BPO FAQ

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What does BPO stand for? What does it mean?

BPO stands for Business Process Outsourcing. Major corporations in the US and Europe are outsourcing their back office operations to India to save costs. E.g. employee payroll is maintained in India for their employees worldwide. Although these jobs usually are not directly IT-related, their data-based orientation often means that they require IT departmental support to be successfully outsourced.

What does ITES stand for? What does it mean?

ITES stands for IT-enabled services. IT-enabled outsourcing can be defined as,
Those outsourcing services that use information technology in the processing and delivery of the service.
Services are typically delivered through a telecommunications or data network, or other electronic media

What is nearshoring?

The practice of sending outsourced functions of any sort, whether IT-based or business process positions, to a nearby country rather than choosing markets such as India or Malaysia that are thousands of miles away. For e.g. US nearshores the work to Canada and Mexico. The physical proximity of these "nearshore" countries is a big threat to India. For more details click here.

What are the reasons for outsourcing?
Reason   Savings
Cost reduction   43%
Focus    35%
Access to special enterprise   32%
Resource related reasons{relieve resource constraints, reduce IT staff and augment IT staff}   51%


What exactly does the BPO market comprise of?

There is a disagreement as to what exactly constitutes BPO. With the rapid expansion of the BPO industry and the extent of its reach, it is becoming increasingly difficult to define what a BPO exactly means. It encompasses a wide variety of activities such as human resource, accounting, financial research, marketing, sales, legal work, logistics and so on. Software services are also regarded as a part of the BPO market by many firms.

What is BPM?

BPM stands for Business Process Management, basically this is about outsourcing the business processes.

Now what is BTO!! ?

BTO stands for Business Transformation Outsourcing. Accenture defines BTO as a strategic partnership between the customer and the outsourcer with the advantage of sophisticated financing mechanisms. It would involve the firm acquiring strategic stakes in the BPO operations that companies have outsourced. BTO involves sharing risks and gains with an outsource business partner, measuring the performance improvement in dramatic gains in the share price, market position and return on capital.

A BTO provides a comprehensive set of services across the entire organisation resulting in a pre-decided output, whereas a BPO is just a contract for outsourcing services/ functions to be done in a specified way. BTOs are more profitable and higher up in the value chain.

BTO also stands for Business Technology Transformation. It is a fast growing nice in BPO and is expected to become a $7 billion industry by 2007 from the current $2.5 million [2004]. BTO can reduce the overhead cost of enterprises by 20%. BTO is about governing the priorities, people and processes of organizations. It aligns IT and business strategy of a company while optimising quality, performance and business availability. According to Yankee Group, BTO enables companies measure and maximise business value across its IT investments.

What is BPO2?

BPO2 stands for Business Process Optimization and Outsourcing.

What is KPO?

KPO stands for Knowledge Process Outsourcing. KPO involves offshoring of knowledge intensive business processes that require specialised domain expertise, thus delivering high value to organisations by providing business expertise rather than just process expertise.

What is MBPO?

MBPO stands for Medical Business Process Outsourcing. Apollo Hospitals is the first major hospital to be getting into this.

Can medical transcriptions be considered as BPO?

Yes.

What is HRO?

HRO stands for Human Resource Outsourcing. HR is getting outsourced to third party providers who can bring in the benefits of knowing the domain.

HR as an activity, it comprises of a group of activities, which include payroll management, training, staffing, benefits administration, travel and expenses management, retirement and benefits planning, risk management, compensation consulting, etc. These activities are outsourced by which the client can concentrate on their core competency.

In the US context, HR outsourcing is a huge area. For instance, nearly about 29-30 per cent of the outsourcing space is HR.

What is RPO?

RPO stands for Research Process Outsourcing. This is popular in the biotech industry. Clients outsource their R&D work. This was termed reportedly by India's biotech queen Kiran Mazumdar-Shaw.

RPO also stands for Recruitment Process Outsourcing. RPO is a key component of Human Resource Outsourcing (HRO). The RPO team basically handles all the recruitment work for their clients.

What is EPO?

EPO stands for Engineering Process Outsourcing. India's engineering process outsourcing (EPO) business would grow 10-fold by 2014 to touch USD 30 billion and make the country a major hub in this area. The global EPO market, on the other hand, will grow to around USD 110-USD 140 billion by 2015, taking India's share to 20-27 percent, said the study conducted by the state-run Engineering Export Promotion Council.

What is ESO?

ESO stands for Engineering Services Outsourcing.

Engineering Services Outsourcing (ESO) includes product design, research and development and other technical services across sectors like automotive, aerospace, hi-tech/telecom, utilities and construction/industrial machinery.

Spending on engineering services was $750 billion in 2004 and is projected to grow to $1.1 trillion globally by 2020, according to a recent Nasscom and Booz Allen Hamilton study - Globalisation Of Engineering Services - the next frontier for India.

ESO also stands for Educational Services Outsourcing. Education is a growing sector and the demand for Indian educators is on the rise. ESO market is estimated to be USD eight billion dollars and Indian teachers are currently offering services to countries like US, UK , Canada , and the Middle East. Though the main demand is from USA, newer markets of Netherlands and Europe too are fast opening up for Indian teachers.

What is defect density?

It is defined as the number of errors per 1000 lines of code. Accroding to Meta Group it has grown from 0.53 (2002) to 0.6 (2003) and is expected to further rise to 0.87 (2005).

What are the 4Es?

Engagement, education, enactment and enforcement framework is expected to ease the concerns of security and data privacy issue.


What is Procurement BPO?

Procurement BPO is transfer of management and execution of one of more procurement activities, transfer of the entire procurement sub-segments or transfer of the entire procurement business functions to an external provider. It offers increased productivity, cost reduction and business transformation to the client. It has a market potential of $10 billion by 2006.

