BPO |Update|

Issue 42

Women can now 'officially' work in night shifts
With the cabinet deciding to amend the Factories Act, 1948, women can now work between 10 p.m. and 6 a.m. shifts
Providing a boost to the mushrooming BPO segment in the country, the government has decided to amend the Factories Act, 1948, thus allowing women to work in late night shifts. This amendment comes as a breeze of fresh air for the BPO/ITES industry in the Indian region – as the BPO or the ITES units had to take approvals from the state government under the shops and establishment act or the factories act.
"Our nature of work doesn't allow us to have a time bound approach whether it is for women or it is for men. We welcome this move wholeheartedly. Now the BPO units won't have to run around for approvals and exemptions for allowing women to work in the late night shifts," informed VP of HR and training at Keane Worldzen Debasish Das.
With the cabinet deciding to amend the Factories Act, 1948, women can now work between 10 p.m. and 6 a.m. shifts. Interestingly, women form the lifeline of the BPO and ITES industry where an estimated 45 percent to 50 percent women are employed.
Providing flexibility for employment of women during night hours, the amendment of the Factories Act is expected to encourage BPOs and other ITES units to employ more and more women. "There are a lot of BPOs that are looking for expansion. This will encourage them to consider women for night shifts," Das added.
"This amendment would greatly benefit women working in Special Economic Zones and the IT sector in general, even a lot of services companies are engaged in night working environment – so global delivery would become easier," informed an industry analyst.
Source: www.ciol.com, March 30th

Gartner Consulting Says Finance and Accounting BPO is a Key Enabler for Increasing a CFO's Efficiency
Chief financial officers (CFOs) should implement finance and accounting business process outsourcing (BPO) to allow them to spend more time on strategic activities, according to Gartner Consulting. Gartner Consulting recommends that CFOs consider delegating transactional tasks to a third party whose core business is finance and accounting BPO.
"Outsourcing some of the finance and accounting processes that are focused on tasks such as accounts payables, expense management, and payroll, frees up the CFO's time," said Michael Montonen, vice president for Gartner Consulting's Strategic Sourcing Practice. "The CFO can then focus more on activities such as planning, activity-based costing, process metrics and decision support at the CEO and business unit leadership levels."
"To achieve true shareholder value, the efficient CFO has to focus on decision support, a strategic activity that makes it possible to focus on analyzing and interpreting financial data, not necessarily producing it," Mr. Montonen said. Outsourcing capabilities to support processes for financial transactions and management have matured substantially, with financial data often generated and reported now by service providers, he said.
Gartner defines BPO as the delegation of one or more IT-intensive business processes to an external provider that, in turn, owns, administers and manages the processes based on defined and measurable performance metrics. BPO has many markets. They typically include staff functions such as human resources, finance and accounting, and contact centers or vertical specialization such as insurance claims processing or banking payments.
Source: www.tmcnet.com, March 30th

RP seeks more EU outsourcing
The Philippines is embarking on an aggressive promotion in Europe to capture a significant share of the $64-billion worth business process outsourcing market there as companies are forced to cut costs
Last year, the BPO market in Europe was estimated to have reached $198 billion. But the Associated Chambers of Commerce and Industry of India said the Europe BPO market this year was estimated to decelerate to $64 billion only with $20 billion worth still concentrating in the UK market.
Trade and Industry senior Undersecretary Thomas G. Aquino said the Center for International Trade Expositions and Missions (CITEM), the Board of Investments and the Business Process Association of the Philippines are sending a trade mission to Europe and participate in the OutsourceWorld in June this year.
There is an urgent demand for European companies to cut costs this to farm out their businesses outside. With our well-educated English-speaking low-cost workforce, we are better positioned to seize the outsourcing opportunities in Europe," Aquino said.
In Germany alone, the banks there are leading a trend of handing over the entire business process to third parties. Technology Partners International (TPI) said that, Germany now has 13 percent of the global outsourcing market, behind the U.S. at 42 percent and the UK at 17 percent.
There is also a wide acceptance of the BPO practice for companies in France and the Scandinavia and Nordic countries.
Outsourcing has been proven to be a viable option among businesses, Aquino said.
The following have been identified for outsourcing: front office/customer management; mortgage processing, life policy administration, finance/procurement and human resource services. Other outsourcing areas are the support functions for IT and communications, and facilities and property.
Top outsourcers in Europe include EDS, IBM, TSystems, CSC, Atos Origin, CGE&Y, Accenture, Fujitsu, Capita, HP, SBS, Getronics, Logica CMG and Unisys.
To date, India has captured 45 percent of the outsourcing deals in Europe while Eastern European countries have been taking 18 percent of the market share, according to A.T. Keanney’s Outsourcing study in 2003.
Source: www.mb.com.ph, March 30th

