Emerging Trends In Business Process Outsourcing
Emerging Trends In Business Process Outsourcing
Outsourcing has increasingly become one of the key management strategies of our times. With an increasing number of companies focusing on core business and strategic partnership, the business process outsourcing has become the norm in the business world. Read on to find out the emerging trends in business process outsourcing.
With companies focusing on core business and strategic partnership, Business Process Outsourcing has become the order of the day. Traditionally, outsourcing started with narrow, low risk activities such as payroll processing, data center management and catering. Now much more strategic activities are outsourced, including financial management, human resource management, supply chain management and even customer management processes.
The scope of the outsourcing relationships has become much broader now. For example, outsourcing of accounting used to consist primarily of accounts receivable collection and payroll. Now, organizations are outsourcing their entire financial transaction processing, recognizing that their own competencies are getting bogged down by undertaking such task themselves, and they could make better use of their time by devoting their time in their core competency.
Countries like India have become the hub of outsourcing services. With the pool of competent, well qualified, English speaking young people, Indian outsourcing industry has shown strong growth trends over the last few years. Indian outsourcing industry has encountered several hurdles in the recent past like outsourcing backlash in the US, data security issues as well as rising cost pressures before gaining a strong foothold on the global outsourcing map.
The recent emerging trends in this sector are focusing on managing their operations efficiently and being innovative to tide through such times.
* Consolidation activity is likely to pick up The adoption of the inorganic growth route to widen the service offerings and enter new geographical markets is the main expectation from the Indian BPO industry. The trend of making aggressive efforts to de-risk their business and diversify their client base will intensify further. Alternatively, the growing maturity of buyers in Europe, Middle East and Asia is opening up these lesser explored markets.
* Diversifying from core geographic markets The Indian BPO companies are expanding their business from core markets such as the U.S. and UK to Australia, other parts of Europe and Asia-Pacific, as these markets were unfavorably affected by the worldwide financial crisis leading to a decline in their overall IT spending.
* Shift in focus from cost arbitrage to value addition The integration of IT and BPO, to what is often called platform based BPO, as well as the emergence of "Business Process Restructuring" into the lexicon of service providers has been underway for a while now. Several service providers are now adding the knowledge component (analytic/legal services/consulting) into the mix, in an attempt to deliver greater value.
* Rural BPOs will make their presence felt The Indian BPO companies are slowly stepping towards rural areas to set up delivery centers due to rising attrition rates in urban areas and lower cost of operations in rural areas, which is also supported by growing real estate construction in rural area.
In addition to its cost effective advantage, India has high-end technology, best-of-breed infrastructure and time zone edge. These benefits along with steady recovery and growth in the major markets such as US and Europe, and expansion to other prospective markets, according to NASSCOM, Indian IT and business process outsourcing companies are likely to grow three-fold in revenue by the end of this decade.
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