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India BPO Industry Overview
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Table of ContentsExecutive Overview
Emerging Trends of BPO
Indian BPO market: Key highlights and trends
Phases of ITES-BPO Evolution in India
Key enablers for growth of BPO in India
Impact of BPO on Indian economy
BPO: Services Spectrum
PATNI :-BPO SERVICES Mapping of BPO and KPO processes on complexity
gridPatni approaches towards Hiring and RetentionPatnis Differentiators
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Executive OverviewBPO A structured arrangement between an organization and an outsourcing partner to perform services, otherwiseconducted in-house.
Until few years ago, BPO was a means to achieve cost efficiencies in transaction intensive back office business
processes
This resulted in both tangible benefits like reduction in cost, and intangible benefits such as focusing on more
strategic issues.
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BPO is emerging as a key management tool, the focus of which is expanding beyond
the non-core areas, giving an organization flexibility to achieve a certain set of
tactical and strategic goals.
Organizations opt to undertake BPO because it offers them advantages of cost, speed
to market, competitive capabilities, stimulus for growth and both the time andspace to focus on their own core competencies.
As the scope of BPO increases, so does the level of complexity involved in managing
partnerships, structuring deals, and capturing values. Consequently, older paradigms
of BPO no longer hold true.
Emerging face of BPO
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Source: NASSCOM Strategic Review 2007
Indian BPO market: Key highlights and trends
46%
40%
3%
11%
Customer I
Services
F&A
HR
Others
BPO in India is growing at 3 2% and is estimated to cross $ 8.6 3 billion in 2007
Direct employment in BPO was 4 15 ,000 in 2006 and is expected to cross 545 ,000 in 2007
Indian IT-BPO industry has helped create an additional 3 million job opportunities through indirect and inducedemployment, which will go upto 6. 5 million by 2010
The contribution of BPO & IT to Indias GDP will rise to 5 .4 % by 2007, against 1.2% in 1998
The industry is moving from transaction processing & voice to complex knowledge based services
Indian B PO Exports
3.104.60
6.30
8.63
11.82
-2
4
6
8
10
12
14
FY 2004 FY 2005 FY 2006 (E) FY 2007 (E) FY 2008 (E)
U S D
B i l l i o n
46%
40%
3%
11%
Customer InteractionServices
F&A
HR
Others
Break-up of Indian BPO Experts
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Operational cultures previously
seen only in western shared
services centers were developed
Large operations & high quality
infrastructure was built
Development of delivery
processes legalising shift work
for men & women
Low resistance to offsshore
outsourcing
Improving risk profile of the business
model-supply-side still perceived to be
immature
Early movers display advantage of acale
Credibility of business model reinforced
perceived risks dealt with
satisfactorily
Initiation of work on process &
regulatory standards
Rise in anti offshore backlash
Widespread global acceptance of the
economic imperative of global sourcing
Proliferation of players, service lines &
sourcing destinations
Changing cost economies decline in labour
arbitrage offset by leveraging processes &
SG&A efficiencies and scale
Shift towards higher order, cost plus benefits
from global sourcing
Maturity of processes& regulatory standards in
industry
Phase 1 1996-2000
Pioneers focus on building scale.
Absence of vendors with exhibited
capabilities. Preference for the
captive model
Source: IBM Consulting Services
Phase 2 (200-2003)
Early adopters sharpen
outsourcing strategy. Rise of
3 PSP
Phase 3 (2003-2008E)
Cautious followers embrace
outsourcing unconditionally.
Higher degree of consolidation
shake out
Phases of ITES-BPO Evolution in India
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Key enablers for growth of BPO in India
Emphasis on InformationSecurity & Quality
Large English-speakingTalent Pool
Progressive macro-economicenvironment
Focus on BusinessInfrastructure
Business Policy & RegulatoryEnvironment
Large pool of English speaking talent3 .1 million graduates pass out of Indian Colleges annually comprising of 1 5 1,000 Engineering &100,000 IT Graduates
Stable market with a thrust on growth and globalization
India has created a BPO business friendly environment through progressive policies (STPI & SEZ)
Highest number of Quality certified Delivery centers in the world (including ISO27001, BS7799, SEICMM, SEI PCMM, COPC, eSCM etc)
Initiatives & Investments in ensuring highest level of Data/Information Security
Rapid growth in critical business Infrastructure like Telecom, Internet Connectivity, Real Estate,Roads, Transportation etc
Strong emphasis by government on building & enhancing support Infrastructure
Indias attractiveness is enhanced by progressive tax reforms & strong regulatory frameworkGovernment support through incentives & non- financial assistance
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Impact of BPO on Indian economy
J ob creation (Direct &Indirect)
BPO offers a big employment avenue for Indias vast population base
Direct employment of 4 15 ,000 people in BPO, with ~ 3 million indirect employment in 2006
GDP growth
Rising income levels andpurchasing power of people
Development & Upgradationof Infrastructure
Positioning in the globalmarketplace
8. 5 % GDP growth in 2006, a major contributor was the growth in services sector including IT & BPO
BPO and IT industries are a key contributor to India current Forex reserves of $ 19 4 billion
