BPO: Business Process Outsourcing
Leanna Dertinger, Jana Earnshaw, Mitsuru Kajio,
Jesse McShane & Simon Seid
Terminology
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Outsourcing
Offshoring
BPO
ITO
Fragmentation
History of BPO
• World War II
– Increased international trade
• 1960s – 1980s
– Importing turns to outsourcing
• 1990s – Present
– Services now outsourced
– BPO begins
HP Goes The Distance For P&G
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Corporate Culture & Brand
Finance and Accounting
Bangalore & Mumbai, India
Global Customers w/ Local
Support
• Core Competencies cut
Defects
Global Accounts Payable Processing
BPO Advantages
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Productivity Improvements
Cost Savings
Improved HR
Focus on Core Business Competency
Increased Capability
Benefits
BPO Disadvantages
• Recent Studies
• Knowledge Disappears and is Transferred
to the Outsourcing Partner
• Poor Quality Control
• Restoring Operations is Complicated
• Lack of Loyal Employees
• Reduction in Strategic Alignment
Video
Why BPO in India?
• Language
• Education
• Quality
- Communication
- No pirated products
• If Chinese Government Policy changes, what will
happen?
- Turning point will be by 2010
Comparison: India versus China
China
India
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Educational System
Cost Advantage
Time/Distance Advantage
English proficiency
Government Support
Quality
Labor Pool
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Educational System
Cost Advantage
Time/Distance Advantage
Close to Japan
Matching Process to Market
India
• Development of
software
• Call center
– IBM
China
• Manufacturing of
components
• Japanese IT
Companies
Source: BusinessWeek, The Future of Outsourcing
Hot Players in Outsourcing
Business Services
Software Development
Call Centers
1. Hewitt Associates (U.S.)
1. Tata Consultancy Services (India)
1. Convergys (U.S.)
2. ACS (U.S.)
2. Infosys Technology (India)
2. Wipro (India)
3. Accenture (U.S.)
3. Wipro (India)
3. ICICI One Source (India)
4. IBM (U.S.)
4. Accenture (U.S.)
4. ClientLogic (U.S.)
5. EDS (U.S.)
5. IBM (U.S.)
5. 24/7 Customer (India)
6. Hewlett-Packard (U.S.)
6. Cognizant Techonology Solutions (U.S.)
6. SR.Teleperformance (France)
7. Wipro (India)
7. Satyam (India)
7.e Telecare International (U.S.)
8. HCL Technologies (India)
8.Patni Computer Systems (India)
8. SITEL (U.S.)
9. Tata Consultancy Services (India)
9. EDS (U.S.)
9. Teletech (U.S.)
10. WNS Global Services (India)
10. CSC (U.S.)
10. CustomerCorp. (U.S.)
Source: BusinessWeek, The Future of Outsourcing
5 Managerial Steps That Pay Off
1. Go Offshore for the right reasons
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Shifting a broken process overseas may not fix it
2. Choose your model carefully
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Could cost more…..(I’ll fix this part)
3. Get your people on board
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Employees and middle managers can make the bold
move happen….or stop you in your tracks
5 Managerial Steps That Pay Off
4. Be prepared to invest time and effort
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Often what is lacking in offshore partners is a lot of
deep process knowledge
5. Treat your partners as equals
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Telling your partners exactly what to do and how to
do it is not conducive to the entire process
Examples
• Penske and India’s Genpact
• Eli Lilly
Sources
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Gibson, Stan. “HP Goes DistanceFor P&G,” eWeek, 3/20/2006, Vol. 23
Issue 12, p49-52, 3p.
“A world of work,” The Economist, November 13, 2004, pp. 6-7.
Booton, Bob (2005). Outsourcing in a box. San Jose, CA: Bidness Books
Publishing.
Engardio, Pete, "The Future of Outsourcing," Business Week, January
30,2006. pp. 50-58.
Kripalani, Manjeet, "Five offshore practices that pay off," Business Week,
January 30, 2006. pp. 60-61.
http://economictimes.indiatimes.com/articleshow/1468167.cms
http://www.behtimes.com/article/123/7/
http://us.rediff.com/money/2004/jan/08bpo.htm
http://globalconnect.ucsd.edu/taipei/documents/InterRegionalPartnershipsAnIndiaPerspective.pdf
http://www.cyfuture.com/business-process-outsourcing.htm
http://www.bpoindia.org/
http://www.xicom.biz/research.html
http://www.networkworld.com/news/2004/0407updatibm.html
http://encarta.msn.com/encyclopedia_701702628/Outsourcing.html