Outsourcing Times

Are BPO Employees Over-stressed?

There has been a debate over the stressful life living by BPO employees in India. This is a sensitive issue and requires proper attention. A few days ago, I came across a news article titled " BPO firm employee held on charge of killing colleague". It immediately caught my attention, as I believe it is somehow related to the stressful BPO lifestyle.

The incident occurred in Bangalore, where an employee of Aviva 24/7 BPO unit, murdered his female colleague and dumped the body on a different location. According to the police sources, the murder was the result of a love-hate relationship between the duo.

If an argument or a conflict results in a brutal murder, then we have every reason to believe that the accused was not living a healthy life and he was not a stable frame of mind. Can it be attributed to the burnout in BPOs? It seems that the concerned BPO and the police are dubbing the incident as a fatal attraction that ended in a tragedy. However, nobody bothers to see the other side of the incident. It's high time we wake up to such incidents and find out the exact reason why our well-qualified employees go brutal and violent in small matters.

Role of Enterprise Risk Management in Outsourcing

It has been noticed that companies import risk from external organizations via links through enterprise resource planning (ERP) and supply chain management (SCM) systems. However, the fastest growing source of importable risk is from your outsourcing partners. Evidences suggest that the quantity and scope of enterprise risk from outsourcing is expanding rapidly. Many small and medium sized companies are now relying on outsourcing through their IT systems.

Although outsourcing brings efficiency and cost saving, a poorly managed outsourcing relationship may put your entire IT system at risk. When you have options, why take a risk? It is strongly recommended that ERM must be extended to your outsourcing partners. That will definitely negate the strategic and market risks associated with your organization.

Is The KPO Boom Over?

Until recently, the Knowledge Process Outsourcing (KPO) boom was hyped in the industry and in media. It was touted as the future of thousands of professionals. However, if we are to believe the recent reports, the much-hyped KPO boom may be over soon. A huge supply gap is all set to cripple the growth of KPO industry.

The evidence gathered by RocSearch, suggests that the KPO market may just reach $5 billion by 2010 instead of the earlier projection of $12 billion. What could be the possible reason for the downward trend in KPO industry? Do you believe that there is a knowledge crunch, which is affecting the KPO growth?

According to The Times of India -

Assuming an average revenue per person of $55,000 over the next four years, 100,000 knowledge workers point to a $5 billion market. This size, though based on a CAGR of 32%, is still 60% less than the $12 billion potential projected by big KPOs, like Evalueserve, last year.

Now It's the Turn of Mortgage Lenders to Join Outsourcing

In the past couple of years, we have been receiving news on how industries one after another are outsourcing their jobs to low-wage destinations. Now it's the turn of mortgage lenders to join outsourcing wave. According to NelsonHall, the leading independent BPO analyst firm, mortgage lenders in the United States are outsourcing their work to India and other countries. In the recent months, mortgage industry has emerged as a strong force in the US and elsewhere in the world.

The high demand in mortgage products and services has forced the lenders to choose third party companies that can manage their work efficiently and effectively. Now customers want their mortgage BPO providers to add cost of processing to volume processing so that costs can be better matched to business volumes. It forced mortgage organizations to look for an improved process compared to their in-house capability. According to NelsonHall report, the global mortgage BPO market will double in size over the next five years.

Data Security Tightened in India

Recently, I had written a post on how offshore clients were losing trust on Indian BPOs because of cases of security breach. The post was titled, “Is the Future of BPO Industry Secure in India?” Now it seems that India outsourcing industry has woken up to the gravity of the situation.

After the recent incidents of data theft at call centers, finally the Indian outsourcing industry joined forces to implement a number of security measures. The industry acknowledged that such incidents would undermine the outsourcing expansion in India. The BPO firms in India have initiated a voluntary registry for call center employees. That will help employers to perform background checks on prospective employees.

In a major development, an independent self-regulatory body under the aegis of the National Association of Software and Services Companies (NASSCOM) was created. The body will look after the problems facing by BPO industry and find solutions to resolve those.

Data security and privacy have been seen as major barriers to global trade. Outsourcing companies in India are aware of this. Hence, they are trying to improve the security in their organizations. What do you think about the security measures taken by Indian outsourcing industry? Will it help the industry to restore the faith of offshore clients?

