PPT ON BPO
• What is BPO?
• The Evolution of Outsourcing.
• Capabilities in the Marketplace.
• Rule to Follow.
• 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.
• This allows companies to focus on their
core business processes.
• BPO is implemented as a cost-saving
measure for tasks that a company
• 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:
- Offshore Outsourcing is BPO that is
contracted outside a company's own
- Nearshore Outsourcing is BPO that is
contracted to a company's neighboring
- 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.
• Leading Competitors:
- Philippines, Mexico, Canada, China and
• 67-72% 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.
India's BPO Market in 2008
Service Line First Estimate (1999) Second Estimate (2001)
HR 5.4 3.5-4.0
Customer Care 4.1 8.0-8.5
Payment Services 2.9 3.0-3.5
Content Development 2.6 2.5-3.0
Administration 1.3 1.5-2.0
Finance 0.7 2.5-3.0
Figures in $ billion
Indian revenues from BPO are estimated to have grown 107 per cent to
$ 583 million.
Rules to Follow: What to Outsource
• Processes that do not add value to a
product or service.
• Highly repeated tasks with little variation.
• Labor intensive tasks that do not require a
companies intellectual property nor core
• Processes that will tie up large amounts of
capital in assets.
Rules to Follow: What Not to
• Processes that incorporate your core
• Processes that require access to
intellectual property of your company.
• Non-labor intensive tasks.
• 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
• Using one provider for multiple tasks will
help streamline your BPO.
• Have some measure to check and control
the output of your BPO.
• Communicate with your BPO.
Pros of BPO
• English Language Proficiency
• Skilled Workforce
• Lower Wages
• Flexibility in Working Hours
• Suitable Human Resources
• Large Number of Graduates
Cons of BPO
• No TCO based costs
• Poor Infrastructure
• Cultural Differences
• Internal competition for resources
• Rising labor costs
• Political and religious instability
• As a manager!
– Allows company to focus on core
– What the future lies.
– Attractiveness of India.