Outsourcing May Be a New Enterprise Ball Game
"In rightshoring, each interaction is sent offshore only after a thorough analysis of how best suited it is for a particular locale or region," says Frost & Sullivan senior analyst Katrina Howell. "For example, while India is excellent for technical support queries, sales-oriented interactions can remain in North America."
The outsourcing of certain business processes, along with the outsourcing of such functions as manufacturing, research and development, has become a standard practice for most enterprises. But a series of new studies tracking the latest trends suggest that there is a shift in the landscape causing businesses to rethink their strategies when it comes to outsourcing key process and functions.
Worldwide business process outsourcing, or BPO, will reach US$133.7 billion in 2005, an 8 percent increase from 2004 revenue of $123.8 billion, projects Gartner.
The growing demand for BPO service providers to take over functions will necessitate certain changes in buying behavior, Gartner says.
As more deals are completed, Stone said, vendors will be compelled to focus attention on their new operations and will be less inclined to bid on further projects unless they are highly likely to result in winning deals. The window of opportunity will not stay open indefinitely.
"If a company is considering new BPO projects, it must begin to develop a BPO strategy and make decisions soon," said Robert Brown, Gartner principal analyst. “The sooner prospective buyers can start meaningful discussions with providers, the more likely they will be to get the BPO vendor's attention." At the same time, Gartner notes, prospective buyers need to make sure that the BPO provider in question has qualified personnel, especially as new firms set up operations to meet the growing demand for BPO services.
Rightshoring is still an emerging concept. The majority of firms still believe that shipping certain processes overseas is better for the firm automatically since it saves on costs. Yankee Group predicts the trend will continue, and the current 40,000 contact-center seats in India will increase to 110,000 by 2007. For companies committed to offshoring, the focus needs to be on improving management of the processes involved in handing over operations to a third-party provider.
The issue, according to Yankee's Art Schoeller, is not the cost savings. Rather, it is how well firms manage the process. Companies that choose offshoring must learn to use the services effectively and understand the impact that legislative changes may have on their operations, he cautions.
Source: www.crm-daily.newsfactor.com, April 1st

What's the good word? – Publishing Outsourcing
Publishing houses and content developers worldwide are taking a leaf from the book of outsourcing - and sending work to Indian shores
Amidst all the attention focused on call centers, some Indian companies are steadily making their presence felt in the publishing outsourcing and e-learning domain. Publication houses, educational institutes and content developers in the US and other English-speaking countries are increasingly looking at India as an attractive destination to outsource various parts of their work — from pre-press to proofreading, from template designing to text composition. Publishing outsourcing includes diverse services such as editorial work, page making, typesetting, digitalization of content and warehousing. The work rates charged by companies are either on a per-hour or a per-page basis, depending on the service offered, and the type of business model. The rates can range from $7 to $18 per hour or $7 to $22 per page.
"The idea is to save 40 to 50 per cent of the cost for foreign clients," says Jayraj, India Manager, Publishing Offshoring, Aquent.
Work may be outsourced to offshore captive units or third-party units. In the offshore captive model, big publishing houses set up a wholly owned subsidiary in the country and the majority of services are done in-house.
However, it is possible that some services, such as conversion of content into digital form or certain editorial work, may be outsourced.
In the third-party outsourced model, most of the work being done is for other publishing houses.
The `Content Management' wing of Mumbai-based ITES and BPO provider Datamatics Technologies has four major publishing houses as its clients. "We specialize in scientific work, which is more complex," says Kanodia. The company provides a range of services under one roof, including data enrichment, editorial services, and content-delivery services.
The time zone difference between India and the US is an advantage in projects where the work is of a 24-hour cycle basis.
But it is the abundance of an English-speaking, educated population that makes the country attractive, in the long run.
Source: www.thehindubusinessline.com, April 4th

