To my mind, montonous work is impossible to sustain in the long run if you look at some of the literature on liking your work- lAbout Make your passion your profession Make your passion your profession(Work prisoners and students)
From India, New Delhi
8From India, New Delhi
Client profile
US Government contractor, with various contracts across the Middle East.
Revenue in excess of $230m.
Situation prior to outsourcing
Client required to assistance to achieve maximum benefit from their newly acquired contract accounting software.
Invoicing was not manual and not system generated, resulting in anomalies in tracing costs.
Costs were inconsistently allocated to contracts resulting in potential lost billing and revenue.
Management information was inconsistent and not available on a timely basis.
Client was finding appropriate recruitment and retention of accounting staff a problem in certain locations.
Transformation approach
Compass BPO carried out a full revision of the accounting system set-up.
We re-implemented the system at the client site.
We reviewed and documented both the system setup and the clients accounting procedures, including internal controls.
Benefits post outsourcing
Correct system-generated billing and cost allocation ensured that the DCAA audit was completed efficiently and without major problems.
Review and reconciliation of costs resulted in discovery of missing revenue in excess of $3.5m.
Accounting system is now backed up off-site in India and system recovery is regularly tested.
Client now has a dedicated and experienced, off-shore accounting team as part of their resource, enabling them to provide timely and accurate management information and providing a back-office finance platform as their business grows.
From India, Ahmadabad
US Government contractor, with various contracts across the Middle East.
Revenue in excess of $230m.
Situation prior to outsourcing
Client required to assistance to achieve maximum benefit from their newly acquired contract accounting software.
Invoicing was not manual and not system generated, resulting in anomalies in tracing costs.
Costs were inconsistently allocated to contracts resulting in potential lost billing and revenue.
Management information was inconsistent and not available on a timely basis.
Client was finding appropriate recruitment and retention of accounting staff a problem in certain locations.
Transformation approach
Compass BPO carried out a full revision of the accounting system set-up.
We re-implemented the system at the client site.
We reviewed and documented both the system setup and the clients accounting procedures, including internal controls.
Benefits post outsourcing
Correct system-generated billing and cost allocation ensured that the DCAA audit was completed efficiently and without major problems.
Review and reconciliation of costs resulted in discovery of missing revenue in excess of $3.5m.
Accounting system is now backed up off-site in India and system recovery is regularly tested.
Client now has a dedicated and experienced, off-shore accounting team as part of their resource, enabling them to provide timely and accurate management information and providing a back-office finance platform as their business grows.
From India, Ahmadabad
THE CHALLENGES BEING FACED:
India is making progress by leap and bound on one hand, and on the other hand, there are several important challenges are being faced by the industry. These challenges are:
From India, Ahmadabad
India is making progress by leap and bound on one hand, and on the other hand, there are several important challenges are being faced by the industry. These challenges are:
From India, Ahmadabad
Case Study-ISRO
Vox Spectrum successfully creates a radio audit trail for the Indian Space Research Organisation
The Customer
ISRO, the Indian Space Research Organisation, was formed in 1969, with the mandate to develop satellite launch capabilities to serve India’s needs. With spectacular success, ISRO built the ability to launch any kind of satellite into any orbit, and has put India in the select club of six countries with satellite launch capability.
Being a technology-driven organisation, ISRO is very selective about its solution providers. Vox Spectrum was honoured to be invited to address a specific challenge that ISRO faced.
The Challenge
ISRO has a very aggressive launch schedule, with several launches every year. Each launch involves the perfect co-ordination of activities of many teams, each working under pressure.
These teams communicate largely through radio, as their activities are spread throughout ISRO’s dispersed launch site at Sriharikota, near the city of Chennai in South India.
The challenge was that there was no audit trail for post-launch analysis. Vital commands would be given on radio, but ISRO did not have the ability to log them and replay them on demand to trace the pattern of events that led to a particular end.
ISRO’s internal systems were coordinated using a time signal generated by a specially designed system. Using a 1KHz tone, this signal encoded the current time to an accuracy of 1 millisecond. ISRO’s design engineers decided that they need a voice log of all radio conversations, encoded along with the time signal, which they could play back in a time-synchronised pattern. Their dedicated time display device would decode the signal when necessary. Vox Spectrum was invited to provide a solution to address this need.
