BPO: Business Process Outsourcing

1
BPO Business Process Outsourcing

• Leanna Dertinger, Jana Earnshaw, Mitsuru Kajio,
• Jesse McShane Simon Seid

2
Terminology

• Outsourcing
• Offshoring
• BPO
• ITO
• Fragmentation

3
History of BPO

• World War II
• Increased international trade
• 1960s 1980s
• Importing turns to outsourcing
• 1990s Present
• Services now outsourced
• BPO begins

4
HP Goes The Distance For PG

• Corporate Culture Brand
• Finance and Accounting
• Bangalore Mumbai, India
• Global Customers w/ Local Support
• Core Competencies cut Defects

5
Global Accounts Payable Processing
6
BPO Advantages

• Productivity Improvements
• Cost Savings
• Improved HR
• Focus on Core Business Competency
• Increased Capability

7
Benefits
8
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

9

• Video

10
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

11
Comparison India versus China

• China
• Educational System
• Cost Advantage
• Time/Distance Advantage
• Close to Japan

• India
• Educational System
• Cost Advantage
• Time/Distance Advantage
• English proficiency
• Government Support
• Quality
• Labor Pool

12
Matching Process to Market

• India
• Development of software
• Call center
• IBM

• China
• Manufacturing of components
• Japanese IT Companies

13

• Source BusinessWeek, The Future of Outsourcing

14
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

15
5 Managerial Steps That Pay Off

• Go Offshore for the right reasons
• Shifting a broken process overseas may not fix it
• Choose your model carefully
• Could cost more..(Ill fix this part)
• Get your people on board
• Employees and middle managers can make the bold
  move happen.or stop you in your tracks

16
5 Managerial Steps That Pay Off

• Be prepared to invest time and effort
• Often what is lacking in offshore partners is a
  lot of deep process knowledge
• Treat your partners as equals
• Telling your partners exactly what to do and how
  to do it is not conducive to the entire process

17
Examples

• Penske and Indias Genpact
• Eli Lilly

18
Sources

• Gibson, Stan. HP Goes DistanceFor PG, 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/14
  68167.cms
• http//www.behtimes.com/article/123/7/
• http//us.rediff.com/money/2004/jan/08bpo.htm
• http//globalconnect.ucsd.edu/taipei/documents/Int
  er-RegionalPartnershipsAnIndiaPerspective.pdf
• http//www.cyfuture.com/business-process-outsourci
  ng.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/Outs
  ourcing.html