BPO focus areas for Pakistan IT Industry

Kubair A Shirazee, Ikonami’s CEO outlines the areas where Pakistani BPO sector will need to focus in order to become a force to reckon with Business Process Outsourcing (BPO), a growing industry, is winning more advocates. Specialist outsourcing companies achieve greater process efficiency for their clients by optimizing and rationalizing existing business processes.

Neither BPO, nor the Pakistani service sectors exposure to it is new. Local service providers have been operating BPO services, at some level, since the 1980s. What we are experiencing is the industry maturing to a point that it can begin to successfully bid and win overseas contracts.

Much of the industry still offers basic BPO services. To develop and build on exports, such players are finding that they operate within a crowded global BPO market, against more established players with access to larger labour pools. To compete effectively for larger contracts in a global marketplace, the industry must gain specialised expertise and the government must develop the right environment.

The potential of global BPO services is huge; IDC Corp predicts the global BPO market will cross US 641billion dollars by 2009. As markets become ever complex and interconnected, demand for greater specialised outsourcing will only increase.

Expertise and experience will be the determining factors of those who succeed in this global BPO marketplace. The future of the Pakistani BPO sector is bright, but it needs government support in the areas of political stability, Intellectual Property Rights (IPR), data security, legal and regulatory environments in discussions with industry.

Until the industry and the government work towards addressing these issues in tandem, the industry will struggle to attract significant high value BPO contracts.

For example, the North American and European markets, representing the bulk of global BPO contracts, have legislation managing cross-border information movements. Only those countries adhering to specified legal and regulatory standards for handling sensitive data can expect to win large contracts. As such, significant volumes of BPO work will not come to Pakistan unless legislation is implemented and a regulatory framework developed to enforce it.

Adhering to recognized standards would open the door for Pakistan to join a distinguished group of countries. This would, in turn, allow Pakistani companies to qualify for bidding for significant BPO contracts, distinguishing them from run-of-the-mill players and other offshore locations.

Source: Dawn


India outsourcing industry chief faces criminal prosecution

Nasscom, which just wrapped up an annual conference that drew thousands of people worldwide to Mumbai, has been hit with a nasty blow. Its president faces prosecution for allegedly failing to ensure the safety of a Hewlett-Packard nighttime call-center employee prior to her murder.

Som Mittal, president of Nasscom (an organization representing India's IT services industry), was managing director at HP's GlobalSoft unit when a female employee was raped and murdered by a taxi driver en route from her nighttime shift in Bangalore in 2005. Some of India's call center employees work night shifts to service U.S. customers during the day.

The Indian state of Kamataka is prosecuting Mittal under a law governing employee safety.The Supreme Court rejected his challenge of the charge in a ruling made earlier. If convicted, Mittal faces a token fine of about $25 and a criminal record, Reuter’s reports. The government is trying to send a message, particularly since another female citizen working at a nighttime call-center job in Pune was raped and murdered by her driver last year.

This case provides further proof that the practice of employing Indians in nighttime jobs to serve U.S. customers is a faulty and decaying business model in the broader realm of globalization. There are other signs: India's workforce increasingly rejects these jobs because they want a normal life. And when an Indian accepts a nighttime job, it's usually only until they find something better, creating turnover problems for both the services vendors and their clients. Some customers of U.S. companies, as we know, complain about language barriers and the rigidity of India-based call center reps, many of whom are required to closely follow their scripts. Business 101: Above all else, keep your customers happy.

CIOs also are finding fault with the model. Genworth Financial, for example, observed particularly high attrition rates among nighttime employees of its IT services provider, Genpact. Between 2003 and 2006, the company launched "Project Daylight," which called for transitioning the work done in India from 80% at night to 85% done in that country's daylight hours. That meant pulling some jobs back to the United States, like call center work, and developing new processes that required the easy shift from one time zone to another. In retrospect, "the night shift was designed for short term cost savings, rather than designing your company to be a truly global business," CIO Scott McKay said.

The whole model of chipping away at the operations budget by asking Indians to use fake names like John and Sue and follow customer service scripts at 3 a.m.? It's on its way out, and rightly so. It increasingly appears to be an ineffective way to save money. And, last but in no way least, let's hope that no more Indian call center employees fall victim to nighttime rapes and murders.

Source: Informationweek
 

Outsourcing market to grow at 8.1 per cent

Analyst Gartner predicts the global outsourcing market will grow at a steady pace of 8.1 per cent in 2008, and such growth will be driven by multisourcing and offshoring. Publicly reported IT outsourcing and business process outsourcing contract values decreased overall by 50 per cent last year. Gartner says more firms are using a multisourcing strategy that includes a range of smaller deals that are not reported in the press.

Such results correspond with outsourcing advisory TPI, which expects multisourcing to increase in popularity as any remaining hesitancy surrounding offshoring subsides because of an increasing requirement to source specialist workers.

Gartner also says users are moving work to lower cost, offshore locations. Despite Indian dominance, Gartner expects other countries to emerge and challenge Indian providers in 2008. Ian Marriott, research vice president at Gartner, Strong demand is putting a strain on the available Indian labour force, while staff attrition and cost increases remain high. Global companies continue to accelerate their demands for a presence in countries other than India, and providers are seeking to expand their geographic footprint of delivery centres accordingly. More sophisticated buyers are seeking a multi country strategy to minimise risk and align nearshore and offshore delivery centres with their primary time zones. Although Indias offshore revenue will continue to grow, the countrys share of total offshore spending will decline slightly in 2008.

Gartner recently revealed its top 30 locations for offshore services such as Americas. Argentina, Brazil, Canada, Chile, Costa Rica, Mexico and Uruguay ,Asia Pacific. Australia, China, India, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Sri Lanka and Vietnam ,Europe, the Middle East and Africa EMEA , the Czech Republic, Hungary, Ireland, Israel, Northern Ireland, Poland, Romania, Russia, Slovakia, South Africa, Spain, Turkey and Ukraine.

There are also a collection of countries that have been been keen to join the offshoring bandwagon, Argentina, Uruguay, Philippines, Russia, Ghana, South Africa and Mauritius.

Source: Off shoring times