A PRO1ECT REPORT A Study on Impact of ITES Sectors in India for Executive MBA Submitted by Ravi Parappa Ratnakar 124211FEMBA019 In partial fulfillment of the requirement For the award of the degree Under the guidance of Mr. Kannan Sharada Vikas Trust No.450/1/14, 2 nd floor. Lakshmi complex, 10 th main 27 th cross, 4 th block, 1ayanagar, Bangalore-11 CERTIFICATE This is to certify that this project entitled A Study on Impact of ITES Sectors in India submitted by Ravi Parappa Ratnakar with roll no 124211FEMBA019 on July/2013 to the KARNATAKA STATE OPEN UNIVERSITY, in partial fulfillment of the requirements for the award of EXECUTIVE MBA, is a record of bonafied work undertaken by her/him !"T#$%&T' !(#)$%' "i*nature + "i*nature + &ame + ,a-i ,atnakar &ame + .r /annan $ate + 31 July 2013 $ate + $esi*nation + !"T#$0 1%&T,%' "i*nature + &ame + $ate + "eal of "tudy 1entre+ A Study on Impact of ITES Sectors in India CONTENT SL NO PARTICULARS PAGE NO 1. OVER VIEW OF BPO 1 2. BPO TERMINOLOGY 11 3. ORGANIZATION STRUCTURE OF BPO INDUSTRY 14 4. RATIO OF MANPOWER IN BPO INDUSTRIES 15 5. COMPETENCIES REQUIRED FOR DIFFERENT DEPARTMENT 24 6. CAREER PLANNING / GROWTH OF BPO 25 7. PERFORMANCE MANAGEMENT SYSTEM OF BPO 34 8. SUCCESSION PLANNING OF BPO INDUSTRY 46 9. REWARDS AND RECOGNITION IN BPO INDUSTRY 50 10. CHALLENGES FOR HR IN BPO INDUSTRY 64 11. CONCLUSION 74 1. OVER VIEW OF BPO The concept of outsourcin* started with ,oss 2erot when he founded %lectronic $ata "ystems in 1342 %$" would tell a prospecti-e client, 50ou are familiar with desi*nin*, manufacturin* and sellin* furniture, but we6re familiar with mana*in* information technolo*y 7e can sell you the information technolo*y you need, and you pay us monthly for the ser-ice with a minimum commitment of two to ten years 829 is the act of transferrin* some of an or*ani:ation6s repeated non;core and core business processes to an outside pro-ider to achie-e cost reductions while impro-in* ser-ice quality 8ecause the processes are repeated and a lon*;term contract is used, outsourcin* *oes far beyond the use of consultants )f done well, 829 results in increasin* shareholder -alue The main difference between 829 and more traditional )T outsourcin* is that 829 offers companies a way of achie-in* transformational outcomes much more quickly )n a typical 829 contract, a ser-ice pro-ider takes o-er a specific corporate function %ffecti-e 829 encompasses much more than just chan*in* who is responsible for performin* the process )n 829, the outside pro-ider not only takes on the responsibility to mana*e the function or business process, but also re;en*ineers the way the process has been traditionally done The ne<t *eneration of 8usiness 2rocess 9utsourcin* has emer*ed as a priority for businesses lookin* to better options in mana*in* their application portfolios The first wa-e offered low;cost, off;shore de-elopment labor, but today firms are demandin* new, less risky options for applications that are strate*ic, comple<, or mission;critical, while still takin* cost into consideration 9utsourcin* has mo-ed from a niche technolo*y mana*ement tool to a mainstream strate*ic weapon 8usiness 2rocess 9utsourcin* le-era*es process dri-en efficiencies in terms of or*ani:ational e<cellence, responsi-eness = brandin*, financial efficiency and customer relationship 829 is emer*in* as a powerful and fle<ible approach that business leaders can use to achie-e a wide ran*e of tactical and strate*ic aims The most common business process that *ets outsourced is call centers 1all centers and >elp $esks of many multi national and fortune ?00 companies are bein* outsourced to low wa*ed, %n*lish speakin* countries such as 2hilippines and )ndia 1ountries like )ndia with -ast )T human resources are also attractin* outsourcin* from @merican )T/Technolo*y companies to outsource their )T >elp $esks .any of these help desks are state of the art with latest >elp $esk software and help desk hardware with technical sa--y )T *raduates behind them answerin* your questions )t can be defined as the transfer of an or*ani:ation6s entire non;core but critical business process/function to an e<ternal -endor who uses an )T;based ser-ice deli-ery 8y doin* so, 829 helps an or*ani:ation concentrate on its core competencies, impro-e efficiency, reduce cost and impro-e shareholders6 -alue Thou*h )T outsourcin* has been happenin* for so many years, an increased momentum has been witnessed since the late 1330s due to the rise of )nternet and 1ommunication technolo*ies "e-eral *lobal *iants from -arious industries ha-e be*un to reali:e the importance of 829 and ha-e started outsourcin* their non;core business functions This has *i-en rise to many speciali:ed 829 -endors across the *lobe, with )ndia bein* a major hub owin* to its lar*e computer;literate %n*lish;speakin* population, low billin* rates, strate*ically fa-orable time :one and hi*h quality The 829 market in )ndia is e<pected to *row e<ponentially in the comin* years @lthou*h the term 5business process outsourcin*5 !829' has *ained -isibility in the )T ser-ices industry only in the past four to fi-e years, the ser-ice offerin* itself has e<isted for decades Aor e<ample, se-eral of the lar*est ser-ice pro-iders ha-e si*nificant le*acy re-enue streams that are deri-ed from medical claims processin* contracts )n many instances, these contracts include the entire back;office function The outsourcin* of payroll administration, an accepted practice for many years, is another illustration of the true a*e of the 829 market This market is now e<periencin* noticeable momentum in terms of wider user acceptance and the emer*ence of new ser-ice offerin* cate*ories, as well as a proliferation of pro-iders from which to choose "er-ice pro-iders offer 829 for literally hundreds of business processes "ome of these ser-ice offerin*s are -ery stableB some are just emer*in* and are, therefore, lar*ely untested Domestic Market Of BPO Business process outsourcing in India The business process outsourcin* industry in )ndia has *rown by leaps and bounds and as its si:e increases so does its competiti-e ad-anta*e 1ompared with 1334 when this )ndustry had started inroads into the #nited "tates with 9utbound Telemarketin* campai*ns, today the -ehicle for these calls;the internet has become cheaper and more reliable for the a-era*e )ndian business The business has boomed to the e<tent that many people are now runnin* 829Cs out of their cyber cafes and houses in &ew $elhi The sector witnessed considerable acti-ity durin* 200D;0?, includin* a rampin* up of operations by major )ndian and .