The Solution
Vox Spectrum engineers analysed the customer requirements and devised a cost-effective solution that met all ISRO’s needs. Vox provided an 16 channel analogue system that was patched into the radio frequencies that ISRO needed to monitor. One of these channels was dedicated to recording the input from the time device.
When a record was played, the audio file was played back in synchronisation with the encoded time signal, though separate audio output devices. The time signal output went to a dedicated decoder, which displayed the time on a LED display device, while the audio signal went to standard speakers or headphones.
The solution was deployed in April 2003, and has been working to ISRO’s utmost satisfaction ever since. ISRO has since placed repeat orders for similar systems for their other launch facilities.
From India, Ahmadabad
Vox Spectrum successfully creates a radio audit trail for the Indian Space Research Organisation
The Customer
ISRO, the Indian Space Research Organisation, was formed in 1969, with the mandate to develop satellite launch capabilities to serve India’s needs. With spectacular success, ISRO built the ability to launch any kind of satellite into any orbit, and has put India in the select club of six countries with satellite launch capability.
Being a technology-driven organisation, ISRO is very selective about its solution providers. Vox Spectrum was honoured to be invited to address a specific challenge that ISRO faced.
The Challenge
ISRO has a very aggressive launch schedule, with several launches every year. Each launch involves the perfect co-ordination of activities of many teams, each working under pressure.
These teams communicate largely through radio, as their activities are spread throughout ISRO’s dispersed launch site at Sriharikota, near the city of Chennai in South India.
The challenge was that there was no audit trail for post-launch analysis. Vital commands would be given on radio, but ISRO did not have the ability to log them and replay them on demand to trace the pattern of events that led to a particular end.
ISRO’s internal systems were coordinated using a time signal generated by a specially designed system. Using a 1KHz tone, this signal encoded the current time to an accuracy of 1 millisecond. ISRO’s design engineers decided that they need a voice log of all radio conversations, encoded along with the time signal, which they could play back in a time-synchronised pattern. Their dedicated time display device would decode the signal when necessary. Vox Spectrum was invited to provide a solution to address this need.
The Solution
Vox Spectrum engineers analysed the customer requirements and devised a cost-effective solution that met all ISRO’s needs. Vox provided an 16 channel analogue system that was patched into the radio frequencies that ISRO needed to monitor. One of these channels was dedicated to recording the input from the time device.
When a record was played, the audio file was played back in synchronisation with the encoded time signal, though separate audio output devices. The time signal output went to a dedicated decoder, which displayed the time on a LED display device, while the audio signal went to standard speakers or headphones.
The solution was deployed in April 2003, and has been working to ISRO’s utmost satisfaction ever since. ISRO has since placed repeat orders for similar systems for their other launch facilities.
From India, Ahmadabad
Hey Friends i want to know how the HR Accounting is being practiced in companies like Infossys, etc. if you have any information please help me. Regards, Navita
From India, New Delhi
From India, New Delhi
Dear Friends, These are realy very use full and wel defined elaborated facts Regards Varun Sharma
From India, Gurgaon
From India, Gurgaon
1. Brand equity: People still consider BPO to be "low brow", thus making it difficult to attract the best talent.
2. Standard pre-job training: Again, due to the wide variety of the jobs, lack of general clarity on skill sets, etc, there is no standard curriculum, which could be designed and followed.
3. Benchmarks: There are hardly any benchmarks for compensation and benefits, performance or HR policies. Everyone is charting their own course.
4. Customer-companies tend to demand better results from outsourcing partners than what they could actually expect from their own departments. "When the job is being done 10,000 miles away, demands on parameters such as quality, turn around timeliness, information security, business continuity and disaster recovery, etc, are far higher than at home. So, how to be more efficient than the original?
5. Lack of focused training and certifications Given this background, the recruiting and compensation challenges of HR departments are only understandable.
Key To success The key to success in ramping up talent in a BPO environment is a rapid training module. The training component has to be seen as an important sub-process, requiring constant re-engineering.
