Is That Business Legitimate or a Scam?

The FTC is drafting new rules to counter unfair practices. In the meantime, aspiring business owners should apply lots of common sense

by John Tozzi
July 23, 2008, 1:33PM EST | BusinessWeek

The Internet is littered with offers for home-based business opportunities that promise big profits for easy work. But many of these offers, which range from envelope stuffing to medical billing, are really scams that prey on people’s aspirations to work for themselves.

Business opportunities share three characteristics: a solicitation to the buyer, a mandatory payment to the seller, and a promise to help the buyer find locations or leads that will bring profits. They’re often advertised in classified ads, online, and in spam e-mail. Many claim to be low-risk ventures with money-back guarantees, and no experience necessary. Offers stress how much the participants can earn each week in specific dollar amounts, and fraudsters often have shills who falsely testify about their own success.

While some home-based business scams target vulnerable people such as the unemployed, experts say anyone can be taken in by the right pitch. “The techniques are no different in kind from the ordinary marketing techniques that normal sales people use. They’re just selling nothing,” says Michael Webster, a Toronto lawyer and the author of a blog on business opportunity fraud. “Anybody can be a mark on any given different day. Even I could be.”

Fraught with Deception

The Federal Trade Commission regulates many business opportunities under its franchise rule (BusinessWeek.com, 3/10/08). But for the first time, the agency is drafting regulations to cover home-based business opportunities and schemes that require investments under $500. The new rule would apply to about 3,000 business-opportunity sellers, including 500 not currently covered by the franchise rule, and the FTC estimates that about 250 opportunities pop up each year. (That number doesn’t include opportunities that drop out.) FTC attorney Monica Vaca could not estimate how many are scams but said in an e-mail that the industry “is fraught with unfair and deceptive practices.” The rule change would require sellers to disclose information to potential buyers, in much the way franchises must. It could go into effect in 2009 or 2010.

The average business opportunity scam runs for 12 to 18 months, ropes in 100 to 150 people, and takes a total of $3 million, Webster says. The FTC has taken about 240 civil actions against business-opportunity sellers since 1990, according to Vaca. The government also prosecutes a handful of cases under criminal law when repeat offenders are involved. But many home-based business scammers are never caught or punished. When victims lose money, they’re often reluctant to report the fraud. Instead, they blame themselves for their losses. “One of the things that’s tough about business-opportunity frauds is a lot of people have a hard time recognizing that they’ve been scammed. Everybody wants to live the American dream,” Vaca says.

Typical scams involve charging buyers up-front fees for materials, training, sales leads, or locations (for vending machines or kiosks). But the promised returns rarely materialize, and victims get stuck holding inventory they can’t sell. Some home-based business opportunities, such as envelope stuffing, are outright pyramid schemes where the only revenue comes from recruiting new victims, not actual product sales. Others are more subtle, like offers to set up medical billing services, in which buyers pay for training and leads without knowing that most doctors use in-house services or established billing companies.

In addition to the FTC’s proposed regulations, 26 states have their own disclosure laws. Webster says the best way to vet a potential opportunity is to check whether it is registered with the state. “Very, very few of these people are registered, and the fact that they have not gone through the trouble of registering tells you all you need to know about this particular opportunity,” he says.

 

Indians write the BPO script in Philippines

22 Jul, 2008, 0745 hrs IST
Deepshikha Monga & Chaitali Chakravarty, ET Bureau
The Economic Times

NEW DELHI: BPO firms, which have so far been big job creators in India, are now shifting employees from here to emerging outsourcing destinations, including the Philippines.

Not only are domestic BPOs like Genpact, Sitel and Intelenet hiring people in India in droves for their Philippine operations, MNCs like Citibank and Accenture with operations in that country, too, are relying on Indian talent.

“While at the associate level, the Philippines has talent that is comparable or superior to their Indian counterparts, there is a complete void at middle and senior management level. It’s largely Indian executives who fill this void at Indian, local and captive BPO firms in the Philippines,” says Quatrro BPO Solutions managing director Raman Roy.

The Philippines has emerged as an attractive rival outsourcing destination to India, on the back of its large English-speaking population, a slew of fiscal incentives and lower property rates. Apart from the capital, Manila, other places — Cebu, for instance — have also come up as favourites for setting up call centres.

