1. BPO in China: Reality and Potential
Sept. 8, Xiamen
Roc Yang, CDG

2. A real life example of outsourcing

3. Contents
BPO Defined
BPO in China: a reality check
BPO in China: What’s in store
BPO in China: a Case Study
CDG Snapshots

4. Gartner Dataquest BPO Defined
“ BPO is the delegation of one or more IT-intensive business processes to an external provider who, in turn, owns, administrates and manages the selected process(es), based upon defined and measurable performance metrics.”
Gartner Dataquest

5. The key enablers for BPO
Business Process Outsourcing started in the early 90’s, but has recently experienced an increased level of interest and acceptance.
Maturation of worldwide BPO service providers
Emergence of and acceptance of low-cost location delivery models
Improvements in telecommunications and the availability of bandwidth
Technological evolution of the Internet, e-Commerce, imaging, and application service providers

6. BPO-Some key statistics
(US $bn)
2001
2005
2008
Total Business Process
Outsourcing Market
127
234
310
Percentage Offshored to
Countries such as India, Ireland, etc. 5%
15%
20%
Offshored BPO Market
6.4
35.1
62.0
India ITES Exports
1.5
9.5 21

7. Contents
BPO Defined
BPO in China: a reality check
BPO in China: What’s in store
BPO in China: a Case Study
CDG Snapshots

8. Can “World Factory” last forever?

9. Why China should embrace BPO?
To fully leverage manufacturing expertise
To service world office without having to go abroad
It is a “smoke free” industry
To fully tap China’s human resources pool
To Have facilitate industry migration in China

10. Value Chain Migration as a country
KPO
“Created by China”
University
and above
BPO
12 years-University
level education
“Managed from China”
Manufacturing outsourcing
0-9 years education
“Made in China”

11. BPO in China: a macro perspective
Absence of country marketing, leaving China out of the radar screen of global BPO players;
Lack of industry self discipline;
Lack of necessary supportive measures as a long term strategic industry;
Incomplete industry value chain not complete

12. BPO in China: a micro perspective
Low end and low value-add services;
Business through agents, leaving little or even no margin at all;
No industry and process expertise involved;
Small workshop or family business without global competitiveness;
Purely opportunistic and ad hoc offshore players;
Not many visionary companies in the space

13. Contents
BPO Defined
BPO in China: a reality check
BPO in China: What’s in store
BPO in China: a Case Study
CDG Snapshots

14. China: hotspot for BPO
MNCs set up captive centers in China;
Indian players to leverage on global client base for the Asian pie;
Local players grow both in number and service capability and
China maturing as both a vendor base and a market

15. China to vie for the top BPO spot
Set up “country marketing” engine
Improve basic infrastructure
Polish the relevant policies
Build up the vendor base
Improve the industry value chain; e.g. language skills and domain knowledge

16. Contents
BPO Defined
BPO in China: a reality check
BPO in China: What’s in store
BPO in China: a Case Study
CDG Snapshots

17. An IFC Portfolio Bank The Client's Problem
Back office centralization created new bottlenecks and need for a large staff pool
Unbearable management time and efforts to manage cost and business risks
CDG's Solutions
Took over one key function of the client’s back office to replace about 180 staff
BPR to decompose the existing processes through technology
Concurrent mass processing to meet real time requirements
Insurance coverage for service failure
The Results
Focused on front end customer services
Cut down back office operations cost while making it transparent;
Shortened service delivery time from 15 minutes to 3 minutes；
Reduced operations management complexity and difficulty, particularly during the holidays and at business peaks.
This is good, need more specifics

18. Contents
BPO Defined
BPO in China: a reality check
BPO in China: What’s in store
BPO in China: a Case Study
CDG Snapshots

19. CDG Snapshots History Industries and Services Management Team
Founded in 1998 as Cybersky Technologies and had been China’s Top Three Imaging System Integrator for the financial services sector. It was restructured into CDG with financial support from CDH, a leading private equity fund in 2005 to focus on BPO.
Industries and Services
Leveraging on the 8+ years experience in the banking, financial services and insurance sectors, CDG has established “One-stop Shop” business process outsourcing solutions around its mass production capabilities.
Management Team
The team came from consulting, System integration, IT outsourcing and the BFSI sectors. Their strength lies in their capability to leverage technology and industry know-how to turn BPO business into a low cost mass production in China.
Facilities Network
CDG’s main data processing operation is in Beijing with 600+ seating capacity on one shift basis. The Shanghai BPO Center is scheduled to open in June The third facility in Guangzhou is also on the agenda to serve the South China markets.
Technology and Operations
CDG has the industry’s leading Data Processing System that processes client’s transactions based on scanned images on a JIT basis. The system supports multiple languages and multiple clients simultaneously in a paperless environment.

20. Thank you!