India Continues To Lead The BPO Market

According to the reports by Market Vista: Q2 2009 on global outsourcing, the outsourcing transaction volume increased by 10 percent globally in the second quarter as compared to the first quarter this year. These reports were issued after the contracts being signed by the financial services and manufacturing firms.

Everest Research Institute, the global outsourcing and offshoring activity serves as a central source of independent and objective strategic intelligence and actionable insight for leading corporations, technology providers, suppliers and investors in the global outsourcing and offshoring market place.

During the second quarter of the fiscal year, out of 30, 13 offshore call centres were established in Asia. In the same period, the transaction volume in Asia-Pacific, Middle East, Africa, Latin America increased by 25 percent Nikhil Rajpal, Principal, Global Services said that, there has been significant increase in market as compared to Q1 2009 in terms of transaction signings and captive set ups.

HCL BPO To Set Up A Training Institute

The BPO wing of HCL Technologies, one of the ITes service providers, is planning to set up training institute. The institute is likely to come up in Chennai in a year’s time. It will create a pool of quality resources that will be useful for HCL itself as quoted by A. P Rao, the senior vice –president (human resources).
Due to recession many professionals have got into BPO services. HCL has created an innovative method to increase the quality of working conditions in order to retain the existing talent. This new programme is called “Aspire”; under this programme the company will offer training programmes to professionally qualified professionals.
This training programme will enable professionals to move HCL’s IT services. If a BPO employee undertakes this training programme he will have to work for four days and on the fifth day he will have to attend the training programme. This training programme will jointly conducted by NIIT.
So far, HCL has already enrolled 400 employees after taking the test from BPO services to IT services. This year so far 500 employees are getting trained. Though the training is imparted at HCL organization, the company charges a course fee of Rs.50,000. However the company would pay back the course fee in two years.
Mr. Rao said that due to downturn, it has become necessary for any organization to improve efficiency through innovative ideas and most of the organization is reducing the attrition rate and quality of working conditions.
Mr. Rao added that, the existing head count in HCL BPO services was 10,000 and it hoped to grow by 25 percent next year.

BPO Industry Faces Tough Phase

The Indian BPO companies that grew at a blistering rate of 30-32 percent for many years have almost halved to growth rate of 16.3 percent in the financial year 2008-09. They are likely to plummet further to 4-7 percent in this financial year due to economic slowdown.
The software exports revenue is projected to grow at a mere 4-7 percent to reach $48-50 billion in the year 2009-10 as said by the industry association Nasscom.
Earlier in February, Nasscom had reduced the growth target for IT exports to 16 percent from its forecast of 22-24 percent that was made in the mid of 2008 for the financial year 2008-09.
The major reasons for decline in BPO industry is technology spending by global major, pricing pressures, delay in demand pick up and overall bleak economic outlook.
India’s largest software exporters Infosys and TCS have predicted tough business environment this year. Domestic IT- BPO revenue grew by 21 percent to touch Rs 12.5 billion in the financial year 09. The total industry revenue for domestic and exports was $58.8billion in the financial year 2008-09.
According to Nasscom findings, the domestic revenue is expected to grow by 15-18 percent in 2009-10. The BPO sector has reached $58.8 billion in 2009-10 from $52 billion in 2007-08.

Paramount Plans to Outsource

Hollywood’s largest revenue source, Viacom Inc’s Paramount Pictures is in talks with other studio to outsource the back office portions of its home-entertainment operations. This is an attempt to cut back on costs in the declining markets of DVD’s.
Paramount is trying to explore a potential outsourcing agreement with News Corp’s Twentieth Century Fox, Sony Corp’s Sony Pictures and General Electric Co’s Universal Pictures.

Sony is one of the leading contender as it has both manufacturing and distribution operations in house. The executive of Sony confirmed that, the company is in talks with Paramount to handle Paramount’s DVD distribution and back office functions.
Under the potential agreement, Paramount could handle marketing and sales for its DVD’s. Its studio partner will handle production and distribution which will be in exchange for a fee. Outsourcing these operations to another studio will help paramount to save somewhere between 410 million to $20 million annually.
This is not the first time that a Hollywood studio is outsourcing its back office operations to save costs. Twentieth Century Fox handles the domestic home video production of Metro-Goldwyn-Mayer.

Some decades ago, Universal and Paramount distributed films internationally through the same company named CIC video owned by Cinema International Corp. For years the sale of DVD’s was high in Hollywood Studios. This allowed the producers to spend on big budget films than to pay lavish salaries to top movie stars.
The format of disc format was hit hard by the economic recession at the end of 2008. This caused a dip in sales of DVD’s by the last quarter. The sales have continued to slide and some studios are reporting declines which are as large as 20%.
These massive declines have forced Hollywood studios to find out ways to cut down on costs especially on high manufacturing and shipping costs that can make an impact on studios like Paramount.

According to Adams Media Research, the gross U.S video of Paramount including the titles it distributes for DreamWorks Animation fell to 3.4 % which was about $2.61 billion. This drop was less than many studios that included Fox and Sony.
Paramount faced some of the major challenges which included the departure of its top home entertainment executives as well as restructuring of top level executives and 31 layoffs in the production department.

Aegis Plans to Acquire BPO Firm In Africa!

Mumbai: Essar group’s BPO arm Aegis Ltd is looking to acquire a Business process outsourcing company in Africa.

