prominent in the knowledge process outsourcing like the medical transcription.

Initially the banking, insurance and financial services were the flagship of the business process outsourcing industry as they contributed to majority part of the revenues. However in the coming years, the focus would be shifted towards delivering innovation and business outcomes.