“I have lost five managers in the past one year to BPO companies in the Philippines. The local firms offer superior compensation packages to executives who have cut their teeth with Indian BPO firms,” says head of another BPO firm, wishing to remain unidentified.

Another BPO firm chief says his company, too, has faced talent crunch at senior and middle management positions in the Philippines. He pointed out the example of MNCs — Citibank is a case in point — that employ a number of Indian executives to manage their captive operations in the Philippines.

There is a significant movement of voice processes to emerging destinations like the Philippines and Eastern Europe, says Positive Moves Consulting managing partner Vibhav Dhawan.

“Large MNCs, with presence in India, are expatriating a significant number of Indians to meet their talent needs in the short and long term in these new markets,” he adds.

Genpact, India’s largest BPO firm, went to the Philippines in 2006 and since then, has built a sizeable presence there. Speaking of its strategy to meet talent needs, Genpact president & CEO Pramod Bhasin said: “We start by using a mix of expats from India and hiring locally. The long-term goal is to have grooming and training for the local talent to eventually manage the Philippines operations. That time is, however, another 1-2 years away.”

Adds Nasdaq-listed BPO firm ExlService Holdings CEO Rohit Kapoor: “It’s certainly a challenge to find mid- and senior-management talent in the Philippines. We are dealing with it by taking our senior managers from India while also hiring local talent. So, our country manager, migration and transition and process head are all Indians while the HR head, operations and facilities heads are natives.”

Manila was ranked second among outsourcing destinations in Asia-Pacific by research firm IDC early this year, behind Bangalore. The BPO industry in the Philippines currently employs over 3 lakh people.

 

Software, BPO industry growth will slow down in 2009: NASSCOM

The Economic Times

NEW DELHI: The software and business process outsourcing (BPO) industry’s growth is expected to slow down considerably next financial year, the organisation representing the Indian software industry says in its annual report released Wednesday.

The National Association of Software and Service Companies (Nasscom) report said while the industry clocked a combined growth rate of 28.2 percent in 2007-08, this is expected to slow down to between 21-24 percent in the next fiscal.

But even the projected growth rate of 21-24 percent is “robust” and in sync with the industry target of achieving $60 billion of exports by 2010, Nasscom president Som Mittal told reporters.

He said the industry was “right on target” to achieve the 2010 export goal.

“In the last eight years the average growth rate has been 33.7 percent. We have had as much as 50 percent growth in a single year initially. But it is natural for the growth to stabilise as the industry grows,” he said.

The gross revenue from domestic as well as export markets increased to $52 billion in 2007-08 as compared to $39.6 billion the year before.

However, the growth rate fell from around 33 percent in 2006-07.

Exports of information technology (IT) services alone grew by 28.2 percent to gross $23.1 billion, while the BPO sector showed an increase of 30 percent, fetching $10.9 as compared to $8.4 billion the previous fiscal.

Mittal said the industry handled the subprime mortgage crisis in the US well by venturing into industries that were not affected, such as transport, telecom and healthcare.

He, however, admitted that 2007-08 was a “difficult” year because of slowdown in the US economy, the oil and food crises, and currency fluctuations.

Mittal said the full impact of the situation in the US is yet to be felt by Indian companies, and that corporates would have to find ways to cut costs and enhance productivity.

“The cost-cutting measures can have an impact on recruiting process of these companies and the pay-packages offered to fresh graduates,” he added.

IT services and the BPO sector has a two million-strong workforce that is increasing by 26 percent annually, the Nasscom report stated.

Mittal brushed aside concerns about the future of outsourcing as it has become a major issue in the run-up to the presidential elections in the US.

“In 2003-04 elections also, offshoring had become a major issue, but the industry has only grown ever since. It is more of an emotive issue. Barack Obama, (the Democratic hopeful) who once voiced his concerns about outsourcing recently acknowledged its importance and referred to it as ‘inevitable’,” he said.

 

Coping with attrition

July 14, 2008 | The Hindu

The BPO industry in India is facing the challenge of finding quality human resources, given the current attrition rate.