The parameters for the survey was:
Employee Size (Operation level executives), Percentage of last salary hike, Cost to company , Overall Satisfaction Score, Composite Satisfaction, Company Culture, Job Content /Growth, Training , Salary and Compensation , Appraisal System, People, Preferred Company: (Percentage of respondents of a company who named their own company as the preferred one), Dream Company: (Percentage of respondents in the total sample who preferred a particular company).
Employee Benefits Provided By Majoriy Of the BPO Companies
- Provident Fund: As per the statutory guidelines, the employee is required to contribute a percentage of his basic salary and DA to a common fund. The employer for this fund contributes as well. The employee can use the amount deposited in this fund for various personal purposes such as purchase of a new house, marriage etc.
- Gratuity: Gratuity is one of the retrial benefits given to the employee in which the employer every year contributes a particular amount. The fund created can be used by the employee for the purpose of long-term investment in various things such as a house etc.
- Group Mediclaim Insurance Scheme: This insurance scheme is to provide adequate insurance coverage of employees for expenses related to hospitalization due to illness, disease or injury or pregnancy in case of female employees or spouse of male employees. All employees and their dependent family members are eligible. Dependent family members include spouse, non-earning parents and children above three months.
- Personal Accident Insurance Scheme: This scheme is to provide adequate insurance coverage for Hospitalization expenses arising out of injuries sustained in an accident. It is applicable to all the employees of JFWTC and covers total / partial disablement / death due to accident and due to accidents.
- Subsidized Food and Transportation: The organizations provides transportation facility to all the employees from home till office at subsidized rates. The lunch provided is also subsidized.
- Company Leased Accommodation: Some of the companies provides shared accommodation for all the out station employees, in fact some of the BPO companies also undertakes to pay electricity/water bills as well as the Society charges for the shared accommodation. The purpose is to provide to the employees to lead a more comfortable work life balance.
- Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities include pool tables, chess tables and coffee bars. Companies also have well equipped gyms, personal trainers and showers at facilities.
- Corporate Credit Card: The main purpose of the corporate credit card is enable the timely and efficient payment of official expenses which the employees undertake for purposes such as travel related expenses like Hotel bills, Air tickets etc
- Cellular Phone / Laptop: Cellular phone and / or Laptop is provided to the employees on the basis of business need. The employee is responsible for the maintenance and safeguarding of the asset.
- Personal Health Care (Regular medical check-ups): Some of the BPO'S provides the facility for extensive health check-up. For employees with above 40 years of age, the medical check-up can be done once a year.
- Loans: Many BPO companies provides loan facility on three different occasions: Employees are provided with financial assistance in case of a medical emergency. Employees are also provided with financial assistance at the time of their wedding. And, The new recruits are provided with interest free loans to assist them in their initial settlement at the work location.
- Educational Benefits: Many BPO companies have this policy to develop the personality and knowledge level of their employees and hence reimburses the expenses incurred towards tuition fees, examination fees, and purchase of books subject, for pursuing MBA, and/or other management qualification at India's top most Business Schools.
- Performance based incentives: In many BPO companies they have plans for , performance based incentive scheme. The parameters for calculation are process performance i.e. speed, accuracy and productivity of each process. The Pay for Performance can be as much as 22% of the salary.
- Flexi-time: The main objective of the flextime policy is to provide opportunity to employees to work with flexible work schedules and set out conditions for availing this provision. Flexible work schedules are initiated by employees and approved by management to meet business commitments while supporting employee personal life needs .The factors on which Flexi time is allowed to an employee include: Child or Parent care, Health situation, Maternity, Formal education program.
- Flexible Salary Benefits: Its main objective is to provide flexibility to the employees to plan a tax-effective compensation structure by balancing the monthly net income, yearly benefits and income tax payable. It is applicable of all the employees of the organization. The Salary consists of Basic, DA and Conveyance Allowance. The Flexible Benefit Plan consists of: House Rent Allowance, Leave Travel Assistance, Medical Reimbursement, Special Allowance
- Regular Get together and other cultural programs: The companies organizes cultural program as and when possible but most of the times, once in a quarter, in which all the employees are given an opportunity to display their talents in dramatics, singing, acting, dancing etc. Apart from that the organizations also conduct various sports programs such as Cricket, football, etc and regularly play matches with the teams of other organizations and colleges.
- Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/- based on their level in the organization.
- Employee Referral Scheme: In several companies employee referral scheme is implemented to encourage employees to refer friends and relatives for employment in the organization.
