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Business Process Outsourcing

Business Process Outsourcing

The business process outsourcing industry in India refers to the business process outsourcing services in the outsourcing industry in India, catering mainly to Western operations of multinational corporations (MNCs).

 

As of 2008, around 0.7 million people work in outsourcing sector(less than 0.1% of Indians). Annual revenues are around $ 11 billion, around 1% of GDP. Around 2.5 million people graduate in India every year. Wages are rising by 10-15 percent as a result of skill shortage.

 

In 2002 Spectramind was bought by software major Wipro and BPO by then had become mainstream like the IT Industry in India. The team that had set up Spectramind went on to start Quatrro in 2006, a BPO specialising in high end BPO/KPO services. By 2002 all major Indian software organizations were into BPO, including Infosys (Progeon), Inforlinx, HCL, Satyam (Nipuna) and Patni. By 2003 Daksh was bought out by IBM, and later in 2006 MphasiS was acquired by EDS. Even international 3rd party BPO players like Convergys and Sitel had set up shop in India, swelling the BPO movement to India. Then service arms of organizations like Accenture, IBM, Hewlett Packard, Dell also set up shop in India.

 

The rapid growth of the outsourcing industry would have not been possible if not for the rise of the Internet. The increase in Internet users has contributed so much in this industry. The boundaries that separated one nation from the other have been severed by the information superhighway thus making it easier for people to communicate with each other. A person from one side of the world can easily communicate with another person at the opposite side of the planet as if they are just next door neighbors.

With the whole world being wired together, it was very easy to transport jobs to people outside the main nation. And with the advantage of the difference in time zones, tasks and functions can be done on a 24-hour basis when outsourcing.

 

The Benefits of BPO

1. One of the most important benefits of outsourcing is cost savings. By tapping into the lower cost economies, companies in industrialized nations can take advantage of the developing nations.

 

2. Outsourcing vendors are usually fee-for-service basis. This means that they are only paid when certain jobs or functions are done. This scheme is very beneficial for companies.

 

3. Companies become more flexible when it comes to making use of their resources especially in times of cyclical fluctuations.

 

4. The client company can focus and give more time to the core business activities. The burden of carrying other non-core functions will be handled by other 3rd party service providers.

 

5. Business process will be sped up due to the fact that certain functions will be taken care of specialists in that area. It is also not just about speed but with quality of work as well.

 

6. Errors and mistakes can easily be detected and can easily be fixed.

 

Given these benefits, the outsourcing industry will continue to grow in the future as major parts of businesses.

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