Essar Global Chairman Shashi Ruia said in a press conference that Aegis is looking to acquire a BPO company in Africa; however they did not disclose the details.
Aegis BPO's Chief Executive Aparup Sengupta said that, they wanted to have their footprint in South Africa as it is one of the developing BPO market. He added that, the acquisition or assets purchased will be in the area of customer lifecycle management space.

Over the last three years, Aegis BPO has acquired 12 firms worldwide. Recently it has acquired an Australian BPO service provider, UCMS group which was bought for AUD 45 million last month.


Last year in October, Aegis BPO has acquired NASDAQ listed offshore BPO firm for 1,057 crore. This has enabled the Essar Group Company to add Philippines to its list of delivery locations.

The company had earlier said that in a press meet that, it had plans to acquire four BPO companies. The merger and acquisition team of Aegis at any point of time evaluates at least six targets. Therefore this time it is eyeing in an African BPO company.

BPO Vendors Plan to Extend Offerings !

Bangalore: Some firms like Wipro BPO are adding newer processes to their service offerings. Even Hinduja Global sees growth in areas like customer service management from other verticals. Other companies like Kale Consultants plans to add more platforms.

The Indian BPO industry is relatively less affected during this current downturn than its other counterparts. The business process industry is planning to expand its services offerings to cater incremental growth as existing customers look to outsource more to reduce costs.

Mr. Ashutosh Vaidya, head of Wipro BPO said that the company is adding more processes to cater to the growing needs of customers. As the sales cycle stay elongated the BPO vendors expect growth from existing customers. Even small BPO firms like Caliber Point, one of the subsidiary of Hexaware Technologies is seeking for more projects from its existing clients.

Mr R. U. Shrinivas, CEO, Caliber Point expects to leverage the expertise of its parent Hexaware to build newer solutions and processes. This is so because about 30 percent of its customers are seeking to do more work.

The independent BPO firms are however looking for partnership with the IT vendors to launch solutions. Mr Partha De Sarkar, CEO, Hinduja Global Solutions, said that it does not make sense for them to develop solutions on their own as they are capital intensive and the returns on investments are unpredictable. Mr. Sarkar said this while stating that his firm has partnered with system integrators, software vendors and hardware companies.

Hinduja is bidding as a consortium for projects and sees good demand in areas such as customer relationship management across different verticals which has partnered with Talisma and Astute Solutions.

Kale Consultants which mainly offers platform based back office services in areas such as billing, ticket sales audit and revenue accounting plans to add more platforms in other areas too. Mr. Vipul Jain, CEO of Kale Consultants said that, some of their customers are using one or two platforms. He added that, people are more willing to outsource while looking at the value proposition more strongly.
According to National Association of Software and Services Companies, the Indian BPO industry is expected to grow at a rate of 15 percent marginally ahead of the IT services.

President Approves Of Malabon Call Centre Training Program!

Manila, Philippines: The local government of Malabona, one of the cities in Philippines announced free training seminars for prospective call centre agents. It has recently graduated 90 individuals who are now on their way to work in the county booming business process outsourcing service.

The vice mayor of Malabon Arnold D. Vicencio said that, all of the above mentioned individual will be given certificate of attendance and completion by this June.
Vicencio added that most of their call centre trainee graduates are undergoing training in call centre firms in Makati and Ortigas to learn about the various BPO services. A call centre is a centralized office where an agent handles telephone calls on behalf of the client or business. The one who takes calls is known as customer care specialist or customer service representative.

The clients include telemarketing companies, mail-order catalog houses, transportation and freight handling firms, hotels and IT companies. Generally, the size of the operation is defined in terms of number of seats. A seat consists of station with two or three people alternating in several shifts to provide 24 hour support services. The main target of BPO industry includes United States, United Kingdom and Australia.

Vicencio added that presently his staff is planning their second call centre training session and said that the classes will start in July for the next batch. The students who enroll in this program will be taught how to speak correct English, correct usage of grammar and diction. They will also be trained on basic usage of call centre equipments like speaker phones and computers.

The Malabon vice-mayor added that, all instructors are accredited by the Technical Education Skills Development Agency (TESDA) and the Department of Labor and Employment (DOLE). Therefore there is no doubt that, they will offer best training to the students.

Vicencio also said he decided to arrange for a training program after knowing that, the BPO industry needs an additional of 1,20,000 workers this year as recorded by DOLE. This growing demand has prompted President Gloria Macapagal- Arroya to pass an order for the Technical Education and Skills Development Authority (TESDA) and the Business Process Association of the Philippines (BPAP) to immediately conduct training and other re-tooling programs that would transform computer engineer and other skilled professionals into highly professional call centre agents.

President Arroya earlier justified that this re-tooling directive for engineers and electronic manufacturing after learning that despite financial crisis employment opportunities are still there in the BPO industry. These are animation, medical, transcriptionist, software developers and other call centre services. President called the BPO industry as the new symbol of competitiveness.

Till now, Arroyo administration had released P500 million for high school vouchers so that, the young generation can study in high schools. Another P500 has been invested in finishing schools where scholarships will be available for a young Filipino. This will help him or her to cope up with the requirement of the industry especially fluency in English language. She added that they have moved the value chain and Philippines will continue to support the BPO industry with right policies.

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This blog covers parent's and students insecurity about opting BPO as a career option.There is a great dilemma about bpo , that whether Bpo is a long term career option or just a place to make some good bucks.