BPO India

We outsource several functions in our daily lives to other people and agencies. Some of these daily functions are laundry and house-cleaning services, painting of our house, or plumbing services. We outsource them mainly because somebody else is better equipped and knows how to do it better, faster, and cheaper than us. Similarly, companies have been outsourcing several activities such as travel, legal, and cleaning services to outside agencies for several years and it has been a win-win situation for all involved. Today, most companies, including those from the Fortune 500, are outsourcing services such as customer care, back office operations, engineering and design, H R management, accounting, data entry, and many other services (these services are also referred to as IT Enabled Services ) to outside agencies

What is outsourcing?
Business Process Outsourcing (BPO) means the delegation of one or more IT and manpower intensive business processes to an external provider that owns, administers and manages that selected process, based on defined and measurable performance metrics. It calls for examining the processes that make up the business and its functional units, and then working with specialized service providers to both improvise and outsource these at the same time.

Outsourcing is becoming a winning strategy for forward thinking managements. It is no longer merely a means of reducing costs but also a tool for adding value to business. It enables organizations to concentrate on their core business, carry out business reengineering, and provide information that is valid, timely, and adequate to assist decision making at the management level and quality and cost control at the middle and lower levels

Outsourcing figures
Since 1990 there has been an explosive growth in the use of outsourcing. From near zero when outsourcing first emerged in the late 1980's from $100 Billion in 1996 (according to Harvard Business Review) to an estimated $318 Billion in 2001. Dun and Bradstreet estimates that outsourcing will soon touch the $ 1 Trillion mark globally. One of the earliest outsourcing deals was conducted in 1989 when Eastman Kodak gave an order worth $ 250 million to IBM. The deal took place cause Kodak had identified its core competencies, realized that IT was not one of them, and wanted to partner with a provider to deliver on this non-core activity while it focused on its own core competencies.

The ITES market
According to industry estimates, the ITES market globally was of the order of US$ 13.5 billion during 2000 and is expected to grow to US $ 142 billion by 2008. The Pricewaterhouse Coopers Global Top Decision-Makers Study SM is a landmark study — the first to focus exclusively on ITES at billion-dollar multinationals. Conducted by Yankelovich Partners for Pricewaterhouse Coopers, the study provides an in-depth report of the attitudes and behavior of senior executives and their companies toward ITES. Interviews were conducted with 304 top decision-making executives in 14 countries: CEOs, Presidents, CFOs, COOs and CIOs. Among this group, 192 companies (63%) reported outsourcing one or more business processes.

Technology is shrinking global distances to the point where, in reality, having work performed halfway around the world is not much different from having it done in an office building across the street.

Outsourcing has emerged as the single most powerful tool for companies seeking to stay competitive by transforming themselves using its benefits.

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