Business Process Outsourcing Services

Business Process Outsourcing Services consists of hiring another company to manage business activities for you. It is distinguishable from information technology outsourcing whose main focus is on employing a third party company or a service provider to manage IT related activities such as application management and application development, data center operations and quality assurance.

During it's early years, BPO services were limited to outsourcing simple tasks such as payroll processing. It was later expanded to include employee benefits management, and eventually consisted of a number of functions that are considered non-core to the primary business strategy.

Today, companies frequently outsource financial and administration processes, human resource functions, call center services, customer service activities, accounting and payroll. These outsourcing deals often consist of multi-year contracts, with budgets reaching hundreds of millions of dollar.

People who are executing the work internally for the client firm are transferred and become the employees for the service provider. The ascendant service providers in the BPO field include US Companies such as IBM, Accenture and Hewitt Associates. Many BPO efforts consist of off-shoring, that is, employing a company based in another country.

India is a widely accepted location to carry out business activities in a systematic manner. Quite often BPO is also referred to as ITES - Information Technology Enabled Services. While Maximum Business Process includes some form of automation; IT enables these services to be performed.

Another important part of BPO is KPO (Knowledge Process Outsourcing). KPO however is considered a subset of BPO since it's still in it's infancy.

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With growing fears of a US led recession, not many experts seem to be optimistic about the future of business process outsourcing services industry. The irony however is that in spite of the adverse circumstances, the BPO industry still continues to grow, both horizontally and vertically. This may seem almost magical, but if you take a closer look, you will realize that the magic is nothing but the hard work and foresight of the BPO industry on the whole. Having anticipated the emerging trends and challenges a lot earlier than other industries, BPOs had enough time to devise newer, more innovative strategies and work processes that eventually helped them to emerge a winner.

Winners they certainly are, but they can hardly afford to rest on past laurels because the offshore outsourcing business environment is changing even faster, mainly due to the development of newer concepts and availability of newer technologies. This is why the BPO industry is constantly on the lookout for newer customer management and service delivery systems that might help satisfy the growing needs and expectations of clients. As of now, the BPO industry seems to have achieved this objective, evident from the increasing use of new customer service concepts such as BPO 2.0.

BPO 2 has succeeded where other systems have failed because it lays stress on the use of advanced yet cost-effective technologies. By deploying BPO 2, the BPO India industry has thus been able to achieve the two most important objectives viz. improving efficiency and quality and reducing operational costs. Improving efficiency and quality has become the need of the hour because customers have become more demanding and would just not settle for mediocre customer services. The need to reduce costs even further has however risen due to increasing intra industry competition and also due to the reduction in outsourcing budgets of client companies. Availability of other low-cost outsourcing hubs outside of India is another factor that is forcing Indian outsourcing companies to undertake cost reduction exercises.

As of now, BPO 2.0 deployments have been limited mostly to the Call Center India industry, but considering the huge benefits derived by this particular industry sector, it would not be wrong to assume that other sectors of the Indian outsourcing industry too stand to gain from BPO 2.0 concepts and methodologies. However, for that to happen, outsourcing companies would have to do a rethink of their existing strategies and most importantly prepare themselves for the potential changes that might become a reality through BPO 2.0 deployments. This in turn would require increased participation of available human resources in organizational matters and the development of the requisite infrastructure that can support the advanced technologies proposed under BPO 2.0.

The future might be even more turbulent or it is also possible that conditions may become favorable for the business process outsourcing industry. Whatever be the case, one thing is certain that BPO 2.0 is here to stay, obviously because it is a comprehensive customer management and service delivery system and not just a means to reduce costs. This is certainly good news for those who have already deployed BPO 2.0 and also for those who are in the process of doing so.

The business process outsourcing services industry was going great guns just a few years back and it was anticipated that the industry will achieve many new milestones in the near future.

It would have certainly managed to do so, but as things stand out now, it appears that the industry is nowhere close to that target. What happened was that in the middle of all the talks about the industries' double-digit growth rates, the US economy was struck by the subprime crisis, leading to a slowdown in all the world economies that are directly or indirectly interlinked.

The Indian outsourcing industry was amongst those that were hit the hardest by the subprime meltdown, obviously because a significant percentage of the industries' overall business comes from the United States.As of now, one of the main concerns of the Indian offshore outsourcing industry is the depreciating value of dollar against most of the major world currencies.

Dollar depreciation is making things difficult for the industry obviously because the industry is getting less for the same amount of work or say investments.

The industry was already having a tough time dealing with intra-industry competition and competition coming from other low-cost outsourcing destinations such as China, Malaysia, Indonesia. With a depreciating dollar, conditions, it seems, are getting worse for the industry with each passing minute.

So, is this the end of the great success story that the BPO India industry once was? Well, certainly not because even though the US subprime crisis is colossal, it is not something that would stay for ever.

Premier economists have predicted that the maximum time for a recovery will be no more than 12 months. They say that it can also be a lot less if other world economies show improved results in the coming two quarters.

Moreover, since the industry itself has started taking proactive steps for overcoming the challenges that lie ahead, it seems that it's only a matter of time before everything will be back to normal.

So,what exactly is the call center India industry doing right now? Well, it's a lot many things, but one of the most noteworthy is the implementation of BPO 2.0 concepts and methodologies that are being touted as the next big thing in the outsourcing business.

BPO 2.0 helps because it lays stress on the use of advanced yet cost-effective technologies and systems. Improving customer service quality and cost efficiencies has now become even more important and this is exactly what BPO 2.0 is designed to achieve.

Predicting the future has never been easy and never will be. However, considering the opinions expressed by eminent economists and also the proactive steps taken by the Indian outsourcing industry, it wont be wrong to say that the industry is set to regain its lost glory and that too in not a very distant future.

This is good news for everyone who works for or relies on the Indian business process outsourcing services industry and certainly bad for those who were always ready to write the obituary of the Indian outsourcing success story.