BPO: Driving major shift in business module

BANGALORE: Business Process Outsourcing (BPO) is driving a

major shift in business modules by retaining all major corporate functioning and

offering distinct services, and there is huge opportunity waiting to be tapped,

said Ernst and Young (India) chairman Kashi Memani.

Speaking at the Bangalore TiEcon 2001 as part of the

BangaloreIT.COM event, he said, "Mere downsizing or cost cutting will not

help in tiding over the present economic scenario. Improve the operational

efficiency through closer look at reducing redundancy and effective cost

management. We need to have a close look at the outsourcing option when the

going gets tough."

Elaborating on the course of BPO, he said, "While

ordinary outsourcing process may end with successful completion of a project, a

BPO may not end and is a continuous assignment. A typical BPO operation includes

some of the major business process segments like administration, financial

management, HR, payment process, logistics management, sales management and

customer care." He added that enterprises should look for extended

services, strong service level agreements (SLAs) and centralized process.

According to Ramesh Ramanathan of Ramanathan Capitol, some of

the critical success factors for BPO were: Cross functional expertise,

Technology competence, Process Bureau and a strong SLA. He added, "The

routes to BPO success for enterprises is through insourcing i.e. use of locally

available services, secure business through assured returns on upfront

investment and to face challenges to diversify revenue sources."

Speaking at the same conference, senior vice president of neoIT (US), Cliff

Justice, said, "In the US, BPO activity has increased during the last 12

months due to the economic slowdown and for the need to cut costs." He

added that the present market size of BPO varied between $100 million and $200

million globally. He informed that some of the major BPO deals in the US

included that of Nortel and PWC, British Petroleum with Exult and similarly Bank

of America with Exult, which varied between $100 million and $1.2 billion.