This project will consist of a thorough organizational study of Progeon, the BPO subsidiary of Infosys, on the lines of McKenzie's 7-S framework. The framework would be loosely adhered to and each of the S' will be analyzed along different dimensions. Methodology adopted Phase 1: The first phase of the project involved secondary research on the Indian BPO industry and Progeon in specific. It included information gathering on Progeon, its competitors, current market scenario and potential threats.
Phase 2: This phase involved a visit to Progeon to communicate first-hand with the various head of departments and the employees to get a "feel" of the organization and clarify doubts and issues that came up during phase 1. We also benefited from the structured tour of the facility and a one-hour presentation on Progeon, its goals, strategy and future prospects. Business Process Outsourcing Business process outsourcing is defined as the delegation of the ownership, administration and operation of a business process or processes to a third party or to an external service provider. A customer servicing BPO company is typically run with the help of many call centers.
Call center It is a functional area within an organization or an outsourced, separate facility that exists solely to answer inbound or place outbound telephone calls. It usually refers to a sophisticated voice operations center that provides a full range of high-volume, inbound or outbound call-handling services, including customer support, operator services, directory assistance, multilingual customer support, credit services, card services, inbound and outbound telemarketing, interactive voice response and web-based services.
Types of BPO industry The three options available to run a BPO centre are: 1. Captive facilities 2. Third-party 3. Outsourcing joint ventures The captive facility option provides the greatest savings and control. However, it is often the most difficult and takes the longest. In India, GE , Accenture and American Express have led in setting up captive facilities – in part because they already had significant presences in that country. The third-party outsourcing option reduces the risk and time of setting up operations – but it also reduces cost savings. Daksh, Spectramind, Vcustomer, 24/7 Customer.com and Transworks are among the leading Indian call center outsourcers. Their global clients include Amazon, Yahoo, Dell, Avis, Ramada and several other players.
Joint venture is the third option. A recent innovative Joint Venture arrangement is Build, Operate and Transfer (BOT). Under this model, an Indian company helps set up the Indian operations that the Joint Venture partner has the option to eventually take over. This benefits both parties. It enables the foreign company to get its operations up and running quickly, while guaranteeing a takeover option. And it gives the Indian company the references and credibility to become an established player. BOT usage is expected to increase over time. The right approach for a company depends on how quickly the offshore operation needs to be up and running, the degree of control required, the company's knowledge and experience in the offshore location, the financial implications and the availability of management resources.
Indian BPO Industry The Indian BPO industry has evolved significantly over the past few years. For Instance the size of the Indian BPO industry has increased to Rs 71 billion (bn) in FY2002 from Rs 24 bn in FY2000. IN FY2003 the size of the Indian BPO industry has touched Rs 117 bn. The evolution growth of the BPO industry in India has been facilitated by the global economic meltdown. India is in the fourth phase of growth in the BPO sector.
First phase of Evolution: In the first phase of evolution of the BPO industry in India lots of MNC's started their own captive units in the country. The primary functions that were carried out were customer support and transaction processing. Amex came to India in 1993, British Airways in 1996 and GE in 1998. Second Phase of evolution: In this phase, BPO units were set up in Indian by the MNC's, NRI's, Indian independents and Indian subsidiaries. Established software services have ventured into this business in 2002 by establishing subsidiaries.
Third Phase of Evolution: The third phase was characterized by the ncreasing trends towards geographical dispersion of activities; M&As have also taken place within the industry in this phase. Fourth Phase of Evolution: N the current and the fourth phase there is an increasing trend towards Indian companies acquiring small to medium size businesses in overseas locations. These foreign acquisitions mark a contrast to the practice of foreign MNC's setting up BPO units in India to take advantage of the lower costs here.
Also these acquisitions are probably in the nature of a market entry strategy. Key Sub Segments of the Indian BPO industry The main sub segments of the Indian BPO industry are: 1. Customer care: This segment consists of mainly telephone based service centers or call centers performing specific customer centric activities like database marketing telemarketing, and web sales. According to industry estimates there were possibly over 300,000 call centers worldwide by the end of 2002. Employing around 18 million persons. In India there are around 250 call centers employing about 33800 people. The size of this segment in FY2003 was $700mn.
2. Finance: This segment covers all activities related to billing accounting transactions, tax consulting and compliance, risk management, financial reporting and financial analysis. In particular this service is utilized by industries like banking and airlines, which have to process voluminous data and draw conclusions from them. Typically service providers in this segment enter process and reconcile the data sent to them by the outsourcing firms. The size of this segment during FY2003 was $450 mn. 3. Human Resources: In this segment service provides undertake business process relating to administration, education and training , recruiting and staffing , payroll management , hiring and record management on behalf of their client firms. The size of this segment in India was $35 mn in FY2003.
4. Payment services: In this segment service provider undertake business functions including cheque and transaction processing besides offering services related to credit or debit cards. The size of the payment services segment in India was $ 190 mn in FY 2003. 5. Administration: This segment covers business functions like tax processing, claims processing, asset and document management, transcription and translation, in medical transcription for instance the service provider typically offers its services to hospitals, clinic, emergency departments and medical professionals. This segment was worth around $350 mn in FY 2003.
6. Content development: This segment covers services including engineering, design, animation, network consultancy and management and biotechnological research. For instance digital content developers manage website of firms, besides producing content for Internet-enabled television. Typically the functions of service providers in this segment include defining a set of rules and norms for collection of data, collating data from various sources sorting, indexing, shifting, and compiling data and finally converting data into the digital formal and disseminating the same to various users. The size of this segment was about $650 mn in FY 2003.