&1 players and stepped up hirin* The domestic 829 market, cataly:ed by demand from the telecommunications and 8A") se*ments, matched the *rowth of 829 e<ports The market e<perienced maturity and consolidation, a result of numerous mer*ers and acquisitions takin* place within the sector There were o-er D00 companies operatin* within the )ndian 829 space, includin* capti-e units !of both .&1s and )ndian companies' and third;party ser-ices pro-iders The )ndian 829 industry remains on a *rowth path, emer*in* as one of the key in-estment markets in the country (rowth in this sector will *et a further impetus as )ndian 829 companies ha-e robust security practices and emphasis is laid in de-elopin* trust with clients on this score 7hile earlier there were -aryin* quality standards on this aspect, today there is focus on standardi:ation of security, such as data and )2 security Major BPO locations in India Cities that are leading BPO-ITeS hubs in India today: 8an*alore 1hennai >yderabad .umbai &1, !(ur*aon, &oida, Aaridabad, (reater &oida' &ew $elhi 2une These are Tier ) cities that are leadin* )T cities in )ndia 7ith risin* infrastructure costs in these cities, many 8296s are shiftin* operations to Tier )) cities like+;@hmedabad, @mritsar, 8hubaneswar, 1handi*arh, (uwahati, )ndore, Jaipur, /anpur, /ochi, /olkata, .an*alore, .ohali, .ysore, &a*pur and "rina*ar Tier )) cities offer lower business process o-erhead is compared to Tier ) cities, but may ha-e a less reliable infrastructure system which may hamper dedicated operations The (o-ernment of )ndia in partnership with pri-ate infrastructure *iants is committed to brin*in* all around de-elopment and pro-idin* robust infrastructure all o-er the nation Business Process Outsourcing (BPO) - Advantage India The abundant skilled manpower has made )ndia a tar*et destination for multinationals to back end their operations in )ndia )ndia ranks hi*h in areas such as qualifications, capabilities, quality of work, lin*uistic capabilities and work ethics, and thus is ahead of competitors such as 1hina, 2hilippines, )reland, @ustralia, 1anada etc )ndian companies ha-e unique capabilities and systems to set, measure and monitor quality tar*ets )n specific 829 cate*ories, )ndian centers ha-e achie-ed hi*her producti-ity le-els;for e<ample, the number of transactions per hour for back office processin*, than their 7estern counterparts @lso, )ndia is able to offer a 2D<E ser-ices and reduction in turnaround times by le-era*in* time :one differences )ndia6s unique *eo*raphic 2ositionin* makes this possible .any state *o-ernments in )ndia are offerin* incenti-es and infrastructure to set up )T enabled ser-ices @bout 100,000 en*ineers *raduate from )ndia e-ery year .any of these en*ineers are employed with call centers for troubleshootin* and pro-idin* technical support at salaries that are dramatically lower compared to the pay scales in the #" The a-era*e monthly salary in )ndia is FD00;E00 compared to F2,E00;2,G00 in the #" "i:e and (rowth of 829 in )ndia Year Size (US$ Bn) Growth Rate 2003 2.8 59 2004 3.9 45.3 2005 5.7 44.4 Strengths Weaknesses "olid history in software de-elopment %n*lish proficiency (o-ernment "upport 1ost ad-anta*e "tron* tertiary education 2rocess quality focus "killed workforce %<pertise in new technolo*ies %ntrepreneurship ,easonable technical inno-ations ,e-erse brain drain %<istin* lon* term relationships Opportunities 2ositionin* = 8rand mana*ement )nfrastructure 1ultural differences "ales = marketin* He-era*e e<pertise for hi*her;-alue education 8usiness process e<perience $istance from #" Aear/#ncertainty from 2akistan He*al system 2oor *lobali:ation skills Threats 1reation of *lobal brands 829 = 1all center offerin*s %<pansion of e<istin* relationships 1hinese domestic = e<port market He-era*e relationships in 7est to access @2@1/.iddle %ast markets )ndian domestic;market *rowth )nternal competition for resources 9-er;promise / #nder;deli-er ,e*ional *eopolitical uncertainty ,isin* labor costs 1ompetition from other countries "ometime blindin* nationalism (o-ernment blockin* reform/deals 1orruption/piracy/trust 2olitical = reli*ious instability ;war Global Market of BPO Global BPO Market by Industry Information Technology 43 Financial Services 17 Communication (Telecom) 16 Consumer Goods/ Services 15 Manufacturing 9 Global BPO Market by Geography United States 59 Europe 27 Asia-Pacific (incl. 1apan) 9 Rest of the World 5 Size of Global Outsourcing Market 2000 USD$ 119 Billion 2005 USD$ 234 Billion 2008 (est.) USD$ 310 Billion Call Center Employee cost USA US$ 19,000 annually Australia US$ 17,000 annually Philippines US$ 9,050 annually India US$ 7,500 annually &early E?I of #" and %uropean multinational companies now use outsourcin* or shared ser-ices to support their financial functions E2I of %uropean multinational companies ha-e outsourced financial functions o-er the past two years @dditionally, E1I of %uropean companies and EGI #" companies plan to use these ser-ices in the ne<t 12;2D months 9-erall, 23I of #" and %uropean companies e<pect to increase their use of outsourcin* of financial functions, with spendin* e<pected to be nearly 14I hi*her than current le-els &orth @merica is e<pected to represent ?E percent of the total 829 market in 2003 ; to F43 billion ; with *rowth in other re*ions e-entually outpacin* &orth @merica (artner analysts say that after se-eral years of double;di*it *rowth, delays in contract si*nin*s and lower ne*otiated rates for lar*e 829 deals ha-e led to moderate *rowth in 2002 and 2003 The 7estern %uropean 829 market is forecast to *row 103 percent in 2003, to F2E billion, accordin* to (artner )n %urope, outsourcin* of financial ser-ices processes are widely used, howe-er, other industries are *rowin* in respect for different types of 829 1ustomer interaction for demand;mana*ement 829 is pro-in* popular in the utilities and telecommunications sectors "upply;mana*ement 829 is *ainin* popularity in local *o-ernments, and enterprise ser-ices are *rowin* in telecommunications for human resources, finance and accountin* "tartin* off slowly, the @sia 2acific 829 market is e<pected to *row EG percent in 2003, to FGE billion, but it is then forecast to ha-e double;di*it *rowth durin* the ne<t few years .