Outsourcing: the meaning within

Entrepreneurship is the back bone of any economy and with the current shrinking of the entire system there has been a lack of it prominently. Even though there are many businesses that are the foundation of what makes our country work, but it's the small business owner that keeps the economy growing. Back office Outsourcing is one of the answers to many economic growth problems but no one wants to hear about it.

Small businesses are the backbone of the economy and make up a majority of the country's income. Mostly due to lack of skilled work or not enough work to support a larger staff, small companies can't handle all of the work that needs doing. Many businesses that need work can't sustain long contracts with other companies so they use them on a case-by-case basis. Back office outsourcing companies come into the picture when the small companies can't handle large salaries for many employees and also they become unsure of a consistent clientele. For attaining success, the best choices should be made in the company model and business analytics. And offshore outsourcing services are just a means to that end. 

People are usually sceptical about the BPO jobs that they believe that outsourcing jobs to other countries means job loss in their country. But that is completely false. Usually the small businesses can’t afford what it takes to support many workers in the first world countries with a higher standard of living. If you can't get the job done with local workers, then look towards outsourcing to get five times of the original work done for almost half the price. Sometimes BPO services simply mean that a business is expanding their services through outsourcing, which will mean greater opportunity for the host country and its economy.

Outsourcing is not synonym to loss of job opportunities. It often means that the work is being contracted out to an agency or service provider. It's a way for a business to get the job done without having to create entire departments, which ends up saving a company millions and keeps them in operation.

Outsourcing content management work

What is the use of good, clean and relevant content in your website? With good website content you get the benefit of clearly depicting what it is you want to share with people. Also, good content and articles will lead people to your site. With more traffic, you get to earn more from your site making it profitable. A sites success, be it for profit or not, is the number of the flow of traffic to your site. The best part with good articles is that they get you lots of traffic since search engines entirely depend on keyword phrases and single keywords to determine the relevancy and based on that information the article is placed in the search results. Hence it become necessary to have well written articles that has the keywords properly placed.

Many companies depend on BPO who serving the content writing sector as they don’t have the time to write their own content.  There are many outsourcing companies doing the content writing task and the writers are experts in this style of writing and can greatly help your website to get that coveted spot in the search engine rankings. There are many BPO services in India that offer you their writing services with their team of well trained and experienced writers. They offer writing services for almost every niche possible in order to cover any writing needs.

The offshore outsourcing services companies in India would probably be the best since they have done a good job of keeping their content at a high quality to get them high rankings. But it is also good to search for as many companies as possible and read some of their sample work to get an idea of how much it will cost you.

Companies return to growth after the high tides

According to IT research firm the return of growth has been accompanied by a strong appetite to increase spending on BPO projects. A survey of 600 mid-to-large companies in 14 countries found 54% of the respondents looking to increase their BPO spending this year by 5% or more.Out of this, 20% (of the total surveyed companies) were planning to increase their BPO budgets by 10% or more this year, reflecting at the return of growth. Most companies had put big projects, whether in BPO or IT outsourcing, on hold during the recession."Many of these budget increases are driven by the fact that BPM is focused on improving business outcomes and explicitly meets the objectives of many organisations' return-to-growth strategies,” says the expert.

The results are good news for  BPO companies in India and Filipino -- the two strongest players in the international BPO market. offshore outsourcing services refers to the handing over of activities such as handing customer queries and even making sales calls to specialist companies.BPO companies in India is arguably one of the biggest sources of employment for India's millions of graduates.The "return to growth" trend was stronger in Asia Pacific, where 25 percent of respondents were planning to hike their BPO outlay by more than 10%, compared to the 20% for the World as a whole.The numbers are more aggressive than corresponding figures for the IT outsourcing market, partly because companies see outsourced service providers as more crucial to their business expansion than IT.

"BPM project funding comes not from an IT budget but from the line of business budget in 66 percent of cases, and because BPM is focused on business outcomes, many business units are funding it more readily than they are IT-specific projects," expert pointed out.

BPO favours Telecom industry

Most of the businesses have now started depending on the outsourcing phenomenon in order to succeed in their business. And hence back office outsourcing has become the new key in the present world to expand your business. This trend is reflecting in almost all sectors like banking, insurance, retail etc. Amongst all the businesses profiting from the services provided by outsourcing, telecom industry is one. According to estimates, almost 75% of the telecom business companies have already taken to outsourcing.

In the process of making any major financial or technological policy, outsourcing is a major player. This fact has been unanimously accepted by the telecom executives worldwide. Apart from the fact that outsourcing certain business processes is convenient to the company, it is also true that telecom companies save a lot of money by following this suit. This is very relevant on the network management where half of the finances within a telecom industry are spent. Other segments that require a lot of time and finances include customer care, billing, recruitments etc. With the advent of Business Process Outsourcing (BPO) though, the telecom industries can easily outsource the above mentioned services and processes.

