Business Process Outsourcing (BPO) can be defined as the transfer of an organization’s non-core but critical business functions to an external vendor who uses an information technology (it) based service delivery. Since delivery is it based, BPO is also referred to as it enabled services (ITES).

Though outsourcing of operations in the field of it has been taking place for many years, it gained momentum since the late 1990s due to the rise of internet and communication technologies. A number of big companies from various industries began to perceive the significant benefits of BPO and started outsourcing, part of their non-core business functions. By outsourcing non-core business processes organizations obtain the flexibility to concentrate on their core competencies resulting in improved efficiency and cost reduction.

This gave rise to many specialized BPO vendors across the globe. Due to the large English-speaking population, widespread computer-literacy, lower personnel expenses, strategically favourable time zone and high quality of work, India has become a major hub for international BPO activities. Moreover, in the coming years, the volume of BPO-related activities and consequently the employment opportunities are expected to grow exponentially.

BPO sector in India

In the early 1990s, general electric realized that significant benefits can be obtained by moving some of its back-office and customer service processes to India. The move was a great success in significantly cutting costs and in raising quality and productivity benchmarks. The success of this model propelled the rest of corporate America to seriously explore possibilities of India as an outsourcing destination. Another corporate giant, American Express followed soon after, moving a part of its transaction processing work and call centers to India. Improvement in cost, quality and productivity encouraged many companies to rapidly start and scale up their offshore operations.

Gradually, India emerged as a global hub for it outsourcing along with countries like China and Canada, due to availability of highly qualified skill pool and faster adoption of well-defined business processes. Government’s active cooperation in creating the necessary business environment along with improvements in infrastructure have catalyzed the growth of the BPO industry.

Robust communication infrastructure is a major reason for India becoming a prime destination for BPO. With the launch of India’s first private undersea cable in the recent past, the international bandwidth situation has improved dramatically. Private operators also have put together aggressive plans to install lines and facilities of considerable bandwidth over the next few years. The privatization of the telecom industry has resulted in the emergence of new players and a significant drop in telecom rates. Continuing competition in the industry is expected to result in a further reduction in telecom prices.

Call centers

Study of the early adopters of India as an outsourcing destination include customers across verticals like insurance, banking, pharmaceuticals, telecom. Automotive and airlines. Of the verticals listed above insurance and banking are able to generate bulk of savings purely because of the large proportion of processes they can outsource like claims processing, loan processing and customer servicing through call centers. Research indicates that about 70% of costs involved in operating call centers in the US/UK is directly linked to manpower costs including training, benefits and other incentives for labour. Whereas, in India only about 35% of costs are personnel-related expenses.

Some important components involved in a voice based call center handling international calls include items such as:

1. IPLC (International Private Leased Circuit) line

2. Dialer

3. CTI (computer telephony integration)-this system provides the necessary pop-ups on the monitor screen of the agent as soon as a call is transferred. The pop-up screen gives details of the caller, information required, and the product details as required by the caller.

4. ACD (automatic call distribution)- the calls are automatically transferred to the available agents. This may be skill based distribution or general transfer of calls.

5. IVR (Interactive Voice Response) - this enables customers calling a contact center to use voice commands to retrieve the information they require without ever speaking to an agent. This helps to reduce the duration of time an operator speaks to the customer.

6. Voice logger - this log the conversation of all agents which can be used to check the quality of service provided by the agents.

7. MUX - used to connect the IPLC at both the ends. Nowadays most of the call centers are migrating to JP network, hence usage of the MUXS are minimal and routers are needed to connect the IPLC on both of the link.

8. Call center management software - software to manage the calls & reporting.

9. Lan cabling - this is the backbone for retrieving, logging and transfer of data.

Customer service, tele-marketing, credit and collections are some of the types of activities that are performed through a call center. Frequently, the IVR system takes are of a large number of calls related to routine transactions. Calls involving complex situations requiring human intelligence are redirected to human operators. The operators in the BPO companies offering call centers services provide the necessary services to the customers.

Data Conversion

Data conversion can be defined as a process of converting data from one structural form to another to suit the requirements of the system to which it is migrated. Data conversation becomes a necessity when a firm decides to move to a new software application to maintain its business critical data. Converting data from legacy systems into a database built on current technologies is an example of this work. Encoding and processing data in an audio or image form into homogeneous information that allows easy access also and is also a kind of data conversion. Medical transcription, encoding data from hand­written applications are examples of such services.

Data conversion and migration process are generally designed for two systems in the broadest sense, which are online transactional processing (OLTP) systems and online analytical processing (OLAP) systems. The approach for data conversion and migration for these two systems can vary considerably as the outcome of the conversion process serves different needs.

Data mapping is a process of assigning a source data element to a target data element. The process of identifying and documenting the target field for each of the fields in legacy system is involved in data mapping. Data mapping is an exercise that must be undertaken by a team comprising of business analysts, technical team and data mapping team.

Opportunities - BPO

Some of the important business prospects for the BPO industry that are opening up in the near future according to NASCOMM include:

1. Customer support services: functions include technical help & help desk features where in the operators located in call centers provide assistance to the clients and personnel of their corporate clients. This requires direct customer interaction.

2. Marketing services : this includes sales and marketing activities. Content development and consultancy for automated voice broadcast campaigns is an important aspect of this telemarketing activity. Sales activity involves attending to customers who place orders over the phone.

3. Human resources services: functions that are being outsourced include payroll, benefits, education/training, recruiting, personnel administration, contingent workforce management, and workforce analysis.

4. Finance & accounting services: though this started with transaction processing activities, the market is expected to move to offering financial analysis solutions to help the clients in making their business decisions.

5.  Engineering services : these are meant to provide technical consultancy in the creation of a product or service. Functions include research & development, product design, testing, project management, documentation and engineering analysis.

6.  Logistics : this includes supply chain management issues meant to reduce inventory costs and improve delivery schedules. The services also include invoice collection, payment processing, transportation route optimization, warehousing and inventory control.

7.  Healthcare : the industry started with medical transcription services and the trend is towards services such as disease management and medical imaging.

Professional skills & personality traits needed­

Some of the professional and personal qualities required in prominent BPO areas are given below. As can be seen from the foregoing discussion, BPO business is not just something focused on call-center activity. Opportunities are opening up for professionals, processing a variety of skills.

More importantly, it appears that strong professional skills along with familiarity with software/hardware aspects will be the basis for careers in this industry. These professional skills required range from finance & accountancy to engineering management & operations research to business administration to pharmacy and more.

Value addition that a professional acquires is one of the strongest incentives that draws the best and brightest people into any industry. The nature of work in BPO industry is moving in this direction. This is a welcome development which is expected to open up global opportunities for talented and hardworking local professionals.

(The author is Principal, Nopany Institute of Management Studies, Kolkata)