- Paid Days Off
- Maternity Leave
- Employee Stock Option Plan
Inspite of all these benefits, the attrition rate in BPO industry is very high, why?. What is the reason for an employee to leave? These and many more are the questions that need immediate attention from the industrial gurus. Why people prefer to join BPO's? In general a person with any graduation can join any of the BPO. Some BPO's like to take people with MBA but then again the specialization are of an individual hardly makes any difference. Again, this is the industry, where there is no reference checks and very often people don't even specify there exact age. Lets me share with you some of the reasons as why people prefer to join a BPO:
1. Did not get a better job.
2. Find nothing better to do.
3. Education level doesn't matter
4. Good work environment
5. Good Benefits
6. Flexibility of time
7. Attractive life style
8. Transport facility
Why people leave the BPO's? When there are so many benefits associated with BPO industry�.when there are so many privileges for the BPO employees than what makes them to change the company/industry?? Is it only MONEY that matters or anything else as well?? Here are some of the reasons for a BPO professional to change his/her job.
1. No growth opportunity/lack of promotion
2. For higher Salary
3. For Higher education
4. Misguidance by the company
5. Policies and procedures are not conducive
6. No personal life
7. Physical strains
8. Uneasy relationship with peers or managers
From India, Ahmadabad
2. Standard pre-job training: Again, due to the wide variety of the jobs, lack of general clarity on skill sets, etc, there is no standard curriculum, which could be designed and followed.
3. Benchmarks: There are hardly any benchmarks for compensation and benefits, performance or HR policies. Everyone is charting their own course.
4. Customer-companies tend to demand better results from outsourcing partners than what they could actually expect from their own departments. "When the job is being done 10,000 miles away, demands on parameters such as quality, turn around timeliness, information security, business continuity and disaster recovery, etc, are far higher than at home. So, how to be more efficient than the original?
5. Lack of focused training and certifications Given this background, the recruiting and compensation challenges of HR departments are only understandable.
Key To success The key to success in ramping up talent in a BPO environment is a rapid training module. The training component has to be seen as an important sub-process, requiring constant re-engineering.
The parameters for the survey was:
Employee Size (Operation level executives), Percentage of last salary hike, Cost to company , Overall Satisfaction Score, Composite Satisfaction, Company Culture, Job Content /Growth, Training , Salary and Compensation , Appraisal System, People, Preferred Company: (Percentage of respondents of a company who named their own company as the preferred one), Dream Company: (Percentage of respondents in the total sample who preferred a particular company).
Employee Benefits Provided By Majoriy Of the BPO Companies
- Provident Fund: As per the statutory guidelines, the employee is required to contribute a percentage of his basic salary and DA to a common fund. The employer for this fund contributes as well. The employee can use the amount deposited in this fund for various personal purposes such as purchase of a new house, marriage etc.
- Gratuity: Gratuity is one of the retrial benefits given to the employee in which the employer every year contributes a particular amount. The fund created can be used by the employee for the purpose of long-term investment in various things such as a house etc.
- Group Mediclaim Insurance Scheme: This insurance scheme is to provide adequate insurance coverage of employees for expenses related to hospitalization due to illness, disease or injury or pregnancy in case of female employees or spouse of male employees. All employees and their dependent family members are eligible. Dependent family members include spouse, non-earning parents and children above three months.
- Personal Accident Insurance Scheme: This scheme is to provide adequate insurance coverage for Hospitalization expenses arising out of injuries sustained in an accident. It is applicable to all the employees of JFWTC and covers total / partial disablement / death due to accident and due to accidents.
- Subsidized Food and Transportation: The organizations provides transportation facility to all the employees from home till office at subsidized rates. The lunch provided is also subsidized.
- Company Leased Accommodation: Some of the companies provides shared accommodation for all the out station employees, in fact some of the BPO companies also undertakes to pay electricity/water bills as well as the Society charges for the shared accommodation. The purpose is to provide to the employees to lead a more comfortable work life balance.
- Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities include pool tables, chess tables and coffee bars. Companies also have well equipped gyms, personal trainers and showers at facilities.