Outsourcing storm brewing in schools

Controversy and outsourcing have almost gone hand-in-hand, but in most industries the logistics have worked in favor of outsourcing. In schools, too, considerations of saving money and releasing in-house resources for core school requisites are beginning to work their way through controversial roadblocks.

School authorities in Michigan want to concentrate on their main business of educating students, and are happy to push the management of ancillary services—such as food, custodial, and bus services—off their plate. Private companies are willing to step in, offering these services at competitive rates.

The school authorities might be happy, but people who are losing their jobs to private companies are certainly outraged. For example, 29 custodians and 4 food service workers have lost their jobs in Garden City alone. Yes, some of these workers will get absorbed by the private service providers, but at much lower wages.

Quite naturally, jobless workers are spearheading the move to recall board members in several schools, including Garden City Board of Education and Lakeview Public Schools in St. Clair Shores.

Detroit Free Press has much more on this controversy.

$88 billion in outsourcing contracts up for grabs: new suppliers, line up!

All outsourcing contracts are time bound. As an outsourcing deal meanders toward its logical conclusion, it is a jittery time for the outsource vendor: will the outsourcer renew the contract, or simply dump the vendor in favor of another? It is certainly a time to retrospect and redefine outsourcing relationships.

The time is also one of opportunities for new suppliers. A show of one-upmanship can help them snatch a juicy outsourcing deal. According to a report by Everest Research Institute, outsourcing contracts worth $118 billion are due to expire between 2006 and 2008. While some existing relationships have firmed up and a quarter of this amount has been pushed back to status-quo relationships, contracts worth $88 billion are yet to be decided.

Some of the large existing IT contracts are likely to give way to multiple smaller contracts, and this leaves the door open for new players to flaunt their wares. In this situation, the big global suppliers such as CSC, EDS, and IBM are entirely justified in feeling the pinch of competition.

Weavers in south India: Weaving an outsourcing network

Outsourcing is usually practiced across cross-country borders. However, there is a smaller play alive and kicking within India. Weavers formerly engaged in the production of the famed Mangalagiri sari in south India are facing the crunch of rising production costs and excessive trade unionism, and are now outsourcing production.

Between Srikakulam in the north and Prakasam in the south, a network of weavers produces the Mangalagiri handloom. No longer confined to Mangalagiri, the "Mangalagiri handloom" product has developed as a brand, and this “grassroots-level” outsourcing will continue to thrive so long as the outsourced products maintain the same quality and finesse.

Read more.

Just how real are outsourcing fears?

I recently came across an article that cast a number of doubts over the outsourcing model. According to the article, outsourcers focus the entire offshoring business toward cutting costs, and neglect the quality aspects. If you take the article at face value, it is natural that you will think twice before outsourcing your business processes.

However, let us see just how real this fear is.

Think of an outsourced business. Yes, the basic objective is to cut costs, but with so many vendors vying for a place in the market, the outsourcer has plenty of options in selecting the outsourcing partner who is most suitable to the specific project and has the infrastructure and capability to execute it with finesse. So the onus is really with the outsourcer to find a capable partner. Every market has a few rotten apples, and this is true for outsourcing as much as for any other market.

The article cites the example of a call center that doesn’t handle client responses well enough. But hey, there are a number of checks and balances in an outsourcing deal which can ensure correct practices. There is talk of closing down a call center based in Bangalore (India). But what is the guarantee that the same situation will not arise even in-house?

The other fear raised about outsourcing is that an outsourcing vendor will not be able to adapt to changing practices and market requirements. But again, it is really upto the outsourcer to be foresighted enough and build such possible changes into the outsourcing arrangement from time to time.

Outsourcing ultimately boils down to a marriage of convenience between the outsourcer and the vendor. It is a sword that cuts both ways. A strong future-oriented relationship can trigger a long relationship. Believe me, outsourcing works—it is  not for nothing that a hoard of outsourcers are making a beeline toward countries like India and China. You don’t have to take my word for it; in an older post, I mentioned research findings that back up this fact, and more recent articles continue to point to a growth in the outsourcing business.

$112 million BTO outsourcing contract in the kitty for IBM Japan

Japanese consumer finance company ACOM has outsourced its loan, credit card, and installment sales finance business to IBM under a 10-year BTO contract. While IBM extends its BTO portal and money resources with this contract, ACOM has signed the deal to computerize the data on 34 million pages, which was hitherto maintained in paper format.

After computerization, IBM will help ACOM store the documents and make them more accessible for the front-office network.

Global Services Media has more.