Skyline Business School
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Skyline Business School |
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BPO
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Issue 39
Is
the BPO fort crumbling under attrition fire?
BPOs all over India are reeling under high attrition rates. According to
Nishchae Suri, consulting leader, Hewitt Associates, attrition rates in the
industry vary from 24 per cent to 40 per cent. HR managers are under intense
pressure from international clients to increase and maintain the count on the
floor. Says C K Taneja, managing director, Green Field Online, a market research
BPO: "Sometimes the executive hired and trained for process A, is shifted
to process X, Y or Z at the end of his training. It's highly unethical and
unfair to the employees. But reality is cruel."
Attrition has a tremendous impact on the DMoQs (Delivery Model of Quality) that
require an agent to pick up a phone within three rings. DMoQs goes down sharply.
The C-Sat (Customer Satisfaction) scores also deteriorate. The AHT (Average
Handling Time) shoots up when an entirely new person is kept to handle calls.
Says Ian Stern, co-promoter, Holistic Enterprises, a voice and accent training
firm: "An executive starts becoming 100% productive
only after six months of taking calls. And if he is replaced by a new trainee,
the productivity levels depreciate suddenly."
Employees leave due to monotony of the job and fear of stagnation. Social
perceptions also matter. Most parents don't know what happens in a BPO. Some
wrongly perceive it as a receptionist's job. Says Hewitt's Suri, "BPOs can
curb attrition by offering a better work-life balance. They should concentrate
on leadership and brand building as people prefer to be associated with a
brand." Respect for the job should be created by BPOs. The youth should
feel proud to be a part of the billion-dollar industry. Make the work
challenging, provide opportunities for vertical and horizontal growth and hire
right is the mantra. A strict 'No' to people with less than one-year experience
should be the norm. Family members of employees should be involved in the
induction process. They should be given a feel of what happens in a BPO.
Source: Indiatimes News Network, February 10th
Now,
work-from-home BPO jobs
People who reach Esther DeJesus when they call Office Depot Inc.'s customer
service center have no idea that she's sitting at home in a room decorated with
pictures of Garfield and Betty Boop. The Orlando, Florida, resident, who works
on the retailer's account for call center contractor Willow CSN, is one of a new
breed of customer service representative. After some unsuccessful attempts to
move call centers abroad, U.S. companies are shifting some of that work back to
this country -- and into people's homes.
Besides Office Depot, JetBlue Airways Corp., General Electric Co. and Staples
Inc. are among the companies that have been using stay-at-home customer service
representatives as an alternative to traditional call centers in the United
States, India and the Philippines.
The arrangement also allows employers to schedule people
in small part-time slots when call volume is higher, rather than hiring regular
call-center workers who get paid whether they are busy or not.
To work at home, employees need a computer that meets certain
specifications, such as high-speed Internet access. After taking a training
course, they're ready to start answering calls that are routed to their home
phone.
Companies are passing on some of the savings they're realizing in rent and
office equipment. Stay-at-home customer service representatives generally
command $13 to $14 an hour, while the industry rate for call center workers is
$8 to $9. Office Depot plans to close nine of its 11 call centers by the end of
September and replace them with home-based workers. Office Depot said it halved
its attrition rate to 30 per cent almost immediately after it started using
home-based workers 3 1/2 years ago. Now attrition has fallen even more, to a low
teen percentage rate, allowing the company to save training and recruiting
expenses.
Source: Reuters, February 9th
Cognizant
to hire 7,200 in '05
Cognizant Technology Solutions has recorded a 59% growth in topline for the year
ending December 31, 2004, at $586.7 million over $368.2
million recorded for the previous year. Cognizant has put out a revenue
guidance of $845 million for calendar 2005, indicating a 44% year-on-year
growth. It expects to add 7,200 employees in 2005, taking
the total head count to over 22,500 by the end of 2005. Last year, the
company added over 6,000 employees increasing the total count to 15,300.
“We are pleased with Cognizant’s strong results in the fourth quarter and
full year of 2004, which outpaced the performance of the industry overall,”
said Mr Lakshmi Narayanan, president and CEO of the company. “We attribute our
growth to a number of factors, all of which reflect the success of our focus on
providing customers with business-driven technology solutions through our
onsite-offshore model,” he said.