- Corporate Credit Card: The main purpose of the corporate credit card is enable the timely and efficient payment of official expenses which the employees undertake for purposes such as travel related expenses like Hotel bills, Air tickets etc
- Cellular Phone / Laptop: Cellular phone and / or Laptop is provided to the employees on the basis of business need. The employee is responsible for the maintenance and safeguarding of the asset.
- Personal Health Care (Regular medical check-ups): Some of the BPO'S provides the facility for extensive health check-up. For employees with above 40 years of age, the medical check-up can be done once a year.
- Loans: Many BPO companies provides loan facility on three different occasions: Employees are provided with financial assistance in case of a medical emergency. Employees are also provided with financial assistance at the time of their wedding. And, The new recruits are provided with interest free loans to assist them in their initial settlement at the work location.
- Educational Benefits: Many BPO companies have this policy to develop the personality and knowledge level of their employees and hence reimburses the expenses incurred towards tuition fees, examination fees, and purchase of books subject, for pursuing MBA, and/or other management qualification at India's top most Business Schools.
- Performance based incentives: In many BPO companies they have plans for , performance based incentive scheme. The parameters for calculation are process performance i.e. speed, accuracy and productivity of each process. The Pay for Performance can be as much as 22% of the salary.
- Flexi-time: The main objective of the flextime policy is to provide opportunity to employees to work with flexible work schedules and set out conditions for availing this provision. Flexible work schedules are initiated by employees and approved by management to meet business commitments while supporting employee personal life needs .The factors on which Flexi time is allowed to an employee include: Child or Parent care, Health situation, Maternity, Formal education program.
- Flexible Salary Benefits: Its main objective is to provide flexibility to the employees to plan a tax-effective compensation structure by balancing the monthly net income, yearly benefits and income tax payable. It is applicable of all the employees of the organization. The Salary consists of Basic, DA and Conveyance Allowance. The Flexible Benefit Plan consists of: House Rent Allowance, Leave Travel Assistance, Medical Reimbursement, Special Allowance
- Regular Get together and other cultural programs: The companies organizes cultural program as and when possible but most of the times, once in a quarter, in which all the employees are given an opportunity to display their talents in dramatics, singing, acting, dancing etc. Apart from that the organizations also conduct various sports programs such as Cricket, football, etc and regularly play matches with the teams of other organizations and colleges.
- Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/- based on their level in the organization.
- Employee Referral Scheme: In several companies employee referral scheme is implemented to encourage employees to refer friends and relatives for employment in the organization.
- Paid Days Off
- Maternity Leave
- Employee Stock Option Plan
Inspite of all these benefits, the attrition rate in BPO industry is very high, why?. What is the reason for an employee to leave? These and many more are the questions that need immediate attention from the industrial gurus. Why people prefer to join BPO's? In general a person with any graduation can join any of the BPO. Some BPO's like to take people with MBA but then again the specialization are of an individual hardly makes any difference. Again, this is the industry, where there is no reference checks and very often people don't even specify there exact age. Lets me share with you some of the reasons as why people prefer to join a BPO:
1. Did not get a better job.
2. Find nothing better to do.
3. Education level doesn't matter
4. Good work environment
5. Good Benefits
6. Flexibility of time
7. Attractive life style
8. Transport facility
Why people leave the BPO's? When there are so many benefits associated with BPO industry�.when there are so many privileges for the BPO employees than what makes them to change the company/industry?? Is it only MONEY that matters or anything else as well?? Here are some of the reasons for a BPO professional to change his/her job.
1. No growth opportunity/lack of promotion
2. For higher Salary
3. For Higher education
4. Misguidance by the company
5. Policies and procedures are not conducive
6. No personal life
7. Physical strains
8. Uneasy relationship with peers or managers
From India, Ahmadabad
In the software and services space, the role of the Indian BPO industry is going to get relatively important over time. This is because the software services industry is about three times larger than the BPO industry and is growing at a significantly slower pace (around 30 per cent, compared to 40 per cent for BPO) already.
So it is the BPO industry which will have to carry the can, in terms of the growth rate, in the run-up to 2008, by which time India has targeted for itself exports of $50 billion, compared to $17 billion in 2004-05.
Against this tall order, the good news is three-fold for the BPO industry. First, these are still early days. Despite the consolidation that has taken place through several high-profile M&A deals last year, the top 20 players' market share has remained the same.