%T@ (roup, )nc found that nearly all @sia 2acific )T or*ani:ations will outsource at least one mission;critical technolo*y operation by 200? .c/insey6s research found that @ustralia and &ew Jealand are the most mature economies in terms of acceptance of 829 ser-ices, followed by "in*apore )n most other countries there is almost no history of outsourcin* other than product support CHINA )n the outsourcin* field, 1hina is the bi**est challen*e in the future and the lar*est threat to )ndia 7ith the lar*est population and fastest economic *rowth, 1hina has at least two stren*ths in the *lobal outsourcin* market+ manufacturin* and )T The main ad-anta*es of 1hina are as follows+ Hower .anpower costs+ The 1hinese workers cost about 1? percent less than equally qualified )ndians Japan @d-anta*e+ 1hina is likely to *row throu*h the Japanese outsourcin* route The ad-anta*es that 1hina has are Japan6s pro<imity to 1hina, similarity of the lan*ua*es )ndia currently offers almost no 829 ser-ices in Japan %<tremely low cost real estate and power+ These costs are lower than in )ndia This can be a -ery attracti-e to the #" companies, which are lookin* for cost cuttin* due to the downturn 2roacti-e (o-t+ The *o-t is -ery friendly to this sector and has taken the followin* steps 1 %n*lish teachin* and other skill sets+ 9-er F?D billion was in-ested in nine uni-ersities in 1hina to promote %n*lish lan*ua*e and other skill sets 2 )ncreasin* telecom density and 21 penetration+ 1hina scores o-er )ndia in these aspects and intends to further increase the *ap He-era*in* on the manufacturin* ima*e+ 7estern manufacturin* companies ha-e found that outsourcin* their manufacturin* function to 1hina for their companies6 *lobal operation can be profitable and also of *ood quality The main disad-anta*es of 1hina are as follows+ Hack of a *ood Kuality record in "oftware+ )ndia has a better ima*e as a quality supplier mostly due to its track record of better quality software than 1hina How %n*lish speakin* population+ This is the bi**est drawback of 1hina )t has a -ery small proportion of the population speakin* fluent %n*lish Hess mature+ The )ndian business processes are much more mature 1hina has only recently entered into 829 @s such, despite lower billin* rates, total project costs in 1hina would turn out be hi*her because of the hi*her o-erheads incurred PHILIPPINES )n the 2hilippines the manpower costs are 40 to G0 percent lower as compared to #/ and #" The a-era*e salary cost is around FE00;G00 per month in the 829 sector The country has a shorta*e of manpower mainly due to the small population as compared to )ndia The manpower base for 829 is only 300,000 ,i*ht now the country is *ettin* business from nearly E0 companies employin* more than 12,000 people with re-enues of #"F 2?0 million The main ad-anta*es of 2hilippines are as follows+ Har*e scale technical trainin* pro*ram+ The *o-t has initiated a no of policies by which the skills can be pro-ided to a lar*er population )mpro-ed telecom and office infrastructure+ 2hilippines scores o-er )ndia in this respect 3rd lar*est %n*lish;speakin* nation in the world+ This is a -ery important ad-anta*e 7ell de-eloped )T skill set+ )t is considered 2nd only to )ndia due to performance in software 1osts of technolo*y workers+ This is!which represents the bi**est recurrin* costs for, say, a 828 site' is only around 14I to 2?I in the 2hilippines to that of comparable workers from the #nited "tates Aormer @merican colony+ @s a former @merican colony, @merican culture and lan*ua*e is widely emulated here These cultural and communications skills could pro-e to be so appealin* to @merican firms that they would outwei*h sli*htly hi*her labor costs in the 2hilippines The main disad-anta*es of 2hilippines are as follows+ How *raduate turnout+ 2hilippines has a low *raduate turnout !only D00,000 per annum' This compares -ery unfa-orably with )ndia &ot ha-in* a record of hi*h quality+ )ndia has consistently deli-ered -ery hi*h quality in "oftware and has built a -ery hi*h reputation in it 2olitical instability+ The country has frequent elections which makes it difficult for companies to outsource as there is lack of uniformity of policies with chan*es in the (o-t &o disaster reco-ery facilities or multi;location facilities+ @fter the 7T1 bombin* terrorism has become a -ery important issue for the #" companies in particular and they want that the 829 pro-iders should ha-e multi location facilities which can be used in case of any terrorist attack )ssue of scalin* up+ 2hilippines face the important issues of scalin* up )ssues like scalin* up ha-e stunted the *rowth of 829 acti-ities bein* outsourced to 2hilippines The lar*est call 1entre in 2hilippines of @9H has only G00 people The si:e of the 2hilippines 829 industry is only F100 million, whereas )ndia6s 829 industry is presently at F1? billion !2001;02' IRELAND )t was one of the front runners in the 829 and started much earlier than )ndia Thus it has built *ood brand equity in #" )t has a -ery conduci-e re*ulatory framework and is known for e<cellent quality standards The country that has strate*ically pursued de-elopin* outsourcin* ser-ices market and is plannin* to in-est hea-ily in telecom infrastructure !F ? billion o-er 10 years'8ut it suffers from a -ery bi* disad-anta*e of a lack of a lar*e human resource pool )t has nearly ?00 companies employin* more