Source: Times News Network, February 11th
Nipuna
to hike staff to 2500
Besides adding 300 people a quarter, the company has plans
to start centers in and outside India
Nipuna Services Ltd, the fully owned BPO subsidiary of Satyam Computer
Services Ltd, is on an expansion mode. Started in June 2002, the company plans
to double its headcount from the present 1,350 and also set up centers in
Chennai and Pune. Equally, it intends to start up four more centers outside
India. "Presently, we have two centers - one in Hyderabad and the other in
Bangalore. While the 350-seater Bangalore center has around 180 associates, the
Hyderabad center has 1,170. We intend to take this combined employee base to
2,500 by next year," said Nipuna CEO Dr Prakash Challa. "In order to
reach this number, we need to hire at least 250 to 300 associates per
quarter," he added. “Besides, we also intend to mark our presence outside
India by setting up offices in Malaysia for the Asia-Pacific region, in
Thailand, Hungary for European customers, and Brazil for South African
clientele."
Nipuna manages and administers non-core yet vital business processes for
verticals as diverse as insurance, healthcare, banking, telecom and
manufacturing. Being on the verge of completing two full years of operations,
the company has 20 clients. "It may be recalled that we have added 16
clients in just one year that only signifies the growth for Nipuna," said
Challa.
Source: www.ciol.com, February 11th
India
IT, BPO to lead Jan-Mar hiring
India's information technology and business process outsourcing (BPO) industries
will be the biggest creators of new jobs in the January-March quarter, the
Indian unit of Dutch staffing firm Vedior said.
Job creation from outsourcing is in turn fuelling consumption in other parts of
India's $600-billion economy and the IT industry estimates that it generated 3.5
percent of the country's gross domestic product in the last fiscal year.
"Employment in the country's organized sector in the current quarter is set
to grow at the fastest level ever and will be led by 10 percent growth in the
knowledge sector," K. Pandia Rajan, managing director at Ma Foi Management
Consultants Ltd, said.
India's National Association of Software and Service Companies (NASSCOM) said
this week BPO, in which companies contract out entire processes such as pension
administration is projected to end March 2005 with 348,000 employees, up from
253,500 at the end of March 2004.
Nasscom also said 10 percent of total automobile demand is
coming from IT professionals and 15-20 percent of airline seats are being taken
by them.
Source: Reuters, February 11th
Pakistan
aims for bigger slice of outsourcing pie
Spurred by India's giant steps in IT outsourcing, Pakistan is looking to strike
it rich by using its English speaking manpower and cost arbitrage to provide
tech services to global firms. Pakistan has launched an aggressive effort to woo
global corporations to farm out technology tasks with a view to creating
hundreds of thousands of new jobs and rake in billions of dollars in foreign
exchange.
"We are not looking at competing with India but we definitely want to
create our own space in the global outsourcing business," said Jehan Ara,
president of Pakistan Software Houses Association, the premier IT industry
umbrella group.
The country's IT industry leaders say it has all the strong fundamentals that
have turned India into an electronics housekeeper to the world -- a large pool
of qualified English speaking manpower and sharply lower cost of operations.
Pakistan has nearly 60 companies operating in the BPO space, as compared to over
400 in India that handle a wide range of services for overseas clients such as
customer care, finance, administration, content development and payment details.
The IT industry in Pakistan employs some 35,000 professionals, while in India
over one million people are directly employed in the sector.
"What we are trying to tell the global corporation is don't put all your
eggs in one basket. They must look at Pakistan as an alternate outsourcing
destination in Asia," said Ziad Bashir, director of Karachi-based Arwen
Tech Ltd.
According to Ara, while the Pakistan government has taken a series of
initiatives in recent years to boost the attractiveness of the outsourcing
sector, it needs to do a lot more.
"Improvement in physical infrastructure and the education sector are the
two areas that need massive investments over the next few years. The government
also has to create an environment for inflow of massive overseas
investments."
Source: Indo-Asian News Service, February 12th
Indian
IT firms bet big on knowledge process outsourcing
The Indian IT sector plans to strike it rich in a new breed of high-end
knowledge-based outsourcing as global corporations move process like data and
intellectual property researches to offshore locations.