Attrition is emerging as a key business concern for organisations. It is turning into a bigger issue than attracting talent. The annual attrition rate is 20-30 per cent (reduction in the number of employees through retirement, resignation or death) across industries in India. It is as high as 44 per cent in BFSI (banking, financial services and insurance) vertical and 35 per cent in BPO (business process outsourcing). Attrition is an expensive phenomenon, potentially impacting the bottom line of businesses.

The cost of attrition is not just the loss of that employee but it includes an array of hidden costs such as recruitment costs, selection costs, training costs, cost of covering during the period and opportunity costs.

The organisational costs associated with the turnover in terms of hiring, training and productivity loss costs can add up to more than five per cent of an organisation’s operating costs, says Cabot Jaffee, Chairman, Global Talent Metrics.

As far as India is concerned, attrition is a serious trend, especially in today’s knowledge-driven marketplace where people are the most important assets. While organisations cope with attrition by devising compelling retention strategies, it is imperative for organisations to predict attrition early in the recruitment process to curtail loss of time, cost and effort.

What is the biggest challenge for the BPO industry in India today? Well, it is none other than attrition. The BPO industry in India, which is expected to employ around one million people by 2008, is facing the challenge of finding quality human resources, given the current attrition rate. According to NASSCOM, the outsourcing industry is expected to face a shortage of over two lakh professionals by 2012. Where is it leading to?

According to Jaffe the challenge of attrition, though not special to India, is unique and intense in a manner not seen in other markets across the world. “This makes it imperative that any knowledge or psychometric tools in this area be locally validated,” Mr. Jaffee says.

However, many industry officials feel that results shown by a psychometric tools (designed to eliminate high attrition risk during the selection process) and attrition are not necessarily correlated.

Survey findings

Global Talent Metrics has conducted a survey in partnership with IIM Bangalore and AlignMark of the U.S.-based tools provider for optimising human capital resources, on the attrition rates in India. The survey reveals that pay, contrary to popular notion, is not the top reason for attrition.

Lack of career growth opportunities and recognition from supervisors are more compelling drivers for attrition. Nearly 50 per cent or more people rate the following four important factors in selecting or leaving a company — clarity or career path, relationship and recognition from supervisor, career growth opportunities and pay. About 70 per cent of the respondents do not consider family-oriented events as important factors to leave a company, although employees conveniently use family-oriented events like marriage, childbirth, need to stay closer to family — as explanation for departure.

Mr. Jaffee feels that to control the attrition levels in an organisation, it should adopt certain recommendations. Fundamentally, a company should select candidate whose preference and aspirations are in line with what the company has to offer. Since job content is key driver for attrition, a well-institutionalised job rotation programme will be a great retention strategy. The company should provide career growth opportunities along with rewards and recognition. The most important aspect is open communication and fair treatment. Along with an open culture, these will increase retention of staff. The last but not the least is the brand image of the company. It will surely stop an employee from moving out.

– SHANTHI KANNAN

 

Acute Cost and Growth Pressures to Drive Large-Scale BPO and ITO Outsourcing/Offshoring in Healthcare Sector over Next Three to Five Years

July 08, 2008 09:30 AM EDT | BUSINESS WIRE

HOUSTON — The slumping economy may be slowing deal flow in some sectors, but it is accelerating adoption of outsourcing in the healthcare industry as it struggles to streamline its back-office and ramp up to meet increased demand for services as the U.S. population ages, according to EquaTerra, a leading business advisory firm. In its newly released poll of leading outsourcing service providers on the state of the healthcare outsourcing market, EquaTerra expects these competing macro economic trends to drive large-scale outsourcing and offshoring deals over the next three to five years, especially in business process and information technology outsourcing (BPO and ITO).

Half of the respondents to EquaTerra’s 2Q08 Healthcare BPO/ITO Service Provider Pulse Survey* report demand is up quarter over quarter and 70 percent expect an increase next quarter. The scope of healthcare outsourcing is expanding too as healthcare organizations attempt to gain efficiencies through greater automation, self-service capabilities and improved IT infrastructure and functionality.