than D0,000 people @lso it compares -ery poorly with )ndia and 1hina in terms of .anpower costs )reland is actually the bi**est e<porter of software ser-ices in the world today 8ut there is currently a shorta*e of pro*rammers in )reland and companies are forced to outsource work to )ndia The other countries, which ha-e a share in the 829 sector, are *i-en below These countries are not serious competitors to )ndia mostly due to the small population base AUSTRALIA )t has a mature 829 industry with D000 call centers employin* 22?,000 people with #"F ?E billion re-enue )t has the ad-anta*e of lar*e %n*lish speakin* population with a fa-orable time :one 2. BPO TERMINOLOGY Business Process Outsourcing 8usiness process outsourcin* means e<aminin* the processes that compose the business and its functional units, and then workin* with focused ser-ice pro-iders to both re; en*ineer and outsource these at the same time 829 in-ol-es the full transfer of responsibility for functions such as transaction processin*, policy ser-icin*, claims mana*ement, >,, finance, and compliance to the outsourcin* company The outsourcin* pro-ider then administers these functions on their own systems to a*reed ser-ice standards and at a *uaranteed cost "ome of the 829 contracts call for performance; based payouts, tyin* -endor payments to business performance or o-erall cost sa-in*s Business Application Outsourcing 1ompany @ !-endor' rents applications to 1ompany 8 !user' )ncreasin*ly corporations are rentin* applications like enterprise resource plannin*, customer relationship mana*ement, messa*in* and collaboration, and e;business The outsourcer pro-ides the mission;critical enterprise application hostin* and mana*ement The *oal is to relie-e the corporation from day;to;day mana*ement and lower the total cost of ownership !T19' The outsourcer hosts the software solution ensurin* a preset le-el of performance and reliability This is also termed application ser-ice pro-ider !@"2' ser-ice Business Process Off shoring 8usiness process off shorin* is the transfer of business tasks !medical transcription' or business processes !call centers' to a low;cost country like )ndia or the 2hilippines The interaction is conducted o-er telecom networks and the )nternet 9ff shorin* typically include tasks like transaction or accounts processin*, credit card processin*, call centers, translation, and transcription .ost of this work can be sent without the need for in; person interaction The off shorin* of support functions is still relati-ely new The off shorin* wa-e be*an with )T/software ser-ices in the 13G0s and accelerated in the 1330s with the 02/ hysteria 7ith the *lobal economic slowdown, off shorin* has -aulted to the forefront as an effecti-e cost;cuttin* technique that takes ad-anta*e of labor price differentials and fa-orable skill/performance ratios Business Transformation Outsourcing 8usiness transformation outsourcin* !8T9' is a natural e<tension of the more tactical 829 model and in-ol-es the transfer of responsibility for all back;office functions, as well as a comprehensi-e business chan*e mana*ement process to an e<ternal -endor The objecti-e is to ma<imi:e the lon*;term benefits of the 829 operations, resultin* in a comprehensi-e business transformation !or o-erhaul' Transformation outsourcin* is not a tactical issue but a forward;lookin* strate*ic tool for chan*e The lo*ic+ bi* *ains in performance only come about throu*h business transformation Outsourcing .ulti sourcin* is the mana*ement and distribution of different business processes amon* multiple 829 -endors Aor instance, >, processes are outsourced to one best;of;breed -endor Ho*istics are outsourced to another )T de-elopment and maintenance to another -endor ,isk miti*ation is a primary dri-er behind multi sourcin* 9ne aspect of multisourcin* is to use multiple suppliers to eliminate lock;in and achie-e so;called best; of;breed ad-anta*es This is especially true for #" and %uropean firms, which often like to spread offshore de-elopment to a -ariety of -endors and locations .ultisourcin* also co-ers the different deli-ery models These include+ 9n shorin* ; outsourcin* to another company within the #nited "tates &ear shorin* ; outsourcin* to .e<ico or 1anada 9ff shorin* ; outsourcin* to another country such as )reland or )ndia The fi*ure below captures the differences Shared Services (or in sourcing) "hared ser-ices, a form of 5internal outsourcin*,5 enables corporations to achie-e economies of scale by creatin* a separate internal entity within the company to perform specific ser-ices, such as payroll, accounts payable, tra-el and e<pense processin* @ typical shared ser-ices initiati-e takes ad-anta*e of enterprise applications and other technolo*ical de-elopments, enablin* the company to achie-e further impro-ements to quality in processes, such as finance, accountin*, procurement, )T, and human resources @t the core of shared ser-ices is the idea that new technolo*ies offer businesses the opportunity to 1' make better use of scarce skills, 2' pro-ide information and ser-ices more efficiently, and 3' reduce the cost of administration The bottom line: The modern firm sits at the centre of a network of suppliers (one are the bi* in;house departments and in their place are comple< chains of e<ternal partners that are meant to deli-er better ser-ices for less cost @ll these si*nify a *reater reliance on partners for non;core acti-ities and resources The ad-ent of the )nternet and the increasin* sophistication of enterprise applications open up new opportunities for companies to share a wider ran*e of ser-ices across a *reater number of business units, departments, or -endors 3. ORGANIZATION STRUCTURE OF BPO INDUSTRY The typical or*ani:ation structure of a 829 ser-ice pro-ider is a pyramidal one The fi*ure below depicts a simplified or*ani:ation hierarchy, the roles and responsibilities at each le-el and the competencies required at each le-el Top Management Manager Team Leader / Quality Analysts Agents 4. RATIO OF MANPOWER RATIO IN BPO SECTOR FOR EXAMPLE HCL TECHNOLOGY >1H