With the major processes outsourced, the telecom companies are then better able to utilize their time and management by focusing into expansion and other company policies aiming at expanding their customer base. This is particularly applicable to telecom industries based in the first world nations or developed nations, where work force is extremely costly. Hence outsourcing their business processes to BPO service providers ensure that all their customers get complete and proper attention, hence assuring a loyal customer base. Then again, outsourcing also ensures that these companies get the latest of technological aid, which would have come extremely costly if the company had decided to do it themselves.

Low cost in BPO sector appeals globally

India has been a subject for study in almost all industries and sectors across the world. And when it comes to BPO industry, the country has always ruled the roost. It has shown a strong withstand against the rising tide of global recession and surpassed the whirlwinds efficiently. According to a recent study, India's prowess as a low-cost business process outsourcing (BPO) hub continues to attract investors across the globe despite the regulatory issues in the country. The survey has thrown light at the current scenario in India and clearly establishes the country as one of the leading economies where foreign capital will flow into in the coming years. In addition to the overall strong macro-economic fundamentals, India's navigation of the economic downturn over the last couple of years has been strong and steady.

According to Nasscom, India's IT and BPO exports jumped 18.7 per cent during fiscal 2011 to $59 billion. It now accounts for 26 per cent of India's overall exports and 11 per cent of services revenue. Within the high-tech export basket, IT services grew faster (22.7 per cent) than BPO (14 per cent). The software and services export revenue is slated to grow 16-18 per cent during the current financial year to $68-70 billion. The decline in capital intensity of inward investment resulted from strong competition for investment projects and investment pattern diversification, the report said.

Mergers and acquisitons take its toll in BPO industry

The Indian BPO industry is seeing a spurt of merger and acquisition activities and this shows immense growth of the setcor in the coming years. The BPO veterans are to add more capabilities and are looking at acquisitions to widen their scope of offerings. The cleint base is really strong in most of the BPO companies and with the presence of the mother company across the world, the BPO clients are only a small percentage of that. The business process outsourcing companies continue to have huge headroom in growing with those customers and at the same time they are looking for opportunities. More and more companies are looking for acquisitions and of course the price has to be right.

There has been drastic benefit and oppotunity with the mergers and acquisitons. The companies are definitely looking into all those options. Their argusing point is that when they get so much enamour with the idea with going off with inorganic, they might not take a look at how much they are paying for it. Industry experts also say that several PE firms are looking to exit their investments in BPO companies which means more M&A activity in the coming months. Also analysts expect the BFSI space to witness the maximum deals as clients are now looking to outsource core functions like mortagage processing and core banking. Despite growing by 14 per cent last fiscal, the BPO industry in India grew much slower than IT services as delayed decision making and deal restructuring took its toll. Currently over 70 per cent of the outsourced work to Indian BPOs are basic services like customer interaction and support and this will change as firms move up the value chain.

BPO among youngsters

The BPO industry has definietly got projects in their pipe line and this can be adjudged by the way in which the sector has generated employment. Business process outsourcing firms have been hiring employees and expanding their manpower resource. Earlier youngsters in the country did not look at call center jobs as a stable career choice. Only college-goers or those who didn't find employment elsewhere worked at the call center. Customer service agents were largely undergraduates, more so in the third world countries. Hence the value for man power became less in the initial stage. However the scenraio has drastcially changed now. 

 

When the economy became lean and companies were expected to shed weight, the call centers were the only units that were hiring. The youth joining the telemarketing sector looks at the BPO industry with a fresh perspective. The BPO services job had a certain stability that was not shaken up by the economic meltdown. Youngsters want job security and that is not something that the other industries like offline marketing or retail were in a position to offer. Moreover, there was a strong sense of purpose in expanding their horizons beyond set parameters. There were more opportunities for growth and the youngsters took the challenge up enthusiastically.

Significance of Infrastructure in BPO

The Indian BPO Industry has the potential to drive India's economic growth through the next few years. The strength of the BPO s in India lies in experience, language proficiency, entrepreneurial zeal, skilled workers, expertise in new technologies and a cost advantage. The services offered by the BPO companies are in HR, finance and accounting, transaction processing, content development, engineering, design, remote education, market research, data search, network consultancy, etc. Indian BPO industry is essentially still in the early stages of evolution. The Indian BPO market is in its early high growth phase and is growing at an astronomical pace.

The main attraction of BPO or business process outsourcing players came in primarily for low cost and high quality services; the second feature was the rapid ramping up of operations and a modern BPO infrastructure, which propelled India's economic growth to a new horizon. Improved infrastructure is another important factor which has helped India to achieve tremendous success in the field of IT/BPO. There has been tremendous growth and improvement in telecom, power and roads infrastructure in the last few years in India. Relevant telecom facilities are an important precondition for the success of the software and BPO industry.

Significance of training in BPO industry

Since the BPO industry is growing at a drastic phase, there is a need to maintain the standards. The outsourcing services sector exceeds expectation in many sectors. Owing to the high profile job, attractive pay scale and growth opportunity, most of the young minds in India have been shifting their focus towards BPO jobs. In order to deliver desired services to customer, who is 10,000 miles away, it is important to have good amount of business knowledge and required expertise.

