Outsourcing

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THE EFFECTIVE EXECUTION OF AN OFFSHORE BPO
STRATEGY Presented to Electronic Retail
Association 2007 Asia Conference, Hong Kong April
26, 2007 by Khawar Ali - Head of UK Business
Development
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Part One Industry Overview

• What is Business Process Outsourcing?
• Why do companies engage in BPO?
• Why do companies engage in Offshore BPO?
• The Offshore BPO experience
• Offshore BPO capabilities

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What is Business Process Outsourcing?

• The migration of a business process from within
  an organization to an external third party
  provider of these services
• Examples of business processes that are regularly
  outsourced include contact centre, finance,
  human resource and IT functions
• Historically, only large companies engaged in
  BPO. Technology has meant that companies of all
  sizes now engage in some form of BPO.

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Why do companies engage in BPO?

• To gain industry expertise
• To ensure cost predictability
• To gain technical IT knowledge and capabilities
• To improve their time to market
• To improve the quality of their delivery
• To allow them to focus on core competencies
• To achieve cost savings

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Why do companies engage in Offshore BPO?

• To gain industry expertise
• To ensure cost predictability
• To gain technical knowledge and capabilities
• To improve their time to market
• To improve the quality of their delivery
• To allow them to focus on core competencies
• To achieve cost savings
• To counteract issues related to recruitment,
  retention and attrition
• To access to industry-leading IT systems
• To achieve enhanced cost savings

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The Offshore BPO Experience
2005 Domain Expertise Total Value
1998-2000 Resource Availability
2001-2002 Resource Cost
2003-2004 Quality
I need people for my Y2K project ASAP! Send me
whatever you have
I cant afford astronomical labor costs. There
has to be a better way.
I need a vendor that has the processes, methodolo
gies and people to get the job done.
I need someone that understands my business and
help us to achieve the next level. The end
result is what I am looking for.
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Offshore BPO Capabilities

• Then
• Perception - Cost Savings due to low labour
  rates.
• Now
• Services and connectivity are seamless global-
• Technology, infrastructure, and security
• Expertise and maturity of BPO industry
• Process improvement
• Having these skill sets now allows them to
  compete globally for all BPO services.

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Offshore BPO capabilities
North America
Europe
Asia
Caribbean
Latin America

• Customer Retention
• Outbound Service
• Outbound Sales
• Quality Monitoring

• Customer Service
• Inbound Sales
• Technical Support
• Transactional Processing

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Part 2 Successful Off-shore Migration

• Asking the Right Questions
• Why
• What
• How
• Where
• Pitfalls to Avoid
• Conclusions

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Asking the Right Questions Why

• Why is the company now seeking to outsource
  some or all of its services?
• Do business goals and priorities dictate this
  action being discussed?
• Why the need to go offshore versus near shore
  or domestically?
• Are market dynamics a strategic fit with
  international business expansion plans driving
  this need?
• Are service dynamics such as education, skilled
  employees, reduced attrition driving this
  change?
• Have the cost, value, quality, and process
  advantages been proven out with this solution?

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Asking the Right Questions What

• What impact will outsourcing have on your
  business, products, services,
• and competition?
• What will this change do to existing clients
  and prospective customers?
• What services, sectors, or segments of our
  business do we want to outsource?
• What measurable results are required to justify
  outsourcing?
• What risk factors will be associated with a
  change of this nature?
• What if any of our business enterprises are
  truly prepared for outsourcing?

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Asking the Right Questions How

• How requires addressing every possible
  contingency?
• How requires having flexible design and
  implementation procedures?
• How requires a project plan and a dedicated
  implementation team?
• How means ensuring that all key performance
  indicators (KPIs) are defined and met at
  launch and through continuous process
  improvement?
• How means selecting a vendor that becomes your
  partner and trusted advisor?
• How means constant evaluation, assessment, and
  strategic business reviews with all critical
  parties?

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Asking the Right Questions Where

• Where requires extensive-
• Research
• On-site visits
• Due diligence
• Assessment of the BPOs-
• Management
• Operational models
• Training
• Culture
• Attrition rates
• Defining key business parameters-
• Locations
• Technological infrastructure
• Skill sets, experience, education

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Pitfalls

• 1. Over Management or Adversarial Role
• 2. Forced Entry
• 3. Cost Benefit vs. Process Implementation
• 4. Customer Facing Issues
• 5. Unrealistic Targets

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Conclusions
1. Structured Partnership Agreement 2.
Understanding Client, Culture, and Customer 3.
Process Evaluation 4. Mitigation of Risk
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