Bpo Analysis in India

Introduction

Business process outsourcing (BPO) is a broad term referring to outsourcing in all fields. Generally, outsourcing can be defined as – an organisation entering into a contract with another organisation to manage one or more of its business processes. A BPO differentiates itself by either putting in new technology or applying existing technology in a new way to improve a process.

Most of the time, it is the delegation of one or more IT-intensive business processes to an external provider that in turn owns, administers and manages the selected process based on defined and measurable performance criteria. BPOs are one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry.

They refer to the assumption of the responsibility for processes and operational activities by a third party service provider at the behest of an organization, often in a bid to generate cost savings and to enhance efficiencies.

India became familiar with ‘Business Process Outsourcing' only in the early and mid 1990's, but then the entire country seemed to be quivering with the ‘BPO fever'. The foreign direct investment (FDI) in the country owes a lot to this sector, which was seen progressing at a break-neck speed. The cheap labour costs and the pool of skilled, English-speaking Indians have always been the two foremost factors contributing to the BPO boom in the country.

The studies conducted by NASSCOM and the global consultants McKinsey & Co. brought to light certain facts on the Indian BPO segment. According to the study, the country's flourishing ITES - BPO sector is estimated to have achieved a 54% growth in revenue in 2003-04; the BPO segment created job opportunities for around 74,400 additional personnel in India in the same year. However, things changed in 2005.

In the last 5 years, about 50 odd business process outsourcing units have existed. For example, Genpact has outsourced its internal finance and accounts work to rural shores. Another customer of theirs wants them to provide regional language support.

Reasons for their popularity

The numerous employee benefits that majority of the BPOs provide are a major reason for its popularity. They are provided with the following, apart from various other intermittent benefits: provident fund, gratuity, medical insurance, subsidized food and transportation facilities, company leased accommodation, good infrastructural facilities like recreation, cafeteria, ATM and Concierge facilities, corporate credit cards, cellular phones, laptops, regular medical checkups, easily available loans, educational benefits, performance based incentives, flexible time schedules, flexible salary benefits, regular get-togethers, cultural shows, wedding day gifts, employee referral schemes, paid days off, maternity leaves and employee stock