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BPO
activity is nothing but a third-party vendor being en-gaged
to handle an internal process. BPO services involve outsourcing
business processes or functional areas (such as logistics
or human resources, etc), with performance metrics tied to
the strategic business value of services provided to customer
satisfaction. During the late 1990s, the core competency theory
caught the attention of big corporates around the world. A
lot of companies realized that they could outsource repetitive
activities (i.e., staff functions), which added no value to
the employees and to the company. That would free them to
concentrate on core business issues.
For
a long time now, India is being seen as a good base for software
services, due to the availability of a large pool of inexpensive,
but highly competent English-speaking labor. The growth of
BPO in India started off with the emergence of call centers.
The major players in the BPO sector in India are GE, Daksh,
Bird Group, etc. But the move towards outsourcing business
is not easy as BPO migration can take 12-24 months; customers
and companies themselves like to ensure efficiency in execution,
understanding of processes, and require quality human resources
working in these sectors. Failure to meet the quality and
cost-effectiveness in all areas will affect the relationship
with the clients, as the whole industry depends mainly on
the relationship with the customers.
BPO
activity involves a degree of managerial control and risk
on the part of the provider. Some of the processes that companies
outsource are: HR Processing Solutions, Finance and Administration
Solutions, Procurement Solutions, Customer Services, Telemarketing
Services, IT Help Desk services, Technical Support Services,
Knowledge Services, Insurance Processing, etc. BPO activity,
which earlier focused on sectors like banking, telecom, retail,
and financial services, is now targeting the health sector
also. BPO work in healthcare is set to get a new lease of
lifethe introduction of a whole range of processes like medical
billing, disease coding, forms processing, and claims adjudication
that fetch returns of $16-18 per person per hour are likely
to increase outsourcing opportunities. The American Healthcare
Association estimated the profitability of US hospitals to
fall from 6.1% to 2.8% in 2002. Forty percent of the US hospitals
make losses. |