Typically, healthcare companies that are currently outsourcing have already reduced labor costs. Now, they want to achieve business process improvements via technology, business process reengineering and implementation of Six Sigma methodologies. As a result, they are prioritizing their outsourcing goals and focusing on functions and processes core to healthcare front and back-office operations. Seventy percent of healthcare services providers polled cited vertical healthcare business service areas, like claims administration and revenue cycle management (RCM) as the top areas of outsourcing demand in the market today.

Outsourcing buying patterns also appear to be changing. There is an emerging trend toward consolidating work sourced to several providers (e.g. claims imaging, data entry and claims processing) to a single, large vendor that can handle the entire claims function. In addition to standard BPO services, the clear expectation from this single-source solution is overall business transformation plus value-added knowledge services, including claims analytics, collections and reserve forecasting.

The survey also indicates more healthcare industry work is moving offshore to both India-based and multinational service providers. IT infrastructure monitoring and support along with RCM were identified as the two functions using the highest levels of offshore talent. Cost reduction continues to be a major impetus, but there’s also a significant shift to more strategic activities, according to 65 percent of the survey participants. As a result, outsourcing buyers are migrating from a contract labor model to longer-term, project-based work and multi-year outsourcing efforts that require greater control over functions and processes. Service providers cited the top two drivers for the increased use of offshore resources as immediate access to expertise and talent (50 percent) and knowledge services (42 percent).

To compete for this upscale work, outsourcing providers are developing more compelling offerings, according to Mark Voytek, healthcare industry practice lead for EquaTerra. “Healthcare companies need tools that support effective fiscal management and IT applications that can automate clinical processes and assist in improving quality, especially reducing medical errors. The low upfront costs associated with outsourcing versus a total-cost-of-ownership model is especially attractive in the current economy.”

Voytek’s thoughts are echoed by an executive from a leading healthcare service provider who says escalating costs and cuts in Medicare and Medicaid payments coupled with the increased demand of an aging population threaten the solvency of many U.S. hospitals. “Sixty percent of U.S. hospitals are already unprofitable and rely on charity and donations for supplemental funding. Cuts in claims payouts will further shrink revenues just as more Americans will utilize health services. The number of hospitals that are highly unprofitable will grow unless they adopt large-scale outsourcing and offshoring to reduce overall cost levels.”

Top-line finds from the 2Q08 Healthcare Service Provider Pulse Survey:

• Outsourcing service providers (82 percent) said the healthcare payer industry exhibits the greatest demand for BPO and ITO services. The healthcare provider market ranked second (73 percent.)
• Costs savings are still paramount, but 75 percent of the service providers polled report buyers are putting greater emphasis on process improvement, innovation and transformation.
• EquaTerra estimates approximately 75 IT and BPO deals were initiated from 2004 through 2007 with a total contract value (TCV) of $50 million. Of these, 75 percent were ITO deals and 25 percent were BPO. To date, healthcare represents less than five percent of total outsourcing deals in the market, highlighting the relative immaturity of the healthcare outsourcing market as compared to other industries like banking, financial services and manufacturing. But the healthcare outsourcing market is expected to grow at close to 10 percent over the next five to seven years, faster than overall market growth of seven to eight percent.

“The use of offshore and global resources in healthcare outsourcing is accelerating,” said Stan Lepeak, managing director of research for EquaTerra. “In fact, deteriorating economic conditions will likely drive more outsourcing in the healthcare market over the next several quarters.”

*About the 2Q08 Healthcare Industry Pulse Survey

EquaTerra recently polled top outsourcing service providers in the healthcare market. Based on these findings and its own direct market experience, the company mapped the level of buyer demand across several sets of emerging BPO and ITO functions and processes specific to the healthcare space. The demand-level ranking is based on a 1 to 10 scale, with 1 equating to low buyer demand, 5.5 to moderate demand and 10 to high levels of demand. Service providers were asked to comment on current demand and projected levels for the balance of 2008. For more details or to obtain a copy of this survey, please contact Stan Lepeak.

About EquaTerra

EquaTerra sourcing advisors help clients achieve sustainable value in their IT and business processes. Our advisors average more than 20 years of industry experience and have supported over 2000 transformation and outsourcing projects across more than 60 countries. Supporting clients throughout the Americas, Europe, Middle East, Africa and Asia Pacific, we have deep functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes. EquaTerra helps clients achieve significant cost savings and process improvement with internal transformation, shared services and outsourcing solutions. For more information, please contact Lee Ann Moore at +1 713.669.9292; leeann.moore@equaterra.com; www.equaterra.com.