Technolo*ies Htd e<pects the 829 and )T infrastructure mana*ement ser-ices to be the major *rowth dri-er, in line with the )T outsourcin* industry trend 829 space is still in an in-estment period )n the core product en*ineerin* area, the company e<pects buyin* interest to rebound in near future L7e ha-e stron* presence in 829 and )T infrastructure mana*ement ser-ices and lead in both the spaces, but due to the sensiti-ity of our clients we ha-e kept its successes in these areas a low;key affair,L said "hi- &adar, chairman and 1%9, >1H Technolo*ies Htd, at the conference call BPO 829 business recorded a four per cent sequential *rowth in June 2003 quarter with or*anic re-enues re*isterin* a si*nificant D4 per cent *rowth, while contribution to o-erall re-enues stands at G4 per cent .anpower in the se*ment increased by 43? to 1,D44 permanent employees on the companyCs rolls and added se-en clients durin* the June 2003 quarter Infrastructure )nfrastructure ser-ices business mana*ed by >1H 1omment has started yieldin* results from *lobal markets, re*isterin* a two per cent sequential *rowth in re-enues and contribution to o-erall re-enues stands at 3D per cent @ total of GD new employees were added durin* the June 2003 quarter, takin* total headcount to 41D >1H Technolo*y !>1H Tech' has earned a net income of F ?2 million durin* 1333; 2000 which is an increase of 134 per cent 30GE software en*ineers were added last year which meant a *rowth of ?1 per cent 1ustomer si:e increased to 243 They ha-e offices in 1? countries worldwide Their customers include &TT $ata, M$9, Toshiba and )ntelsat THE KEY OPERATING STRATEGIES OF HCL TECHNOLOGIES ARE AS FOLLOWS: Emphasis on a strong management team : 1 The creation of a *lobal ad-isory board and technolo*y ad-isory board should help in impro-in* their *eo*raphical and technolo*ical strate*yB this would help them in the acquisition of emer*in* technolo*ies 2 The or*ani:ational structure fosters an entrepreneurial spirit 3 )ndependent @udit, 1ompensation and ,elated 2arty 1ommittees ha-e been formed @udit 1ommittee, headed by ambassador, ,ichard 8urt, has formulated *uidelines for insider tradin* and best practices 1ompensation committee, headed by ,obin @brams, has appro-ed of an %mployee "tock 9ption plan to co-er 31 per cent of the employees D They ha-e a distin*uished )nternational 8oard of $irectors This international e<perience should be useful while makin* acquisitions Emphasis on front run emerging technologies : 1 The in-estment in ,esearch and de-elopment !, = $' should pro-ide accelerated *rowth 2 3 per cent of their offshore manpower is dedicated to , = $ 3 The company intends to add -alue to the customer6s business rather than just maintain systems Thus there is *reater potential for -alue based pricin* D Their technolo*y ser-ices continue to mo-e up the -alue;chain ? The company has placed an emphasis on )nternet technolo*ies de-elopment with minimum e<posure to dot coms Non-linear growth model : 1 This implies that the company seeks to push re-enue/income further than the hours put in and supplement its or*anic *rowth throu*h di-erse a-enues 2 Joint -entures and strate*ic partnerships+ The company6s partnership with 2erot "ystems !?0+?0' has been a hi*hly successful one >1H 2erot has a man power of 13E3 employees and has emer*ed as a leadin* outsourcin* and systems inte*ration company, with stren*ths in bankin*, ener*y, healthcare, insurance, manufacturin* and telecommunications >1H 2erot added F D1 million to the company6s net profit durin* K1 of A02001 The company has also completed the acquisition and inte*ration of )ntelicent )nc successfully 3 %quity in-estments for -alue acquisition+ >1H Tech is in-ol-ed in de-elopin* cuttin* ed*e technolo*ies alon* with some smaller companies, and may *o in for a -alue acquisition to enhance shareholder -alue soon D .er*ers and acquisitions+ Thou*h the company has been acti-ely e-aluatin* .=@ opportunities in the #" and %urope, yet it has not finali:ed a deal as yet They intend to acquire companies with stron* technolo*y, network ser-ices orientation and a quality client base .r "hi- &adar stated that the companies that they had tar*eted were *oin* throu*h a low phase, due to which their -aluations were not correct "o the company could not *o forward with their acquisition plans ? The company has in-ested F13 million in technolo*y funds and other related areas 4 The non;linear model can lead to better scalability throu*h the creation of 5soft cores5 such as the 8luetooth soft core, .odem software, 121 "oftware and 8luetooth "tack Emphasis on quality revenue mix through the following : 1 )ncreased contribution from hi*h -alue and hi*h mar*in ser-ices; howe-er it must be noted here that re-enue *rowth this time is lower than the last time 2 E2 per cent of the company6s re-enue6s come from technolo*y de-elopment ser-ices, software product en*ineerin* and networkin* ser-ices 3 The company has a de;risked business model D The top ?, top 10, top 1? customers contribute 23 per cent, 3? per cent and D4 per cent of re-enues respecti-ely ? The repeat business of the company from e<istin* clients is of the order of 43 per cent 4 The total client base is of the order of 2G4 as of "eptember 30, 2000 E The company6s offshore re-enues are *rowin* at a 1@(, of E1 per cent for 1333;00 Emphasis on earnings led growth : 1 The company has been focusin* on mo-in* up the -alue chain, due to which the bill rate has increased both for offshore centric !11D per cent' and onsite ser-ices !103 per cent' o-er K1 last year 2 @-era*e re-enue per employee durin* K1 2001 has also increased to ,s 32 million per annum and *ross profit per employee has also *one up to ,s 1? million 3 .ar*ins of the company ha-e also impro-ed Employee Development and Contribution : 1 >uman resources are the backbone of any information technolo*y company and the lon*;term success of >1H Tech also depends crucially on their human resources 2 Their total manpower stands at D13? !inclusi-e of D3D people taken in durin* the quarter' 3 G3I of their total manpower is