Everybody, the big, who are global class in quality, and the small, some of whom are not, is growing at a very rapid rate (BPO exports grew 44.4 per cent in 2004-05). So there is good scope for further rapid growth.
Second, the BPO industry overall is doing quite well, according to a survey and global benchmarking by Nasscom. Currently, the end user rating for Indian BPO is as high as that for North American vendors, the global leaders. The same is the case in terms of the number of fatal errors made.
Third, the leading Indian BPO vendors are rapidly maturing and going up the value chain. The Nasscom study has defined three phases which BPO companies go through while maturing: phase one -- with potential, relying on cost advantage; phase two -- relying on performance in service delivery; and phase three -- promising operational excellence in terms of established benchmarks.
Nasscom says the Indian BPO industry is moving from phase one to two, that is from potential to performance.
Vikram Talwar, CEO of EXL Services, one of the leading Indian BPO firms which is heading to be the first Indian-managed BPO firm to list at Nasdaq, says there is "no future in voice (the bottom rung of the maturity ladder), and we shouldn't be in it". But he sees great future and value in hybrid services offering both voice and non-voice services. The growth rate in this will remain high for the next 2-5 years.
"The transition from voice to hybrid is needed and it's happening. But the future is really in consulting and analytics. That's where true value is generated." In all except pure voice, growth can continue at 30-40 per cent. In hybrid services growth is established; in pure non-voice (handling of entire processes), demand is starting to grow and clients are looking for size and comfort levels.
If the weakness of Indian BPO was that its biggest players were mostly in the commoditised voice business, then key change is taking place in one company.
Says T K Kurien, who has just taken over as chief executive of Wipro Spectramind, "In three years we will become a different kind of business. Headcount will not be a factor any more, though topline growth will remain in the 30-40 per cent range."
This will be achieved by drastically changing the work mix, which is still 80 per cent voice. The share of end-to-end processes work will be raised four times to 40 per cent in three years.
So a transition is taking place but there are two key challenges ahead. The first is the skills scenario -- the industry's attrition rate is now legendary, ranging from 25 to 40 per cent (Nasscom figure), to 70 per cent in the case of at least one leading voice player.
To beat the attrition and accompanying rising costs, when people leave in droves, companies sharply hike compensation packages, thus laying up trouble for the future. GECIS Global CEO Pramod Bhasin's solution is to expand in two- and three-tier cities.
"There is a lot to learn in how and where to recruit." He finds cities like Jaipur to be 'fantastic', with 'low attrition, low costs and good lifestyle'.
The successful hybrid players like WNS, EXL, and GECIS Global, which do not rely extensively on voice, find that as they grow they are learning to live with attrition. Rahul Singh, CEO of e-Serve, also feels that the industry is maturing and already there are several focused players.
That is the recipe for everybody -- get more focused, "select the domain and then scale up", and not as some have done till now. But the real challenge is not in the gross numbers, made up by entry-level recruits who flit from job to job, but retaining management talent -- getting the middle management to go to the two- and three-tier cities.
The second challenge is the data security issue, which anguishes the whole industry. The best industry players say they are more rigorous on security than many even at the home base of the clients.
"It is probably the single-biggest issue for Indian BPO," says Talwar. Bhasin adds, "Data protection will be India's issue and we have to manage perceptions. It all depends on how you follow up when something happens."
Everybody agrees that the government and Nasscom should put together a set of best practices and all the necessary laws must be in place. But there is a bit of gray area here. Most of the industry feels that India needs a comprehensive data security law and Nasscom was working on this with the previous government.
But the tune has changed a little with the change of government. The argument now is that most of the laws, 98 per cent, are already there. It is for Nasscom to tell the government that a comprehensive law is needed and the sooner it is put in place the better.
Powered by
From India, Ahmadabad
So it is the BPO industry which will have to carry the can, in terms of the growth rate, in the run-up to 2008, by which time India has targeted for itself exports of $50 billion, compared to $17 billion in 2004-05.
Against this tall order, the good news is three-fold for the BPO industry. First, these are still early days. Despite the consolidation that has taken place through several high-profile M&A deals last year, the top 20 players' market share has remained the same.
