BPO Basics provides the basic level information about Business Process Outsourcing and the concept of outsourced call centre from definition to Buzzwords.

What is BPO?
All Outsourcing activities can be classified into three types. Basic/Traditional outsourcing services, which curb direct costs, such as hardware/software maintenance and operation costs. The second type of outsourcing helps lower "indirect" costs and achieve efficiencies in areas related to business processes This is termed Business Process Outsourcing. At the highest level, is the Business Transformation Outsourcing.

Simply put, BPO is the delegation of one or more business processes to an external provider who in turn provides services for the selected process based on certain defined and measurable performance criteria specified by your organisation. This generally involves an organisation's non-core processes.

BPO buzzwords

Why outsource

Business values of outsourcing

India advantage

Useful web sites

BPO Buzzwords (terminology)

Nearshore
Nearshore outsourcing or 'nearshoring' is outsourcing within nearby region or neighboring country.

Service Level Agreement (or SLA)
An SLA is a contract defined by the buyer and defines the nature, cost and conditions of the outsourcing services to be provided by the service provider. Examples of SLA metrics include Response time, Quality etc.

Outsourcing can be onshore, near shore, offshore or a combination of both onshore and offshore.
Business Process Outsourcing and Offshoring are sub sects of outsourcing.

Onshore refers to the business process being carried out at the organisation's location itself.

Offshoring refers to an organisation's business process being carried out at the remote site.

Information technology Outsourcing (ITO) refers to outsourcing of IT services (Infrastructure and applications) to a third party.

Business Process Outsourcing refers to the business process outsourced to the service provider, e.g. technical support wherein the service providers provides this service to the organisation's customers.

Why Outsource?
BPO is growing because companies want to focus on their core businesses. Companies worldwide feel the need to shed their ancillary processes, free up internal resources to focus on their core business competencies.
BPO is a strategic management tool that can help organisations to improve process level efficiency and effectiveness, as well as reduce costs.

Business Values of Outsourcing

• Cost Advantages- BPO provides an accounting advantage - financial engineering with regard to assets, staff and infrastructure
• Innovation and speed to market- Ability of the outsourcer to do things which an organisation cannot do on its own or does not have the domain expertise.
• Increased customer satisfaction, more efficient operations by focused effort on customer service by the outsourcer.
• Economy of scale - BPO provides the flexibility to respond to a rapidly changing marketplace and scale operations up or down as conditions dictate
• Business risk Mitigation by capitalising on the outsourcer's knowledge of local laws, infrastructure, processes and expertise.
• Rapid access to high quality practices at the outsourcer's end.
• Availability to skilled personnel also increases the quality of service. Outsourcing a process also means the buyer no longer has to manage the head count. Recruiting and retaining talent in a tight market is difficult. The level of difficulty increases with the specialised knowledge required. The outsourcer, on the other hand, is adept at attracting the best and the brightest in its field.
• Shorter project delivery times due to the expertise of the outsourcer with regard to transition of business processes to the offshore site.
• Using the time difference to your favour, especially where the offshore company provides support or maintenance.
• Better control over operations. Internal resources can now focus on core customer service processes.

India Advantage
India's technological advances are noteworthy. Several Fortune 500 companies have opened centres here, to benefit from the technologically skilled, highly educated, motivated workforce. Companies like GE, and American Express, have successfully demonstrated the benefits with total annual savings of few hundred million dollars between them alone.
Also India leads the world in quality adherence, which is stated, from the fact that India has the highest number of Maturity Level 5 organisation in the world. A major reason why Global Corporations are outsourcing to India today is Productivity Improvement and Quality Improvement. A study by a leading research organisation shows that when processes are off shored to India, companies not only get the advantage of low cost but also experience improvement in productivity and quality.

India's advantage as the BPO destination can be summarised as follows:

• Two million graduates each year (Existing Pool: over 25 million)
• Bangalore - the silicon valley of India has the highest number of software professionals in the world taking the first place from Osaka, Japan.
• English speaking and IT savvy workforce suitable for an outsourced call centre
• Indians view BPO jobs as a good career option.
• Availability of qualified personnel across various industries.
• Cost reduction up to 50%
• Government support for Call centre & BPO industry
• Improving telecom infrastructure to meet outsourced call centre requirements
• Adherence to leading quality practices by various organisations. Certifications are given importance.
• Lower infrastructure costs
• Favourable time lag: 12 hours with US & 5 hours with Europe
• Overnight turnarounds possible
• Resources with experience of financial and legal systems similar to the west
• Strong domestic IT services industry to support BPO industry

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