established in )ndia D The company6s attrition rate is 114 per cent while the a-era*e trainin* duration per employee stood at 13 days annuali:ed for K1 2001 )T;%nabled "er-ices !)T%"' or 829 !8usiness 2rocess 9utsourcin*' as it is better known holds tremendous potential for )ndia Thou*h )T%" in )ndia has become almost synonymous with call centers in public perception, it encompasses much more The term )T%" can be defined as outsourcin* of such processes that can be enabled with information technolo*y and co-ers areas as di-erse as finance, >, !human resource', administration, healthcare, telecommunication, manufacturin* etc These ser-ices are usually deli-ered to remote areas throu*h the telecom and )nternet medium and imply transfer of ownership and mana*ement of the process from the customer to the ser-ice pro-ider The concept of )T%" started with the dri-e of the *lobal companies to become cost efficient )n an attempt to stay competiti-e, corporate restructured their business in such a way that they could concentrate on their competencies and outsource the processes that were non;core to their business )ndia with its lar*e %n*lish speakin* *raduate workforce and low wa*e le-els emer*ed as an attracti-e destination for )T%" !%<hibit )' %<hibit ) Comparison of Operating Costs US India (US $ cost per full time employee) India as of US costs 2ersonnel D232E 41E3 1DD (eneral = @dministrati-e %<pense G?E1 1000 11E Telecom 1?00 232G 1??2 2roperty ,entals 2400 GDE 324 $epreciation 3000 1?00 ?00 Total %<penses ?G?3G 11G?D 202 Every year, India produces 2.1 mn graduates and 0.3mn post-graduates (including non- engineering colleges). As these graduates do not have enough o! options availa!le, a large pool o" graduate #or$"orce !ecomes availa!le to the I%E& industry. %here is not only a!undant #or$"orce in India, they are also availa!le at very cheap rates. %he di""erence in #ages !et#een the '& or '( and India is more than )0-*0+ "or o"" shora!le processes. Even a"ter ta$ing into account the interaction cost o" 10-20+ !ecause o" locational di""erences, the customers can still have net savings o" ,0--0+ !y outsourcing to India. Impressive growth Potential %he I%E& industry, #hich contri!utes 2,+ to the total I% &o"t#are and &ervice e.ports "rom India, #itnessed a gro#th o" ,3.3+ to reach '&/ 2.3 !n in 0103. According to 2asscom, the industry is e.pected to gro# !y around ,)+ to touch '&/ 3.- !n. in the current "iscal. 3oing !y the long-term proection o" 2asscom, the industry is estimated to touch a si4e o" '&/ 21- 25 !n !y 200*. %his #ould imply an estimated compound annual gro#th rate o" ,*+, ma$ing it one o" the "astest gro#ing sectors in India (E.hi!it 2). E.hi!it 2 Growth of ITES Industry US$ mn 2000 ?4? 2001 330 2002 1,D3? 2003 2,300 200D ?,200 Third-party service providers gaining prominence 9ne of the main proponents of outsourcin* is (eneral %lectric !(%', which started operations in )ndia in 133E, has the lar*est )T%" operation in )ndia with more than 12,000 employees The )T%" story started in )ndia with the capti-e centers of .&1s like (%, >"81, @merican %<press, $ell 1omputers etc settin* up base here This was followed by the emer*ence of -enture funded third;party )ndian )T%" firms in descendin* order of re-enues !based on A003 re-enues reported in accordance with #" (enerally @ccepted @ccountin* 2rinciples' which are 7ipro "pectra mind, 7&" (roup, $aksh ser-ices, %<;"er-ice and >1H Technolo*ies The industry also has the presence of *lobal 829 players like 1on-er*es, %", 1omputer "ciences 1orporation !1"1', @ccenture and %<ult )nc %stablished software ser-ices companies like )nfosys, 7ipro, 2atni, "atyam, >1H, 1o*ni:ant and "yntel ha-e also started -enturin* into the )T%" arena These companies enjoy a number of syner*ies between their )T%" operations and )T ser-ice offerin*s They are able to le-era*e their e<istin* customer relationships to *et contracts and are also in a position to tar*et a lar*er share of the customer6s wallet by cross;sellin* different ser-ices The customers also prefer -endors who can pro-ide end;to;end ser-ices .oreo-er, the cash;rich balance sheets of these companies are a bi* ad-anta*e as )T%" is a capital;intensi-e industry Customer care: Fastest growing segment 6ustomer care also $no#n as call center includes data!ase mar$eting, customer analytics, telesales7telemar$eting, in!ound call center, #e! sales and mar$eting, sales and mar$eting, sales and mar$eting administration. %he hype surrounding the industry can !e e.plained !y the "act that this segment is not only the largest revenue earner ('&/ *10 mn in 0103). 8ut is also the "astest gro#ing segment (103+ in 0103) in the industry (E.hi!it 3). It also has to its credit the status o" !eing one o" the largest employment generators. %he segment employed -,000 people in 0103 a stupendous gro#th o" 11)+ compared to the previous year. %<hibit 3 ITES: Market Segmentation Revenue (US$ mn) Employment FY03 Growth` () FY03 Growth` () 1ustomer 1are G10 102? 4?,000 114E Ainance ?10 E00 2D,000 400 >, D? ?00 2,100 D00 2ayment "er-ices 210 303 11,000 ?E1 @dministration 310 4E4 2?,000 EG4 1ontent de-elopment D4? 33 DD,000 12G 9 3ro#th over 0102 &ource: 2asscom 0inancial service is the second highest revenue earner "or the industry. %he segment includes !illing compliance, ris$ management, "inancial reporting and "inancial analysis. %his segment earned revenue o" '&/ ,10 mn in 0103 ()0+ y-o-y increase) and it employed 25000 people in 0103. &ome o" the 8;< players active in the !an$ing, "inancial services and insurance (80&I) are I6I6I <ne source, E. &ervice and =ipro &pectra mind. 6ontent development, #hich includes areas li$e engineering, design animation, net#or$ consultancy and management, !iotech research, is another high revenue earner in the I%E& industry. %he revenue o" this segment in 0103 #as '&/ 5-, mn. >o#ever,#ith 55,000 employees, this segment is the second largest employment generator in the industry. &ome o" the other emerging segments in the I%E& industry are >?, payment services, administration, healthcare, retail, telecom