The business process outsourcing industry is expected to generate more than a million jobs by 2015 and hence training is needed for ensuring the high quality performance. Moreover, there has been high attrition rate in this sector due to unsatisfied employees, monotonous work, unused talent, inadequate technical expertise etc. Also the uprising of high profile BPO jobs has triggered the need for better training. 

In order to retain the employees thereby reducing the attrition rate, most of the companies have given prior importance to training. Some of the problems faced by employees from the outsourcing sector are flexible shift timing and job stress. This in turn leads to de-motivation. Well designed training program with clear career path increases the job satisfaction among the young professionals and help them in becoming efficient and effective at the work place. So companies should handle such challenges of meeting training needs, although, the sector is taking a lot of initiatives in conducting training for new joiners. Most of the BPO s in India feature elaborate training infrastructure with computer based training sessions led by specially trained and qualified in-house trainers. The training session tries to identify the strength and weakness and emphasis more on the personality, problem solving skills and leadership skills of the employees.

BPO s coping with the recession

Business experts confirm that Business-process outsourcing is getting redefined and will expand rapidly over the next five to seven years outpacing growth in technology services. These days’ companies are looking to outsource a wide range of services including human resources and accounting. In order to meet this demand, outsourcing companies are rushing to build up their expertise. Several companies have taken the acquisition route while others are opting to develop these services internally, says one of the veterans. 

Talking about the recession, experts believe that the global economic meltdown largely depend on customer’s economic cycle. Some of the clients have been severely affected by the economy while there are hopes that they will recover very soon. Outsourcing volumes will increase gradually as customers come out of the downturn in the economic cycle. However, on the other hand, looking at the business in totality shows that the business has not shrunk, they opine. Companies continue to look forward in outsourcing services in industries like banking, financial services and insurance sectors. Also technology, telecom and manufacturing have their share in the bread as well. In addition, clients are interested in focusing on their very core businesses and they seek specialised providers. Most of the Indian BPO companies focus on existing sectors and later on expanding to adjacent areas.

Economic growth safe in BPO hands

Looking at the recent developments it can be confirmed that the Information Technology-Business Process Outsourcing (IT-BPO) service industry continued to provide sound support to the economy. Based on the surveys it has been found out that total revenues estimated at US$8.3 billion, higher by 30.6 percent than the US$6.3 billion receipts reported in 2008. While the growth rate recorded may have slowdown from those of previous years, it is still robust compared with that of other industries in the country.

In addition there has been a double digit growth rates in revenues in outsourcing sub sectors like contact centre, transcription, animation, software development and others. Contact centres accounts for half or 50.9 percent of the industry's receipts. At the same time the main driver of outsourcing services contribute 21.6 percentage points to the industry's growth, says the report. Simultaneously transcription and animation services also posted dynamic growth amid the expansion of transcription companies and the production of more local animation films. 

Further the survey pointed out that IT-BPO exports have increased by 45.9 percent to reach US$7.7 billion. Export earnings comprised 93.4 percent of total industry revenues, an increase from the previous year's 83.6 percent export-to-revenue ratio. Except for the animation sub-sector, all other sub-sectors recorded higher export-to-revenue ratios, with the highest at 96.1 percent for transcription.

What Indian BPO s Posses?

• Skilled, English-speaking manpower, which is available in excess

• Telecom and infrastructure facilities meeting the global standards

• Strong quality orientation among resources and their ability on measuring and monitoring quality targets

• The scope of offering 24x7 services based on the country's unique geographic location that allows for adjusting time zone differences

• Hands-on and positive policy environment which encourages ITES/BPO investments and simplifies rules and procedures

• An open tax structure, which places the ITES/BPO industry on par with IT services companies.

What are the scopes of BPO?

• Customer care has always been a strong basement of offshore outsourcing services and it will continue to do so in future

• With the entry of outsourcing possibilities into vale added domains like insurance claims processing, the financial services are expecting greater growth

• HR outsourcing services are already contributing its share on the BPO sector

• Administration services including back office administration are surely going to increase in the future

• Getting into creative field, content development outsourcing is something that will shine brightly in future

BPO Services Still in The Limelight

There is some good news in the BPO services sector. Many multinational companies prefer setting up offshore IT services and business services subsidiaries once again post all the trauma of recession. Mainly companies want to tap talent in low-cost locations. The subsidiaries popularly known as the captive centers in the outsourcing industry because they meet the in-house services requirements of companies. This can be back office outsourcing or even the core services outsourcing.

According to report, the focus of these centers has shifted from mere cost-cutting to innovative development and building deep business expertise which local outsourcers are not always able to provide. Recent trend suggests that companies prefer a hybrid model for offshoring that combines captive centers with outsourcing to local service providers. The BPO service providers continue to be a key element of the global sourcing strategy of organizations. In Asia alone around 62 new captive centers were set up and many were expanded. 

The setting up of new captive centers, and expansion of existing ones, will happen in multiple markets and will often be driven by the opportunity for companies to push their products and services in those markets. Experts opined that captive center has the skills in-house to hire staff, and knowledge of the market it operates it, making it more suitable for launching domestic sales operations. Also Offshore BPO service providers tend to do work for a number of customers in the same industry, such as financial services, insurance services etc.