Skyline Business School
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BPO
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Issue 40
StanChart
to hire up to 700 in India
Scope International, Standard Chartered Bank’s BPO arm plans to expand the
headcount of its Chennai hub by 500-700 people and hike its floor space by
50,000 sq ft this year. The company, which had remained a captive centre for its
parent since its inception four years ago, is also looking for third-party
clients. It is in talks with financial institutions in the US and expects to
sign up with a partner this year.
Mr Sreeram Iyer, who was recently elevated to the position of group head -
global shared service centers, Scope International, said, “We have achieved
what we had initially set to achieve and now contribute net savings of $80
million to Standard Chartered Group each year.”
These savings were achieved by moving work from a high-cost economy to a
low-cost economy. It has also helped the bank to improve operational efficiency
in all key metrics, he said. “Going forward, we would like to leverage this
capability and the group’s network to offer services to third-party
clients,” Mr Iyer said. The clients are likely to be from the US. This is a
market in which Standard Chartered Bank does not have a significant presence,
and hence the issue of conflict of interests would not arise, he added.
Source: Times News Network, February 24th
East
Europe to beat India as BPO hub
In a clear threat to India’s status as the most preferred outsourcing
destination in the world, Eastern Europe is on the move. The region is poised to
take on India and China and could easily become a major offshoring centre, says
a report from the Economist Intelligence Unit. The Czech Republic leads the
Eastern European challengers and is currently placed third globally, behind
India and China. The next challenger is Poland at the fifth spot.
The good news is that India will continue to dominate the offshoring market with
its low labor costs, developed legal system and English-speaking graduates, the
EIU said. China will benefit from its abundant supply of low-cost labor, but a
lack of English skills will keep it behind India, it says.
However, Eastern European countries are poised to take more offshoring business
due to their attractive regulatory environments as well as close proximity and
cultural ties to the US, the EIU has predicted.
Currently, Eastern Europe attracts only a small number of offshoring
projects.
Asian dominance of the offshoring arena right now is quite clear, with Asian
countries occupying six of the top 10 locations.
Among developed nations, Canada is the most popular and the only OECD country in
the top 15.
The report, which includes a new ranking of 60 global offshoring environments
and a survey of 500 senior executives, concludes that companies will
redistribute more service functions to Asia and Eastern Europe over the next
three years.
Source: The Economic Times, February 23rd
'Technology
investment a must for BPO cos'
Contact centers to need to invest in technology for
continued market leadership and greater success, advises a speaker at the
Customer Contact World Event
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."
"India-based outsource service providers have emerged as the premier
vendors in this global industry," said Genesys Telecommunications
Laboratories India MD, Sanjay Goyal. "Critical to their continued success
is the need for intelligent infrastructure and services that support real-time
interactions between the enterprise and outsourcer.
Source: www.ciol.com, February 23rd
Nasscom
study outlines outsourcing challenges ahead
The ITES and BPO companies face important challenges such
as privacy, rising interest rates, supplier risks, regulations and technology
convergence, says Nasscom. In its recent study on ‘Outsourcing
challenges in 2005’ for the ITES/BPO sector, the apex body of the software
industry found that while there will be an escalation of outsourcing by
companies worldwide and the ramping up of existing operations, the year 2005
will also witness few developments including consolidation of outsourced work,
the rise of the captives, apart from the above challenges.
According to the study, privacy is expected to be a key
issue for both customers and suppliers, which will come to the fore in
2005. Quoting analysts, NASSCOM said that privacy laws will impact outsourcing
in a very direct way. Currently those companies in the US and non-US countries
are expected to face problems in synthesizing those laws with the laws of
countries from which the private information originates, the study pointed out.
During 2005, customers are expected to exercise caution in sharing their
intellectual property and other sensitive data with companies that don’t
comply with the privacy protection laws, the study warned.
Similarly, disentanglement issues are expected to become an issue during the
year due to the new rising interest rate environment. All of a sudden the risk
calculations will change. When the prospect of future mutual benefit goes away,
so does the glue that holds both parties together, the study said adding the
companies will need to be cognizant of the risks involved in early termination
of their outsourcing contracts when making decisions.
Another factor is suppliers’ risk. As far as
buyers are concerned, suppliers could prove to be a problem area during 2005. As
offshore outsourcing picks up during the year, the laws of supply and demand
will take over. This trend is expected to lead to a situation where there may
not be enough high quality service providers to handle the work, particularly
for the small and medium enterprise customers, the study maintained. Buyers will
ask their suppliers to prepare service auditor reports, a costly process that
will include having an accounting firm visit the supplier’s facilities to
evaluate its financial controls and processes.
Source: www.financialexpress.com, February
26th
Indian
BPOs to hire 1 lakh more in '05
Despite the ongoing backlash against outsourcing, Indian call centers are all
set to add another 100,000 seats this year, much higher than the 70,000 seats
that the country added in 2004. This was one of the major findings by a recent
research report prepared by human resources firm Kelly Services after a survey
done in four countries - India, China, Korea and Philippines. This growth
represents around 64%, which is the highest across the region, the report said.