and hospitality. Challenges facing the industry Mushrooming of small players @ttracti-e *rowth rate of the 829 industry has resulted in many reckless start;ups "e-eral companies from unrelated sectors without the required e<pertise entered the industry lured by the healthy potential of the industry These small companies are now findin* it difficult to sur-i-e in this capital;intensi-e industry )n a dire strait, some of the players are takin* hu*e cuts in their billin* rates, which in turn threaten to de; stabilise the entire industry by reducin* mar*ins to unsustainable le-els They also portray a ne*ati-e picture of the industry as a whole because of their inability to deli-er on time Margins under pressure 7ith increasin* competition and subsequent price dips, the mar*ins of )T%" companies ha-e come under tremendous pressure .oreo-er, most of the players in the industry are workin* in low mar*in areas .ore than 40I of the 829 business comin* to )ndia is -oice related 8arrin* transcription, -oice has the lowest mar*ins amon* 829 business 7ith the 829 business increasin*ly *ettin* commoditised, mo-in* up the -alue chain is a sensible option before the industry Mendors can mo-e up the -alue chain -ertically Aor e<ample, for a credit card customer, the low end processes would include ser-ices such as data entry and processin* of applications, but the hi*her -alue jobs would include processes such as credit e-aluation and fraud detection Mendors can also mo-e hori:ontally, that is e<pand ser-ices portfolio by mo-in* into sophisticated areas such as #" (@@2 accountin*, certain en*ineerin* ser-ices, consultin* etc HR Issues The )T%" industry currently employs more than 1E1,000 professionals compared to a 2?,000 in 1333 >owe-er, )ndia is runnin* out of the supply of *ood quality mana*erial talent There ha-e been recent cases of mid;si:ed companies losin* 829 orders for not bein* able to demonstrate a competent team that can mana*e a lar*e workforce >i*h le-el of attrition further complicates the problem @t least 40,000 of the 1E1,000 workforce chan*e jobs e-ery year The supply of skilled manpower to the industry needs to e<pand at a fast rate to keep pace with the rapid *rowth of the industry )n order to create a bi* pool of qualified personnel, there is a need to encoura*e pri-ate institutions to pro-ide trainin* to people interested in joinin* this industry Infrastructure Bottleneck %he state o" India@s In"rastructure is also a cause o" concern "or the I%E& Industry. %he industry is su""ering "rom long lead-time in commissioning o" telecom services and po#er supply pro!lems. %he country also needs to improve its roads and airports to "acilitate mar$eting o" India as an I%E& destination. In the last couple o" years, the In"rastructure condition in the country has sho#n improvement. Aeregulation o" the telecom sector has resulted in the addition o" signi"icant !and#idth as #ell as a decline in telecom costs. &everal high-Buality technology par$s such as >itec city, >ydera!ad %ata-&ingapore 6onsortium, 8angalore and %idel ;ar$. 6hennai have also !een esta!lished in the Industry. Apart "rom the challenges discussed a!ove, i" the unemployment rate in the '&7 other customer countries soars "urther, it could lead to increased opposition to outsourcing. %his could !ecome a threat "or the Indian 8;< Industry. 5. COMPETENCIES REQUIRED FOR DIFFERENT DEPARTMENT
"trate*ic 2lannin* >, mana*ement /ey @ccount .ana*ement Ainancial .ana*ement 8usiness $e-elopment @ccount >andlin* 2rocess .i*ration Team mana*ement .entorin* and coachin* 2rocess )mpro-ement Kuality @ssurance ,eportin* ,osterin* and schedulin* "upportin* a*ents as the ".% 2rocessin* Transactions %nd 1ustomer )nteraction 8usiness strate*y >, 2lannin* Ainancial .ana*ement skills Headership and .oti-ation 2roject .ana*ement .etrics and Kuality mana*ement 2rocess impro-ement tools Technolo*y .ana*ement 9perations .ana*ement Aorecastin*, "taffin* and "chedulin* .entorin* and 1oachin* skills 2eople .ana*ement skills .)" and reportin* tools )ndustry knowled*e 2roduct /nowled*e 2rocess /nowled*e Competencies Responsibilities 6. CAREER PLANNING / GROWTH OF BPO 829 is becomin* part of the new model for mana*in* international *rowth The benefits of this model are clear+ .ana*ement can focus more time and attention on buildin* core business, without the distraction of back;office operations and administrati-e issues @lso, mana*ement can a-oid ha-in* to in-est in office facilities and computer systems, thereby freein* up in-estment capital that can be used to better ad-anta*e elsewhere @nother benefit is that local outsourcin* firms can pro-ide -aluable in;country e<perience and really help new entrants *et thin*s done more efficiently 8usiness process outsourcin* !829' is a broad term referrin* to outsourcin* in all fields @ 829 differentiates itself by either puttin* in new technolo*y or applyin* e<istin* technolo*y in a new way to impro-e a process 8usiness 2rocess 9utsourcin* !829' is the dele*ation of one or more )T;intensi-e business processes to an e<ternal pro-ider that in turn owns administers and mana*es the selected process based on defined and measurable performance criteria 8usiness 2rocess 9utsourcin* !829' is one of the fastest *rowin* se*ments of the )nformation Technolo*y %nabled "er-ices !)T%"' industry Few of the motivation factors as to why BPO is gaining ground are: ; Aactor 1ost @d-anta*e ; %conomy of "cale ; 8usiness ,isk .iti*ation ; "uperior 1ompetency ; #tili:ation )mpro-ement (enerally outsourcin* can be defined as ; @n or*ani:ation enterin* into a contract with another or*ani:ation to operate and mana*e one or more of its business processes Different Types of Services Being Offered By BPO's Customer Support Services 1ustomer ser-ice offerin*s create a -irtual customer ser-ice center to mana*e customer concerns and queries throu*h multiple channels includin* -oice, e;mail and chat on a 2D/E and 34? days basis "er-ice %<ample+ 1ustomers callin* to check on their order status, customers callin* to check for information on products and ser-ices, customers