This new breed of knowledge process outsourcing (KPO) comprises companies
providing higher-end research and analytical based services to overseas clients
in a wide spectrum of business areas.
These include basic data research, integration and management, market research,
equity research, engineering design, animation and simulation, medical content
and services, remote education and publishing.
Other areas with significant latent potential for KPO include pharmaceuticals,
biotechnology, legal support, intellectual property research, and design and
development for automotive and aerospace industries. According to the National
Association of Software and Service Companies (Nasscom), the total market size
of KPO business in India may rise to a staggering $15.5 billion, up from $1.2
billion now. "India can emerge as a major KPO player in the global arena by
leveraging the intellectual capital and the power of the Internet to offer
quality research at value prices," said R. Sivadas, director and CEO of
Scope e-Knowledge Centre.
Source: Indo-Asian News Service, February 13th
'Technology
investment a must for BPO cos'
Contact centers to need to invest in technology for
continued market leadership and greater success
Genesys Telecommunications Laboratories, Inc. chairman Ad Nederlof
encouraged India's booming contact center industry to look outside of low cost
labor as the key to increasing their competitiveness, while speaking at the
Customer Contact World Event. He added, "The India-based outsourced contact
center industry has traditionally held a low cost labor advantage over other
industry players, which has helped them win the competitive edge. However, with
the emergence of other low-cost labor alternatives in the market, these
organizations need to look towards investing in technology as the key to
continued market leadership and greater success." According to him, Genesys
open software contact center solutions provide the widest choice of integration
enabling these providers to quickly and cost-effectively integrate with
enterprise infrastructure for real-time communications. This will help outsource
service providers to move towards building customer interaction centers to
bridge the information and communication gaps throughout the enterprise helping
cut costs, while enabling faster, better service.
Source: www.ciol.com, February 23rd
BPO
firm Allsec files red herring prospectus with SEBI
BPO service provider Allsec Technologies Ltd has filed a draft red herring
prospectus for its forthcoming public issue with the Securities and Exchange
Board of India. The company proposes to issue 3,141,200 equity shares of Rs 10
each for cash at a premium to be decided through a book-building process, it
said in a release here. It has reserved 1,49,600 equity shares to be allotted to
the employees and of the balance equity shares on offer, 50 per cent have been
reserved for allotment to qualified institutional buyers on a discretionary
basis and 25 per cent for non-institutional investors. The balance 25 per cent
would be allotted to the retail investors on proportionate basis. The
book-running lead managers for the issue are IL&FS Investmart Ltd and Kotak
Mahindra Capital Company Ltd.
Source: Press Trust of India, February 12th
Mphasis
acquires British consulting firm
Mphasis BFL group, a leading provider of IT and outsourcing services, Monday
announced the acquisition of Princeton Consulting,
a London-based specialist-consulting firm, in a deal for 7.73 million pounds.
Mphasis chairman and CEO Jerry Rao told reporters here the deal included a cash
component of 3.23 million pounds, while the net value
adjusted for surplus cash with Princeton was 4.5 million pounds.
"This latest acquisition will offer us access to business process
improvement consulting skills as well as an established client base. Princeton
will broaden our service offering in the IT and BPO segments in the UK and other
European markets," Rao said. With a revenue run-rate of six million pounds,
Princeton provides customer relationship management solutions and process
improvement services to blue chip and high growth firms in Britain and Europe.
The seven-year-old firm has domain expertise in multi-channel customer service
and support, sales force management, content management and business
intelligence.
This was the second acquisition made by Mphasis during fiscal 2004-05, with the
first one coming in April last year when Bangalore-based Kshema Technologies was
bought out in a cash-cum-stock deal for $21 million.
The Princeton acquisition, to be completed in a week, will bring about 100
employees on board for Mphasis, including 33 techies from its Indian subsidiary
in Bangalore. Its German subsidiary, however, has been wound up.
