BPO to India Group 6: Austin Carlson Erin Isaacson Brandon Nordstrom Kyle Richardson Aaron Swanson

Agenda What is BPO? What is BPO? The Evolution of Outsourcing. The Evolution of Outsourcing. Capabilities in the Marketplace. Capabilities in the Marketplace. Rule to Follow. Rule to Follow. Pros and Cons. Pros and Cons.

What is BPO? Business process outsourcing (BPO) is the contracting of a specific business task, such as human resources and customer service, to a third-party service provider. Business process outsourcing (BPO) is the contracting of a specific business task, such as human resources and customer service, to a third-party service provider. This allows companies to focus on their core business processes. This allows companies to focus on their core business processes. BPO is implemented as a cost-saving measure for tasks that a company requires. BPO is implemented as a cost-saving measure for tasks that a company requires.

BPO Categories It is often divided into two categories: It is often divided into two categories: - Back Office Outsourcing which includes internal business functions such as billing or purchasing. - Front Office Outsourcing which includes customer-related services such as marketing or tech support.

Key Terms Key Terms: Key Terms: - Offshore Outsourcing is BPO that is contracted outside a company's own country. - Nearshore Outsourcing is BPO that is contracted to a company's neighboring country. - Onshore Outsourcing is BPO that is contracted with the company's own country.

BPO to India Indian revenues from BPO are estimated to have grown 107% to $ 583 million. Indian revenues from BPO are estimated to have grown 107% to $ 583 million. Leading Competitors: Leading Competitors: - Philippines, Mexico, Canada, China and Ireland % of costs to call centers operating in the US/UK is directly linked to man power costs. India only spends 33-40% of costs on man power. This includes training, benefits and other incentives for labor % of costs to call centers operating in the US/UK is directly linked to man power costs. India only spends 33-40% of costs on man power. This includes training, benefits and other incentives for labor.

Statistics of the Future The main revenue areas for Indian BPO companies. Indian revenues from BPO are estimated to have grown 107 per cent to $ 583 million.

Statistics of the Future Comparison of India Vs US BPO operating costs

Capabilities: Why go to India? Language Language –Major attraction for Multinationals –Advantage over competitors Educated Employees Educated Employees –Large number of qualified workers –Proven to be the best in the IT and computer software fields Strong technical skills Strong technical skills Eagerness to engage clients Eagerness to engage clients –Produce around 100,000 engineers annually

Capabilities: Why go to India? Infrastructure Infrastructure –Improvements have led to increasing success Telecom facilities Telecom facilities Power sector Power sector India as a whole India as a whole Government Government –Realize potential for economic development –Favorable policies have turned India into a BPO/IT hub. Examples: Investment promotion, telecom policy, IT Act Examples: Investment promotion, telecom policy, IT Act

Rules to Follow: What to Outsource Processes that do not add value to a product or service. Processes that do not add value to a product or service. Highly repeated tasks with little variation. Highly repeated tasks with little variation. Labor intensive tasks that do not require a companies intellectual property nor core competencies. Labor intensive tasks that do not require a companies intellectual property nor core competencies. Processes that will tie up large amounts of capital in assets. Processes that will tie up large amounts of capital in assets.

Rules to Follow: What Not to Outsource Processes that incorporate your core competencies. Processes that incorporate your core competencies. Processes that require access to intellectual property of your company. Processes that require access to intellectual property of your company. Non-labor intensive tasks. Non-labor intensive tasks. Processes that are associated with the image of your company. Processes that are associated with the image of your company.

Rules to Follow: BPO Guidelines There are many BPO providers, so research to find the one that best suits your needs. There are many BPO providers, so research to find the one that best suits your needs. Using one provider for multiple tasks will help streamline your BPO. Using one provider for multiple tasks will help streamline your BPO. Have some measure to check and control the output of your BPO. Have some measure to check and control the output of your BPO. Communicate with your BPO. Communicate with your BPO.

Pros of BPO English Language Proficiency English Language Proficiency Skilled Workforce Skilled Workforce Lower Wages Lower Wages Flexibility in Working Hours Flexibility in Working Hours Suitable Human Resources Suitable Human Resources Large Number of Graduates Large Number of Graduates

Cons of BPO No TCO based costs No TCO based costs Poor Infrastructure Poor Infrastructure Cultural Differences Cultural Differences Internal competition for resources Internal competition for resources Rising labor costs Rising labor costs Political and religious instability Political and religious instability

Conclusion As a manager! As a manager! –Allows company to focus on core competencies. –What the future lies. –Attractiveness of India.

Sources BPO India: Business Process Outsourcing. BPO India: Business Process Outsourcing. Forbes Magazine: Business Process Outsourcing. Forbes Magazine: Business Process Outsourcing. Why India? Why India? InformationWeek: Indian Outsourcers Grow Fast, Gain Prominence. InformationWeek: Indian Outsourcers Grow Fast, Gain Prominence. CIO Definitions: CIO Definitions: BPO service India: Comparing India with other BPO destinations. BPO service India: Comparing India with other BPO destinations.