Regulations and compliance: BPO.co.in
In BPO, service providers have to abide by the regulations that their clients follow. The BPO industry is driven by technology. The technology component of BPO will only increase as the industry moves from low-end services such as customer support and medical transcription. Right now, the shift towards premium, high end services--research & analytics, level 3 (and above) IT helpdesks, medical insurance processing, and media services--is happening.
"Monitoring processes such as IT spending, change management, system security and SLAs is the order of the day. Technology has to put in place along with policies and procedures to ensure that there is compliance in all areas," said Rajiv Gerela, GM-Technology, Wipro Spectramind Services Ltd.
Third-party outsourcing centers have to keep themselves compliant with the latest quality and technological regulations in order to stay competitive in the global marketplace.
Data privacy and integrity concerns that relate to outsourcing are the biggest concerns for Indian BPOs clientele. This is especially true in the case of businesses that have IPRs (Intellectual Property Rights) to protect or banks and others that must maintain the confidentiality of their customer records. Implementing ethical practices for client confidentiality etc. are almost mandatory.
Fraud is an ever-present problem. "Strong security policies have to be there in an ITES-BPO organization. The issue of client confidentiality--addresses, phone numbers, credit card information etc.-must be addressed," said NT Arun Kumar, Senior Vice President, Global Operations, OfficeTiger.
In terms of global certifications and standards, Indian BPOs are at par with the rest of world. Most Indian BPO companies are BS 7799 and ISO 17799 certified.
The principal regulations that affect Indian BPOs are the Sarbanes-Oxley Act, HIPAA (Healthcare Insurance Portability and Accountability Act), GLBA (Gramm Leach Bliley Act), UK Data Protection Act, FDCPA (Fair Debt Collection Practices Act) and the US-EU Safe Harbour Agreement. Most of these relate to Indian BPO's biggest clients, i.e. The US and the UK.
Although the percentage of Indian BPO companies that are complying with these regulations is minuscule, the majority of them are partially compliant on the technology front.

The compliance initiatives of most BPOs include the following:
·Assessing internal controls
·Managing and optimizing financial reporting processes
·Consolidating information for managing business performance
·Improving business intelligence
·Providing financial models for high-risk operations and programs to manage risk
·Improve records management and audit trail
·Ensuring fraud detection and prevention

Some of the main certifying authorities or agencies used by Indian BPO organizations are:
·BSI (British Standards Institute)
·DNV (Det Norske Veritas)
·STQC (Standardization Testing Quality Certification), Government of India
·KPMG
·Ernst & Young
Source: www.networkmagazineindia.com, April 5th

Considerations for Business Process Outsourcing
"Outsourcing facility managers have a lot on their plate, a lot to distract them," B.R. Chandra Shekar of eBusiness India said. In his experience, "There needs to be a project manager assigned at the outsourcing facility with specific responsibility for a client's project, otherwise an outsourcing project can go off course, particularly at a larger facility."
Business process outsourcing (BPO) facilities, which handle non-voice work, are easier to manage than offshore call centers. This is because of the nature of the work itself as well as the human resource issues associated with call centers in emerging economies.

Common types of BPO work are:
·E-mail support and Web-based chat.
·Data conversion.
·Medical billing.
·Insurance claims processing.
·Mortgage underwriting.
·Data entry.

According to Vasant Subramanian, the manager of an InternationalStaff.net contract facility in Kolkata, India, successful ingredients for high volume BPO work, such as insurance claims processing and medical billing, are:
·Define procedures.
·Make certain that both the outsourcing facility and the client agree on the procedures to be followed.
·Implement those procedures correctly over time.
·Establish metrics (quantifiable output parameters).
·Put back-end procedures and paperwork in place.
·Institutionalize a training system.
·Monitor to ensure that procedures are followed and metrics are achieved.

When an outsourcing facility merges multiple job descriptions, this can lead to confusion, for example if quality assurance (QA) and management information systems (MIS) responsibilities are both assigned to the same manager or department.
Vasant Subramanian has found that BPO staff are easier to manage than call center staff. "Call center staff are like ballerinas," he said, "dancing around and requiring special treatment." BPO staff, in comparison, are older and low key. They work during the day, appreciate routine, and have more realistic outlooks.
Source: www.ecommercetimes.com, April 5th

Global expenditure on HR outsourcing will increase by 27% this year
Hewitt maintains lead over rivals IBM, Accenture, ACS and Fidelity
New research from the US-based Yankee Group's Multi-Discipline BPO Practice Research has found total global expenditure on HR BPO will increase by 27% this year to surpass $4.6 billion. Forecasts show this rampant growth is expected to continue throughout the next 4 years, at a compound annual growth rate (CAGR) of more than 30%, to reach $14 billion by 2009. HR BPO vendor shares, to be released next week, show Hewitt Associates as the market leader, maintaining its lead over rivals IBM, Accenture, ACS and Fidelity as it continues to dominate the HR BPO market following its acquisition of Exult last year.
North American HR BPO adoption is fuelling the lion's share of this spending, with the market accounting for $3.6 billion of the total, forecasted to increase to $11.5 billion by 2009.
Research from Yankee Group's Multi-Discipline BPO Practice also details the dynamics driving adoption, which has largely come from manufacturing, government and financial services sectors until now. "We are also now seeing real interest in outsourcing the HR function from industries, such as telecom, business services and retail, as they look to strip out cost and become more effective," said Research Vice President Phil Fersht Fersht.
Source: www.finfacts.com, April 5th

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