 

Process Improvement, not Cost Savings, Drives India’s Domestic BPO Biz

Posted by Ann All on July 2, 2008 at 3:58 pm | IT Business Edge

Earlier this year, I wrote about India’s burgeoning domestic market for outsourcing. The demand for BPO appears especially strong, as I wrote last August.

Although the forecasts I cited in these posts were optimistic, they now look downright conservative in light of more recent statistics included in this Knowledge@Wharton India article.

The domestic BPO market was worth $1.1 billion in 2007, up from $100 million in 2002, and is now estimated at $1.6 billion to $1.8 billion, notes the article. According to a report by The Everest Group and India’s National Association of Software and Services Companies (Nasscom), the market could be worth up to $20 billion over the next five years.

BPO providers do face challenges in serving the domestic market. For one, says outsourcing expert Ravi Aron, a senior fellow at Wharton’s Mack Center for Technological Innovation, banking and other industries normally served by BPO providers are heavily unionized in India, and will thus face resistance. Last March, I wrote about a threatened strike by state-owned bank workers if the prime minister refused to disallow outsourcing.

Like Europe, India is also filled with a diverse collection of regional languages and cultures. Also, unlike their U.S. counterparts, many potential Indian BPO clients lack the kinds of sophisticated technology platforms that facilitate outsourcing. Their processes are labor-intensive and “idiosyncratic,” says Aron, and thus difficult for BPO providers to replicate on a mass scale.

Process improvement is exactly what most Indian companies are seeking from BPO providers. Not as cost-focused as their Western counterparts, domestic companies want to step up their capabilities in hopes of expanding their businesses into markets outside India.

Expected to be especially popular, according to Aron and other experts, are vertical services such as mortgage loan processing and property and casualty insurance. Says Aron:

Many of these specialized services companies have the money, but not the managerial capacity or bandwidth to automate their processes and extract efficiencies.

Since margins are lower in domestic BPO deals, providers must figure out ways to cut their cost structures. Establishing operations in tier-2 and tier-3 cities is expected to be a common tactic. This should become easier, thanks to ambitious government efforts to improve the infrastructure in these areas, which I wrote about last week.

 

Obama for tough stance against job outsourcing by companies

Sridhar Krishnaswami
Washington, Jun 28 | Press Trust of India

Taking a tough stand against outsourcing, the presumptive Democratic nominee Senator Barack Obama said that the choice is between giving tax breaks to companies that ship jobs overseas or give benefit to those corporations that keep jobs domestically.

“We can keep giving tax breaks to companies that ship jobs overseas, or we can give tax benefits to companies that invest right here in New Hampshire,” Senator Obama said at a joint appearance with Senator Hillary Clinton in Unity, New Hampshire.

“We can have a tax code that rewards wealth and hands out billions of dollars more to big corporations and multimillionaires. Or we can provide a USD 1,000 tax cut to 95 per cent of families in America, start rewarding work and not just wealth, and eliminate income taxes for seniors making USD 50,000 a year or less,” Obama said, adding that’s an agenda for change that we can believe in. That’s the choice that we can make in this election.

“We can allow millions of Americans to work full-time but still not make enough to support their families, or we can raise the minimum wage, index it to inflation, and ensure that hard work pays off in America,” the Illinois Senator said. – PTI

 

India’s march towards knowledge process outsourcing

24th June 2008

By CBR Staff Writer | Computer Business Review

The widespread success of offshoring business process operations has encouraged a growing number of organizations to offshore their high-end knowledge work as well. The underlying expectation for offshoring these processes is that it will result in additional cost savings, improved operational efficiencies and access to talented labor in low-wage offshore countries like India.

The first wave of business process outsourcing (BPO in India began in the late ’90s with simple back office services such as transcribing medical records, answering phone calls and data entry. Later, during the second wave of BPO services in 2002 to 2003, outsourcing firms graduated to more complex transactions such as problem solving and decision-making tasks, which included insurance claims processing and contact center customer service. Finally, in 2006 to 2007, the $7.2 billion BPO sector in India began providing knowledge-intensive business process outsourcing services which has since become the third wave of BPO services.