BPO offers employment to millions of people with competitive remuneration4 15 ,000 people employed in BPO are a key constituent of the growing affluent class of people
Purchasing power of ~ $ 3 billion of the people directly employed in BPO in India
Many MNCs and Indian companies have invested billions of $ in creating infrastructure
Robust telecom, internet connectivity, roads, logistics and ancillary support infrastructure
India has emerged as a global IT and BPO hub & globally positioned as the number # 1destination for BPO and IT services
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BPO: Services Spectrum
Finance and AccountingR&D and Product Design
HRTechnology & Helpdesk operation
I n b o u n
d
L o g
i s t i c s
B u s i n e s s
o p e r a
t i o n s
O u
t b o u n
d
L o g
i s t i c s
S a l e s
&
M a r k e
t i n g
C u s t o m e r
S e r v
i c e
Financial AccountingManagement ReportingRevenue AccountingOrder to CashRecord To ReportProcure to PayFixed Asset Management
Customer supportBilling query resolutionOrder managementAccount maintenanceOrder bookingEmail/Chat supportCollections
Commercial prospect evaluation fornew innovationsNew product development support
Data mining, programming, dataanalysis
Patent drafting & filing supportAnalytics:
Business intelligenceTarget segmentationPricing analytics
Staffing MgmtResume filteringJD developmentInitial CV screeningStaffing administration
HR Service AdministrationEmployee data mgmtLeave scheduling & trackingAttendance management
Employee serviceEmployee helpdesk
Application SupportERPCRM
Portal SupportContent ManagementIT Helpdesk
Desktop SupportNetworking SupportWeb Support
Strategic SourcingSpend analysisRFX managementeAuction support
Category ManagementSourcing supportContract compliance managementSpend reporting
Process ManagementInvoice managementCustom analytics
C o r e
S u p p o r t
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Moving towards KPO
Established opportunities
Customer interactionservices
Finance and accountsservices
Engineering design services
HR services
Animation
Translation, transcriptionand localisation
Rapidly evolving opportunities
Network management
Distribution productdevelopment
Data search, integration andanalysis
Marketing servicesSecretarial services
Web site services
Remote education
Customer Analytics
Latent opportunities
Equity Research
Logistics management
Consulting services
Monitoring servicesLegal advice
Medical advice
Source: NASSCOM McKinsey Study- India IT Strategies, Evalueserve
India KPO services market is expected to:G row from $1.2 Bn to $15.5 Bn in 2010CAGR of 43%Hold 71% of global KPO market in 2010from 56% in 2004
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PATNI :-BPO SERVICESMapping of BPO and KPO processes on complexitygrid
BPO Knowledge Services (KPO)
High
Low
CodeSupport
RevenueAssuranc
e
CustomerSupport
Health InsuranceApplication Processing
Web ContentManagement
Revenue andBenefitsAdmin
ClaimsProcessing
Defined Contribution
FundAdministration
ActuarialServices
BenefitsCoding
ExpenseProcessing
High
C o m p l e x i t y
Knowledge Intensiveness
FinancialReporting
IT Helpdesk
ERP/AppsSupport
PaymentProcessing
Credit CardsApplicationProcessing
AP / AR
ClaimsAdjudication
DefinedBenefits
Health &Welfare
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Patni approaches towards Hiring andRetention
Selection ToolsAptitude testLanguage Proficiency Test
Technical TestGroup DiscussionsTechnical/Functional InterviewFinal HR Interview
Hiring
Retention Program: Bank @ Patni PlanWell Defined Career PathQuarterly Skip Levels Meetings
Competitive salariesQuarterly Fun OutingsReward & Recognition SchemesPerformance Based Incentives SchemesRetention ProgramsCompensation linked to performanceEmployee Satisfaction SurveyParents visit to facility
Employee Satisfaction & Retention
Patni attracts the best talent in the industry by simply givingresponsibility early on to its employees- Business Today
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Patni s key differentiatorsPast track record Over 29 years of experience in servicing global clientsLarge strategic global relationships with Fortune 5 00 organizations
Integrated IT-BPOSolutions
Patnis IT & BPO organizations are tightly integratedJoint Project Governance & Relationship Management
Flexible and ScalableDelivery Model
Flexibility in engagement and program designFlexibility in scaling-up operationsAgility in deployment of best-of-breed resources
Established transitioning
methodology
Robust Transitioning Toolkit & Program Migration Methodology
Offshoring Assessment through SCOPE methodology
Year-on- yearproductivity gains
Year on year productivity gains to sustain significant cost benefitsSix Sigma based Process re-engineering and automation to enhance cost savings
Multi-lingual SupportCapability
Global Service Delivery FootprintExperience in providing Multi-lingual Support from India & China covering languages like English,Spanish, German, French, Chinese, Japanese and Mandarin
Six Sigma capabilitySix Sigma based process improvementsRobust quality model to achieve defect free deliveryOperational best practices implementation
Competitive PricingMaximization of cost take-outs through competitive pricing modelReward and Penalty based structure to drive competitiveness
Business Transformationcapability
Business Transformation and Consulting Practice to assist clients to draw a clear roadmap for redesignand improving business services
People practices Best in class people management practices to attract and retain talentLow attrition rate compared to industry standard