bpo industry overview
A business process outsourcing industry overview
BPO industry overview : An overview is a bird’s eye view of a subject that someone is interested in. It seeks to provide a general understanding of the subject.
In some ways it might be considered as superficial, but not everyone needs detailed information always.
On many occasions, an overview is what is needed. It is, of course, accurate information. Superficial does not mean inaccurate.
However, the information is perhaps aggregated to a level that is most suitable for the occasion.
As an example, if the US President looks for an overview of tourist arrivals during a period, the information he is provided might pertain to tourist arrivals from other countries to the USA.
On the other hand, if the governor of Texas seeks an overview of tourist arrivals, he will perhaps be presented with information pertaining to tourist arrivals into Texas, with possibly a breakup between domestic and international tourists. So, the perspective of the seeker can change what the overview should cover.
An industry overview is a bird’s eye view of an industry, as simple as that. And that applies to the business process outsourcing industry as well.
A business process outsourcing industry overview is designed to provide to an interested party information about the industry that would advance his knowledge relevant to his specific perspective and how much detail he would like to go into. And it does not have to be provided by someone.
Often an interested party goes around collecting different pieces of the jigsaw from varied sources that together would constitute an industry overview and serve to satisfy his quest for the overview.
What might an industry overview consist of? There is no defined list of what constitutes an industry overview. It is meant to convey an impression about the journey traversed by the industry, which means historical information, with a callout of significant events that may have impacted the trajectory, the milestones achieved along the way, and perhaps about people or organizations who played key roles.
And, of course, since the requirement is always to enable a decision which pertains to the future, any guidance on the future trajectory is included.
The senior management of oWorkers, with over 20 years of hands-on experience in the industry, is well placed to look at industry and client overviews before signing up with a new client.
Need for a BPO industry overview
In business, every action is deliberate and designed to advance the agenda of the organization the individual represents.
So is the quest for an industry overview. It is usually information that the seeker will use for the purpose of taking a decision for the future. The most common need for an industry overview is perhaps for a decision to enter the industry being contemplated by a business house or by an entrepreneur.
The business house is flush with funds and is contemplating several industries to diversify into.
They have created a shortlist through their own current understanding and perhaps feedback during discussions with people more closely involved. Before money is committed to a new project, they would like to be sure that there exists a reasonable opportunity for the investment to deliver returns.
They might be interested in an overview of all the industries that have been shortlisted for a detailed analysis.
A BPO industry overview will be needed if it is one of the shortlisted ones.
An entrepreneur seeking to create a business in the industry will also seek similar information.
Academic research also sometimes entails industry research, especially for students of business studies.
Even academic studies will have a perspective for the research. It could be to understand the relative performance of two industries over a similar period of time, to understand what measures propel an industry faster.
A company may look for an industry overview to understand its own place in it.
A banker may seek an industry overview while considering a loan application from a company. Investors in stocks might look for industry overviews.
The reasons can be many. oWorkers looked at the overview of the business process outsourcing industry from many perspectives before they took the plunge just eight years back.
They are already counted as one of the top three providers of data based BPO services in the world.
Business process outsourcing industry overview
In the following paragraphs, we will present an overview of the BPO industry.
Introduction
It is often difficult to comprehend what is meant by the BPO industry. What exactly does it do? It is perhaps easy to understand that a company makes shaving razors that people buy and use for shaving.
It is perhaps easy to understand that you can get a haircut at a salon or barber shop. But a BPO?
Hence this introduction. Business process outsourcing is the engagement of external resources for doing work that is essential to be done for your company to survive and prosper.
External resources could be in the form of an agency or company who then hires people for the work, or directly hiring freelancers and contractors who are not employees.
While outsourcing was common in the manufacturing sector, the rise of the services sector and the outsourcing of business processes of services industries has brought BPO to center stage in the last few decades.
It has even been accused of stealing jobs away. However, a dispassionate look at business would tell us that engagement of suppliers, contractors, service providers has always been a core part of business.
No business does everything by itself. Hence business process outsourcing.
People remain a key resource for all providers.
oWorkers excels in this with their ability to draw a steady stream of applicants looking for jobs.
This enables selection of the most suitable candidates for client projects, through a rigorous selection process.
Growth of the industry
Historical trends and growth is an integral part of the BPO industry overview.
While it pertains to the past, historical trends are often used to draw important conclusions about the future.
The first wave of outsourcing is understood to have happened in the wake of growing prosperity of the middle class and growing consumer franchises catering to them, as well as competition for business.
Companies started locating non customer-facing activities away from expensive downtown locations in a bid to save cost of real estate as well as the more expensive resources in these locations.
As this practice became established and booked, competition kept increasing and corporate hunger for more continued.
With air travel becoming more frequent, it became easier for documents and people to travel frequently and quickly, leading to the work moving on to the rural locations of the nation.
For much the same reasons of inexpensive real estate and qualified resources at lower cost. Along the way, companies specializing in business processing activities got formed and eventually became an integral part of the landscape.
The telecommunications revolution, and the internet, with the ability to communicate instantly from one digital device to another, opened the way for the next major expansion and growth.
Now, work could be taken almost anywhere in the world.
This opened access to vast numbers of qualified resources in countries like India and the Philippines which have continued to define much of the progress in the industry ever since.
But that is not the end game. Newer locations have emerged, from the East European nations to South America to Africa.
In a free market one can never say what comes next. Growth can sometimes be messy and uncontrolled.
A partner like oWorkers, with its ability to provide extra resources on a whim, is worth its weight in gold. This saves clients the needless cost of maintaining ‘just in case’ resources.