Everybody, the big, who are global class in quality, and the small, some of whom are not, is growing at a very rapid rate (BPO exports grew 44.4 per cent in 2004-05). So there is good scope for further rapid growth.
Second, the BPO industry overall is doing quite well, according to a survey and global benchmarking by Nasscom. Currently, the end user rating for Indian BPO is as high as that for North American vendors, the global leaders. The same is the case in terms of the number of fatal errors made.
Third, the leading Indian BPO vendors are rapidly maturing and going up the value chain. The Nasscom study has defined three phases which BPO companies go through while maturing: phase one -- with potential, relying on cost advantage; phase two -- relying on performance in service delivery; and phase three -- promising operational excellence in terms of established benchmarks.
Nasscom says the Indian BPO industry is moving from phase one to two, that is from potential to performance.
Vikram Talwar, CEO of EXL Services, one of the leading Indian BPO firms which is heading to be the first Indian-managed BPO firm to list at Nasdaq, says there is "no future in voice (the bottom rung of the maturity ladder), and we shouldn't be in it". But he sees great future and value in hybrid services offering both voice and non-voice services. The growth rate in this will remain high for the next 2-5 years.
"The transition from voice to hybrid is needed and it's happening. But the future is really in consulting and analytics. That's where true value is generated." In all except pure voice, growth can continue at 30-40 per cent. In hybrid services growth is established; in pure non-voice (handling of entire processes), demand is starting to grow and clients are looking for size and comfort levels.
If the weakness of Indian BPO was that its biggest players were mostly in the commoditised voice business, then key change is taking place in one company.
Says T K Kurien, who has just taken over as chief executive of Wipro Spectramind, "In three years we will become a different kind of business. Headcount will not be a factor any more, though topline growth will remain in the 30-40 per cent range."
This will be achieved by drastically changing the work mix, which is still 80 per cent voice. The share of end-to-end processes work will be raised four times to 40 per cent in three years.
So a transition is taking place but there are two key challenges ahead. The first is the skills scenario -- the industry's attrition rate is now legendary, ranging from 25 to 40 per cent (Nasscom figure), to 70 per cent in the case of at least one leading voice player.
To beat the attrition and accompanying rising costs, when people leave in droves, companies sharply hike compensation packages, thus laying up trouble for the future. GECIS Global CEO Pramod Bhasin's solution is to expand in two- and three-tier cities.
"There is a lot to learn in how and where to recruit." He finds cities like Jaipur to be 'fantastic', with 'low attrition, low costs and good lifestyle'.
The successful hybrid players like WNS, EXL, and GECIS Global, which do not rely extensively on voice, find that as they grow they are learning to live with attrition. Rahul Singh, CEO of e-Serve, also feels that the industry is maturing and already there are several focused players.
That is the recipe for everybody -- get more focused, "select the domain and then scale up", and not as some have done till now. But the real challenge is not in the gross numbers, made up by entry-level recruits who flit from job to job, but retaining management talent -- getting the middle management to go to the two- and three-tier cities.
The second challenge is the data security issue, which anguishes the whole industry. The best industry players say they are more rigorous on security than many even at the home base of the clients.
"It is probably the single-biggest issue for Indian BPO," says Talwar. Bhasin adds, "Data protection will be India's issue and we have to manage perceptions. It all depends on how you follow up when something happens."
Everybody agrees that the government and Nasscom should put together a set of best practices and all the necessary laws must be in place. But there is a bit of gray area here. Most of the industry feels that India needs a comprehensive data security law and Nasscom was working on this with the previous government.
But the tune has changed a little with the change of government. The argument now is that most of the laws, 98 per cent, are already there. It is for Nasscom to tell the government that a comprehensive law is needed and the sooner it is put in place the better.
Powered by
From India, Ahmadabad
TAKEAWAY: Thanks to Fostering Technologies in Rural Areas (Fostera), a rural business-process outsourcing initiative in India, 200 youth from poor families from local villages can find employment. Dr. Santhosh Babu, creator of Fostera, hopes to replicate the model across the country.
From India, Ahmadabad
From India, Ahmadabad
Find answers from people who have previously dealt with business and work issues similar to yours - Please Register and Log In to CiteHR and post your query.
HR Challenges.doc
HR challenges-Cite HR.ppt