Knowledge intensive business processes require significant domain expertise. Examples include developing structured products for investment banks, patent valuation, legal and engineering analytics, and supply chain and financial analytics. Perhaps the major distinguishing feature of the third wave compared to the others is the fact that companies are now recruiting experts with professional degrees and up to 15 years of experience. As such, they are able to bill at higher rates and increase revenue.

Evolving outsourcing strategies are leading businesses towards offshoring high-end processes to low-wage destinations, a trend referred to as knowledge process outsourcing, or KPO. From a supplier perspective, Indian BPOs are moving towards offering KPO as they face declining profit margins from more basic business processes such as data entry, medical transcription and outbound calls, in addition to facing high agent attrition. Currently, India is in the midst of a major cultural shift in which workers are beginning to disregard a career in BPO as a viable long term option.

In comparison to BPO, KPO delivers higher value to organizations that offshore their domain based processes, thereby enhancing BPO’s traditional cost-quality paradigm. The central theme of KPO is to create value for the client by providing business expertise rather than process expertise. Thus, KPO entails the shift from simple execution of ‘standardized processes’ to processes that demand advanced analytical and technical skills as well as decisive judgment. The key sectors within the KPO industry, for example, include data search, integration and management services, financial and insurance research, supply chain management, biotech and pharmaceutical research and computer-aided simulation and engineering design.

While growth in BPO was driven by labor arbitrage and leveraging the IT skill sets of engineers and developers, KPO is likely to be driven by factors like breadth and depth of coverage, domain expertise, location advantage, sales and marketing capabilities.

Large IT service companies such as IBM, Wipro and Tata Consultancy Services (TCS) are also looking to enter the KPO space by shifting from traditional IT services to higher level engineering product design. These big players are keen to acquire smaller niche vendors within different vertical spaces to provide their customers with a broad spectrum of BPO, KPO and IT services. In the last few years, the BPO industry has witnessed some consolidation as larger companies look to acquire smaller niche players to gain the scale (volume) and sector specialization which is necessary to maintain margins in a highly competitive environment. The purchase of Indian firm Daksh by IBM in April 2004 is just one example of a major player looking to acquire contact center expertise through an offshore acquisition. Datamonitor expects a similar round of consolidation in the Indian KPO industry in the near future, as presently there are a large number of startup organizations catering to a niche audience. One such example is the acquisition of KPO player Marketics by WNS (one of the biggest BPO firms in India) to enhance their knowledge services business.

According to NASSCOM estimates, the KPO market is expected to grow from $1.2 billion in 2003 to $14-16 billion by 2010, and India is expected to account for 65-70% of this market. Some of the large players in the Indian market include third party vendors like Evalueserve, Genpact, WNS Global Services, Firstsource, McKinsey & Co, Accenture and Pangea3. Other countries such as China, Russia, Poland, the Philippines and Hungary are also looking to take advantage of KPO opportunities and will introduce new services in this market.

Against this backdrop and given the massive potential in the market, the KPO industry in India will witness an increase in the number of KPO players. Some firms will grow KPO services organically while it is expected the larger IT and BPO players will embark on an aggressive acquisition strategy to buy smaller niche players.

As BPO firms redirect their services portfolio toward higher value and higher margin business, more services that fall under the KPO classification will be offered. Services such as legal and business analytics, equity research, clinical trials analysis, drug discovery, pharmaceutical research, and supply chain analytics will emerge as core KPO offerings. This list is not definitive, however: over time, the overall breadth and depth of services in KPO will continue to expand.

Saurabh Virmani

 

Don’t just blame odd hours for BPO attrition

10 Jun, 2008, 1407 hrs IST, Jayashree Bhosale, ET Bureau

PUNE: Anand (name changed) is a Senior Executive in a big BPO company. After going through a stressful life, now in a rocky third marriage, he finally decided to seek help. “There was an overlap between my personal and professional life. I had challenges in my personal life regarding relationships outside my marriage. I faced problems at the workplace too.