On the cost front too, Indian centers are ranked the most competitive among the
four countries with salaries paid to agents in India being even cheaper than
Philippines.
Considering the dollar-converted rates, the report stated that Indians are paid
$ 0.30 per transaction, the lowest in the region covered, whereas Koreans get
paid the most at $1.26.
In terms of manpower issues, the report stated that India experiences a high
level of agent turnover and competitive poaching and that the pool of agents is
large enough to accommodate this movement. Only 11% of call centers are facing
recruitment issues, while larger centers find it more difficult to
recruit.
On training patterns, the report said that agents in India have the highest
number of training sessions (24 days), while agents in China only receive 11
days’ training, where the segments that offer maximum training are banking,
finance & insurance and business services.
Source: www.indiatimes.com, March 3rd
Indian
outsourcing firms battle to keep staff
Indian back-office firms face a growing challenge holding on to employees, even
as they hire tens of thousands every quarter. Some firms say they need to
replace up to half their people every year. Call centers, which snap up
English-speaking youngsters with the gift of the gab, are the worst hit, and
they account for nearly 40 percent of back-office jobs in the country.
"It is a major problem," said Jerry Rao, chairman of back-office and
IT services firm MphasiS BFL Ltd. Staff tend to account for half of a
back-office operation's costs, according to research firm Evalueserve, and the
battle for talent has led to a 10-15 percent rise in employee salaries.
Recruitment and training makes up 3 percent of the overall per employee cost of
about $13,000 per year, including administration and telecoms costs, according
to Evalueserve. As the industry clocks up 50 percent-plus growth, demand for
quality personnel is outstripping supply. Employees often hop to new jobs for
slightly more money, and many do not view back-office work as a career.
But that is not always enough.
Spectramind, the back-office arm of India's third-largest software services
company, Wipro Ltd., reported a 90 percent annualized attrition rate at the end
of December.
India's business process outsourcing sector has 400 players, though the top 20
account for nearly half the sector's revenue, seen touching $5.7 billion this
year.
Source: www.reuters.co.in, March 3rd
Gecis
may take a call from small towns
With its net now cast wide to include global customers beyond GE, the company is
looking at setting up additional centers in India, as also in Africa and Europe.
Pramod Bhasin, president and CEO Gecis, said while the company was certainly
opening a centre in Kolkata and was also considering Chennai, smaller towns were
definitely on the anvil.
“Jaipur has been a huge success for us. I don’t see why we cannot replicate
this success in Coimbatore or Goa. Admittedly, it’s harder to set up the
centre in such cities initially but it works great in the long run. Training
periods are longer but attrition levels are lower so it pays off,” said Bhasin.
As for Europe, he said Gecis was looking at a location beyond Hungary. “It
will most likely be Romania, because there’s good engineering and IT skills
available; in addition, the required language skills make it an attractive
destination,” he added.
In Africa, Gecis is seriously considering Tunisia, where French is spoken
fluently. The company is looking at an initial seat capacity of 500, and will
most probably start operations from scratch.
China is another country where Gecis plans to expand to other cities beyond
Dalian in order to cater to markets in Japan and Korea. “About 20-30% of our
work is already global. And we will continue to expand everywhere,” said
Bhasin.
Asked about high-end back-end work being done from India, Bhasin said in the
area of accounting and finance, they were actually closing books of accounts for
companies from the centers in India.
Gecis employs over 17,000 staff at five BPO centres in India. The company is
targeting a 25% increase in revenues for 2005.
Source: Times News Network, March 4th
Reliance
plans BPO push
Services to be offered to customers outside Reliance group companies. The
Reliance group is moving into BPO in a big way. Reliance Infocomm, its
telecommunications arm, is charting the strategy.
Reliance Infocomm has a captive centre, but now plans to extend BPO services to
customers outside the group. It intends to leverage its expertise in telecom,
manufacturing and financial services and offer services across the board,
ranging from customer services to value-added services.
The voice part of the BPO business is being conducted through Reliance
Infostreams, which provides services to customers of group companies like
Reliance Infocomm and Reliance Energy. Reliance Infostreams has just added a
leading US-based bank to its client list. Infocomm has a 3,200-seat facility at
the Dhirubhai Ambani Knowledge Centre in Navi Mumbai. It recently set up another
600-seat office in Chennai. It is now planning to add 1,200 seats this year in
Kolkata and the National Capital Region.
Source: www.business-standard.com, March 4th
Gartner
Says 80 Percent of Customer Service Outsourcing Cost Cutting Projects Destined
to Fail
Gartner research director Alexa Bona presented ‘The myths and realities of
customer service outsourcing’ at its Customer Relationship Management Summit
2005 in London.
Key findings:
According to Gartner, companies
that outsource successfully can achieve cost savings of 25 to 30 percent.
However, Ms Bona warned that a poorly managed model can reduce the quality of
the customer experience, dilute the brand values of the company and fail to
deliver cost savings. She also pointed to risks related to knowledge management
and retention, accentuated by the fact that customer service outsourcing
providers have staff attrition rates of up to 70 to 80 percent, compared to an
average of 19 to 25 percent in in-house contact centers.
Source: www.crm2day.com,
www.management.silicon.com, March 4th
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