Major offerings
What does it do? This question was asked earlier.
This section provides a response in greater detail by listing out some of the business processes that constitute the industry.
Call Center work – This was one of the first processes to be outsourced, as it ticked two important boxes; it was voluminous and sufficiently non-core.
It continues to be a major part of the BPO work handled by vendors. Customer servicing, technical support and debt collection are some of the functions handled by call centers.
With multilingual support in over 20 languages, oWorkers can cater to most languages that clients work in Data Entry – Again, in its various shapes and forms, one of the earliest types of work to be outsourced, as the race to digitize the world’s data has been going on for several decades.
Despite the evolution of automation tools, on account of accuracy challenges, manual data entry remains a need.
All centers are equipped to operate 24×7.
This enables quick turnaround for client transactions which gives them a competitive advantage.
Human Resources – Human resources outsourcing, or HRO, has picked up pace even as the employee pools of companies have expanded and the need to handle all employee matters in a professional manner has become a necessity.
Some aspects of HRO, such as recruitment, have become independent services in their own right, known as recruitment process outsourcing, or RPO.
Working with employees, and not freelancers, gives oWorkers the flexibility of deployment while enabling people to grow.
Finance and Accounting – While large companies can hire the experts needed for finance and accounting, or F&A, many others choose to hire providers either in the form of companies or freelancers/ consultants to handle this work, which is often regulatory in nature.
The oWorkers pricing model, which gives a choice of input based or output based pricing, is appreciated by all clients. Knowledge Process Outsourcing – Also known as KPO, while it does not cater to a single function or process, the term describes processes that are related to analysis of information and are understood to require significantly higher levels of knowledge and skills amongst the people engaged in it.
Staff, both past and present, rate oWorkers at 4.6, on a scale of 5, or above, on independent platforms such as Glassdoor.
As this is a BPO industry overview, presented above are the most common functions of the industry.
It is also said that any business process can be handled by a BPO provider, subject to it being defined in the form of a process, and the willingness of the outsourcer.
Key players
There Are many BPO providers. Some are specialized and some provide a range. Some are small and some large.
Some are a single unit operation and some are well distributed. In general, BPO providers are understood to be one of the following three types:
Captives – Some of the initial groundbreaking work in BPO has been done by captives, or units that were either a part of the outsourcing company or another company within the umbrella of the same leadership.
This is perhaps understandable as there is greater risk in the earlier stages of a new initiative.
General Electric and American Express are generally considered to be among the first to recognize the India BPO opportunity and set up units for the same.
Captives are increasingly being referred to as Global inhouse Centers (GICs).
HSBC Electronic Data Processing Services, J P Morgan Chase, Dell International, Aviva Global Services are some well known names that run GICs.
oWorkers delivers to several unicorn marketplaces as well as many technology companies. Units of software companies – Many software companies developed close relationships with clients. Additionally, in many cases, application development also resulted in the introduction of newer manual processes.
For the reason of having an understanding of the application since they developed it, as well as enjoying the confidence of the client, software companies won mandates for business process outsourcing and set up independent units for handling the business.
Accenture, Infosys, TCS and HCL Technologies are some of the major software companies with a significant presence in the BPO space as well.
oWorkers offers super secure facilities & protocols for client data security with ISO certifications (27001:2013 & 9001:2015). It is also GDPR compliant.
Pure play providers – These companies do not have a prior connection or legacy through which they reached the stage of offering BPO services.
These are set up purely for the purpose of providing these services.
In fact, some of them, after setting up BPO, have expanded into the software space as they perhaps found opportunities existing with clients going abegging.
Genpact, Concentrix, Sitel, WNS, EXL Holdings and Teleperformance are some of the better-known pure play BPO companies.
As a pure play provider, their partnerships with technology companies enables them to use the most advanced technologies for client work.
BPO industry overview : Features and Highlights
The capacity of the industry to create employment is well known. In fact, it creates employment at the lower end of the skill and education scale, which, in most places, is even more desirable.
This makes them favorites with political leaders keen to bring employment to their constituencies.
It not only creates employment, but also moves work from high cost to low cost low wage locations, thus smoothing out the disparity between rich and poor.
The industry has demonstrated its flexibility and understanding of business currents by adapting to changing situations.
If call centers were the most common service at a point in time, it soon became Finance and Accounting, Human Resources Outsourcing and Knowledge Process Outsourcing. And that is not where it stops.
Providers have scaled up capability and capacity to offer services demanded by the new age, such as social media moderation and data annotation for building Artificial Intelligence (AI) models, two requirements that have grown rapidly.
The industry can be relied upon to keep pace with changing times.
A BPO industry overview cannot be considered complete without a mention of its role in keeping business running during the outbreak of the Covid-19 epidemic.
Almost overnight, the industry created the resources and technology and support required for enabling their employees to work from home, in view of the strict lockdowns in force around the world at the time.
Many of their clients, who were themselves unable to operate during this period, were able to maintain a semblance of normalcy thanks to tis effort by the BPO industry.
The industry is not just a fair-weather friend.
oWorkers has been at the forefront of this transformation. Each aspect of its business is carefully managed, leading to savings that are shared with clients.
Many of our clients from the US and Western Europe talk about savings of almost 80% when they outsource to oWorkers.
What does the future hold ?
Whichever analyst you refer to, the prognosis is that the BPO industry will continue to grow strongly over the next few years.
The only place where the analysts differ is the expected rate of growth, which varies between a 3% CAGR to an almost 8% CAGR.
A BPO industry overview a few years hence should bear this out.