Today’s capitalist culture tries to push people beyond a point,” said Anand. Anand is just one example of the booming outsourcing industry which has been facing the challenge of a high attrition rate which is close to 60%. Studies have attributed this to factors like a stressful job environment in the BPO industry, including odd working hours. However, a study conducted at a BPO by psycho-therapist Dimple Shah, who heads Revival Life, revealed that a majority of the problems of these employees are not work-related . They are more related to personal life and family.

“Work-related stress in BPOs is hugely hyped. The measures that the companies take to reduce stress are also hyped. Measures like out-ofcountry vacations, good canteens, etc do not go to the root of the problem, which originates from their personal lives and requires counselling, either individually or in a group,” she said.

The Revival Life study covered the period from December 2006 to June 2007, covering nearly 100 people at one Mumbai BPO. Ms Shah said the stress levels at this BPO were low since they did not handle inbound calls. “We found that 50% employees were normal , 40% had anxiety, 27% had depression and only 10 % had stress. The proportion of those suffering simultaneously from all, that is stress, anxiety and depression was 20 %,” Ms Shah remarked , adding, “These 20% people need therapeutic solutions, which takes a longer time.”

With the high attrition rates, the human resource (HR) department is busy fire fighting, occupied in recruitment and training, with not much time to spare for counselling activity. “The HR department tends to use motivational and communication programmes for solving employees problems of the employees. However, such measures are useful for only about 20% of the workforce. The real solution lies somewhere else,” said Ms Shah.

 

‘BPO space has huge scope, needs new biz paradigm’

Tuesday, 10 June , 2008 | Business Line | Sify.com

Bangalore: ‘BPO’ may be a good catch phrase, but the industry is past the era of mere offshoring; today it is all about globalisation of services and achieving domain expertise and efficiency, said Pramod Bhasin, Vice-Chairman, Nasscom (National Association of Software and Services Companies), and President and Chief Executive Officer, Genpact.

“The term ‘BPO’ has outlived its use. It doesn’t represent the full depth and capacity of the industry and the types of services it offers. Today, it is important to build full scale services and an ecosystem around processes. The industry requires a combination of technology and process expertise. India one day will be known for delivering process and re-engineering expertise. There are unprecedented growth opportunities in this,” said Bhasin, at the two-day Nasscom BPO Strategy Summit held in the city on Monday.

Revenue watch

The Indian IT-BPO revenue is set to grow by 33 per cent in the fiscal year 2008. Exports are expected to cross $40 billion, while the domestic market will clock over $23 billion.

The BPO industry alone is estimated to touch $12.5 billion in 2008 and has the potential to grow five-fold by 2012. The industry today employs two million people directly and indirect job creation is seven-eight million. But shortage of adequate employable manpower is still a cause for concern. “We need about 200,000 more employable graduates in the industry. We also need to fight attrition,” cautioned Bhasin.

All this can be done only if the country “puts its act together in education reforms and infrastructure initiatives,” urged Bhasin. A private-public partnership is required to achieve this, he added.

In his address, Ganesh Natarajan, Chairman, Nasscom, and Deputy Chairman and Chief Executive Officer, Zensar Technologies, listed out the BPO industry agenda on hand. The industry must look at harnessing opportunities in rural India, encourage reverse migration and adopt green IT practices, nurture creativity and provide opportunities for women to take up leadership roles.

Jainder Singh, Secretary, Department of Information Technology, Ministry of Communications and Information Technology, stressed the need to create investment regions and the importance of moving up the value chain to stay globally competitive.

Operation locations

At a press meet in the sidelines of the summit, Som Mittal, President, Nasscom, said the industry body has, in a study conducted along with AT Kearney, identified 50 potential locations in the country that are attractive centres for BPO operations.

Apart from the seven main centres of Bangalore, Chennai, Hyderabad, Pune, Mumbai, Kolkata and NCR, the study has identified 43 more centres with varying degrees of attractiveness and advantages. They include Ahmedabad, Bhubaneshwar, Chandigarh (Challengers); Aurangabad, Bhopal, Goa (Followers); and Allahabad, Dehradun and Patna (Aspirants).

Nasscom is in the process of talking to State Governments and other parties concerned to develop these regions as BPO centres of excellence, said Mittal.

It is also looking at international partners for the adoption of Green IT.