Source: www.webindia123.com, February 14th
Job
quotas to snub India's BPO boom
The government’s idea of introducing job reservations in private sector can
prick the offshore contracts for IT and IT enabled Services (ITeS) putting
question mark over the future of BPO sector in India. The industry has flagged
the government that job reservation in the private sector domain could result in
‘caste quotas’ against Indian companies as a non-tariff barrier in a sector
that is already sensitive to loss of jobs abroad. In a strategy paper prepared
by Confederation of Indian Industries (CII), the industry body has stated that
allocation of jobs on the basis of caste or community directly violates many of
the work contracts that India’s IT and ITeS companies have entered into with
the US and European clients. The industry has been vociferous on the issue that
they are not ready to accept forced reservation. According
to CII, many US and European Fortune 500 companies, who outsource their
backoffice and research work to India, provide contracts on the pre-condition
that the vendors will be non-discriminatory in their recruitment. The
view is that if reservations are forced, multi national clients of Indian IT
companies could come under pressure from their shareholders to cancel offshoring
contracts. The industry has stated that the western governments might even use
‘caste quotas’ as a non-trade barrier against the IT industry as they have
against the carpet industry.
Source: The Economic Times, February 15th
Data
security crucial issue for BPO
Data security could become a crucial issue for companies outsourcing their
operations to India, said Ian Marriott, Vice-President and Research Director,
Gartner. He warned that data security was a sensitive issue in the West, and
could become as volatile as the anti BPO backlash in the run-up to the US
elections, in the future. Marriot, however, added, "India is pretty good in
data security." He, said, India's leadership in business process
outsourcing was clear and will continue in the foreseeable future.
Sounding an optimistic note about the industry's future he said, "Most
countries, like the Philippines, won't have the scale or scalability, which
India offers," he said, commenting on the industry's future.
Also commenting on technological changes in the industry he said,
"Technology will strip away the need to train 90 per cent
people."
Source: www.sify.com/finance,
February 15th
Dubai
Outsource Zone opens for registration
Dubai Outsource Zone (DOZ) today announced that it has
officially opened for registration to companies across the spectrum of the
outsourcing sector
Announcing this, Ismail Al Naqi, Director of DOZ said today that the new
initiative's key focus is on the mid and high-end Business Process Outsourcing (BPO)
sector. 'Dubai Outsource Zone is keen to attract companies in the higher-value
skill-intensive outsourcing sectors in areas such as finance, accounting, IT,
payroll processing, engineering, R&D, and design. Because of its
infrastructural strengths, DOZ also serves as an ideal centre for disaster
recovery facilities for outsourcing operations located offshore elsewhere in the
world,' he said.
Dubai Outsource Zone offers the same financial benefits offered by the free
zones including 100% tax exemption, 100 % ownership and 100 % repatriation.
Support services offered by DOZ are aimed at reducing operational hassles for
outsourcing service providers and helping them concentrate on their core
business.
Source: www.ameinfo.com, February 15th
Wake
up big boys, BPO ads are hot
When you open the appointment section in a newspaper or surf any job website,
chances are you will be bombarded with a plethora of ads for openings in BPO
companies. No wonder, the advertising by BPO firms
is growing six to ten times faster than the ad industry average. The BPO-led
advertising is estimated to be expanding at 60%-100% rate though the overall ad
industry is growing at a normal 10%-12%. As per Nasscom, there are more than 425
ITeS-BPO companies in India. From $2.5 billion in
2002-03 to $3.6 billion in 2003-04, the ITeS-BPO bandwagon is expected to cross
$5.1-billion revenue mark this year. With extremely high growth rate and equally
high employee attrition rate, BPO firms are constantly required to keep looking
for quality bulk manpower. The BPO market is dominated by big
players including WNS Group, Wipro Spectramind, IBM Daksh e-services,
Convergys India, HCL Technologies BPO Services, etc. Each of them invests Rs 3
crore-Rs 5 crore on an average annually in communication activities. Even
smaller players like Global Vantedge, Vanguard Info-Solutions and Vertex spend
anything between Rs 1 crore-Rs 2 crore in advertising. Between 85% and 95% of
the ad budget goes in recruitment ads in the print media alone. The collective
spend of BPO firms in advertising is estimated to be between Rs 40 crore and Rs
50 crore currently, as per market estimates. And this year it is expected to
reach the Rs 100-crore mark.
Source: The Economic Times, February 21st
Prepared by
Abhimanyu Puri, BBA (MAHE) 2nd year
Skyline Business School
Hauz Khas Enclave, New Delhi 110 016
Tel: 2686 4848, 2652 4399
www.SkylineCollege.com