What does BOT mean?

BOT stands for build, operate and transfer. BOT is not applicable only to BPO. Generally clients who wish to have their captive centre partner with a local company which builds and operates the centre for 2-3 years and then transfers it completely to the client.

What is HIPAA?

HIPAA stands for Health Insurance Portability and Accountability Act. The US healthcare industry has been interested in simplifying administrative processes and improving efficiency for several decades. The industry leaders concluded that greater standardization of data and transactions was necessary to improve efficiencies. This conclusion was subsequently memorialized by specific administrative simplification language included in the healthcare legislation called the HIPAA.

See the official site for more details.

What is DNC [Do Not Call] list?

US Federal Trade Commission (FTC) Telemarketing Sales Rule bars companies from calling individuals who have registered themselves on DNC list. This hurts call centres that make outbound calls [cold calling]. This rule comes into effect from October 1, 2003. As of Sept 1, 2003 about 48 million individuals have registered on the DNC registry. If a company calls an individual on the DNC list, the fine can be approximately $11,000. Call centres have bought insurance to protect themselves from being fined.

Visit National Do Not Call Registry for first hand information. Call centres can download the DNC list from this site.

What is Call Blasting?

Call center's sell by first playing a recorded message in American English. Then the real CSR speaks in neutral/American accent.

What does BFSI stand for?

Banking, Financial Services and Insurance.

Is there any restriction about women working in call centers at night?

In Karnataka, the Legislative Assembly passed a bill in August 2002 which provides for the use of services of women employees during night. Section 25 of the Act was modified to accommodate this change. It is likely that all other states have a similar law.

Also see Factories Act now allows women to work night shifts

What is BOSS?

BOSS stands for Burn-Out Stress Syndrome. BOSS syndrome is seen very commonly among young people working in call centres. The symptoms of this syndrome include chronic fatigue, insomnia and complete alteration of 24-hour biological rhythm of the body. Gastrointestinal problems are inevitable for those working at nights as the body is put under chronic stress. A potentially fatal increase in heart rhythm can result in severe chronic gynaecological problems in women and sleep disorders in both men and women. Guidance about physical and mental coordination to meet the demands of a call centre job is necessary.

Is it true that one needs very low skilled labor for a BPO operation?

Not true. It really depends upon what is the kind of job you are doing for your client. There are companies in India who are doing the R&D work for their clients. Is that low skilled labor?

What does captive operation mean?

The multinational company sets up its own BPO operation instead of outsourcing to a third party. E.g. GE Capital has its operations in Hyderabad and Gurgaon, Dell has an operation in Bangalore.

What is OTTS?

OTTS stands for Outsourcing Through Six Sigma

Are there any certifications for contact centers like ISO?

See all about quality for BPOs.

I am interested in getting a COPC certification in India. Whom do I contact?

See our vendors list.

Are there any capability models for the ITeS industry?

Information Technology Services Qualification Center (ITsqc) in Carnegie Mellon University has developed the eSourcing Capability Model (eSCMSM) for Service Providers to enable IT-enabled sourcing service providers to appraise and improve their capability to provide consistently high quality sourcing services. The eSCM framework also will enable service providers to establish and manage continually improving relationships with clients.

What do I need to enter the BPO arena?

The following list is no different than for any other business.
Domain or process knowledge - basically you need to know the customer's business. Yup, this is in short supply.
Customer access
Market reputation
Capital base

Do any associations cater to the BPO segment?

NASSCOM is the best organization that caters to the BPO segment. They have done a wonderful job in addressing the issues with the government. They have a special group called SIGITES - Special Interest Group for IT Enabled Services..

Also see Business Process Industry Association of India(BPIAI).

ASSOCHAM too has an initiatve for the BPO sector.

Business Process Industry Association of India (BPIAI) provides a network for members to jointly address challenges facing the call centre industry. The association was established in the year 2000.

Be it Telecom Infrastructure, Cost of leased circuits, Labour laws, Training or Retention - all these issues can be addressed better in one voice.
On Aug 6, 2004 Medical Transcription firms in the country joined together to form the Indian Medical Transcription Industry Association (IMTIA) aiming to set best practices and propel growth of the $ 100 million sector.
The American Teleservices Association(ATA) represents the call centers, trainers, consultants, and equipment suppliers that initiate, facilitate, and generate telephone, Internet, and email sales, service, and support.
The Centre for BPO Professionals, a non-profit organisation, will facilitate a platform for BPO and call centre professionals to discuss their issues and find out solutions and help them maintain their employability and adaptability in the volatile market requirements. As of March, 2005 CBPOP has its offices in Bangalore and Hyderabad.
Association of Outsourcing Partners - will foster public-private partnership in education, training & governance, share best practices from China & the US, and promote India as the Knowledge Capital of the World. If you believe in the AOP objectives please join us as soon as you can.

What does "follow the sun" model mean?

India is situated 5 hours ahead of UK, 10 hours ahead of New York and 13 hours ahead of Los Angeles. US and UK companies can claim overnight response capability because during their night time, it is day time in India and agents in India can respond to emails during Indian business hours. This is known as follow the sun model.

Are there any setup guidelines from the govt of India?

See guidelines. This is basically to get the DoT [Department of Telecom] clearance to operate a call centre. There is no prescribed application form, but you need to submit a set of documents. From what we have heard this office is very helpful and they don't harass you.

Can ITES companies share bandwidth?

As of Oct 22, 2002 the Govt of India has decided that ITES can use the bandwidth on a time-sharing mode. It would not be treated as resale of bandwidth, which was banned in India. The move will allow firms to use the same facility and bandwidth to service Indian and international clients, which is not permitted under the present norms. BPOIndia.org would like to thank Confederation of Indian Industry (CII), which mooted the idea.