callin* to -erify their account status, customers callin* to check their reser-ation status etc Technical Support Services Technical support offerin*s include round;the;clock technical support and problem resolution for 9%. customers and computer hardware, software, peripherals and )nternet infrastructure manufacturin* companies These include installation and product support, up = runnin* support, troubleshootin* and #sa*e support "er-ice %<ample+ 1ustomers callin* to resol-e a problem with their home 21, customers callin* to understand how to dial up to their )"2, customers callin* with a problem with their software or hardware Telemarketing Services Telesales and telemarketin* outsourcin* ser-ices tar*et interaction with potential customers for 6prospectin*6 like either for *eneratin* interest in products and ser-ices, or to up;sell / promote and cross sell to an e<istin* customer base or to complete the sales process online "er-ice %<ample+ 9utbound callin* to sell wireless ser-ices for a telecom pro-ider, outbound callin* to retail households to sell leisure holidays, outbound callin* to e<istin* customers to sell a new rate card for a mobile ser-ice pro-ider or outbound callin* to sell credit or debit cards etc Employee IT Help-desk Services %mployee )T help;desk ser-ices pro-ide technical problem resolution and support for corporate employees "er-ice %<ample+ of this ser-ice include le-el 1 and 2 multi;channel support across a wide ran*e of shrink wrapped and H98 applications, system problem resolutions related to desktop, notebooks, 9", connecti-ity etc, office producti-ity tools support includin* browsers and mail, new ser-ice requests, )T operational issues, product usa*e queries, routin* specific requests to desi*nated contacts and remote dia*nostics etc Insurance Processing )nsurance processin* ser-ices pro-ide speciali:ed solutions to the insurance sector and support critical business processes applicable to the industry ri*ht from new business acquisition to policy maintenance to claims processin* New Business / Promotion: )nbound / outbound sales, )nitial "etup, 1ase .ana*ement, #nderwritin*, ,isk assessment, 2olicy issuance etc Policy Maintenance / Management: ,ecord 1han*es like &ame, 8eneficiary, &ominee, @ddressB 1ollateral -erification, "urrender @udits @ccounts ,ecei-able, @ccountin*, 1laim 9-erpayment, 1ustomer care ser-ice -ia -oice/email etc Data Entry Services / Data Processing Services Service Example: $ata entry from 2aper/8ooks with hi*hest accuracy and fast turn around time !T@T' $ata entry from )ma*e files in any format 8usiness Transaction $ata entry like sales / purchase / payroll $ata entry of %;8ooks / %lectronic 8ooks $ata %ntry+ 0ellow 2a*es / 7hite 2a*es /eyin* $ata %ntry and compilation from 7eb site $ata 1apture / 1ollection 8usiness 1ard $ata %ntry into any Aormat $ata %ntry from hardcopy/2rinted .aterial into te<t or required format $ata %ntry into "oftware 2ro*ram and application ,eceipt and 8ill $ata %ntry 1atalo* $ata %ntry $ata %ntry for .ailin* Hist/.ailin* Habel .anu scriptin* typin* in to word Taped Transcription in to word 1opy, 2aste, %ditin*, "ortin*, )nde<in* $ata into required format etc $ata 1on-ersion "er-ices "er-ice %<ample+ 1on-ersion of data across -arious databases on different platforms $ata 1on-ersion -ia )nput / 9utput for -arious media $ata 1on-ersion for databases, word processors, spreadsheets, and many other standard and custom;made software packa*es as per requirement 1on-ersion from 2a*e maker to 2$A format 1on-ersion from .s;7ord to >T.H format 1on-ersion from Te<t to 7ord 2erfect 1on-ersion from Te<t to 7ord to >T.H and @crobat 1on-ert ,aw $ata into required ." 9ffice formats Te<t to 2$A and 2$A to 7ord / Te<t / $oc $ata 1ompilation in 2$A from "e-eral "ources %;8ook 1on-ersion etc Scanning, OCR with Editing & Indexing: >i*h speed )ma*e;"cannin* and $ata capture ser-ices >i*h speed lar*e -olume scannin* 91, $ata Arom "canned pa*e / ima*e "can = 91, paper 8ook in to 1$ @$98% 2$A 1on-ersion "er-ices 1on-ersion from paper or e;file to -arious formats Book Keeping and Accounting: (eneral Hed*er @ccounts ,ecei-ables and @ccounts 2ayable Ainancial "tatements 8ank ,econciliation @ssets / %quipment Hed*ers etc Form Processing Services: )nsurance claim form .edical Aorm / .edical billin* 9nline Aorm 2rocessin* 2ayroll 2rocessin* etc Internet / Online / Web Research )nternet "earch, 2roduct ,esearch, .arket ,esearch, "ur-ey, @nalysis 7eb and .ailin* list research etc Key To success The key to success in rampin* up talent in a 829 en-ironment is a rapid trainin* module The trainin* component has to be seen as an important sub;process, requirin* constant re;en*ineerin* 8usiness 2rocess 9utsourcin*+ The Top ,ankers 7&" has emer*ed as the top 829 in )ndia, pushin* 7ipro "pectra mind to the second position, accordin* to a sur-ey done by &@""19. The basis of rankin* is the re-enues *enerated by the 829 companies in 2003;0D, as per #" (@@2 @ list of top fifteen 829 companies in )ndia is *i-en below 7&" (roup 7ipro "pectra mind $aksh e;"er-ices 1on-er*es >1H Technolo*ies Jenta )1)1) 9ne source .phasi" %NH Tracmail (TH Htd -1ustomer >T.T 2D/E 1ustomer "utherland Technolo*ies The parameters for the survey was: %mployee "i:e !9peration le-el e<ecuti-es', 2ercenta*e of last salary hike, 1ost to company, 9-erall "atisfaction "core, 1omposite "atisfaction, 1ompany 1ulture, Job 1ontent / (rowth, Trainin*, "alary and 1ompensation, @ppraisal "ystem, 2eople, 2referred 1ompany+ !2ercenta*e of respondents of a company who named their own company as the preferred one', $ream 1ompany+ !2ercenta*e of respondents in the total sample who preferred a particular company' %mployee 8enefits 2ro-ided 8y .ajority 9f the 829 1ompanies 2ro-ident Aund+ @s per the statutory *uidelines, the employee is required to contribute a percenta*e of his basic salary and $@ to a common fund The employer for this fund contributes as well The employee can use the amount deposited in this fund for -arious personal purposes such as purchase of a new house, marria*e etc Gratuity: (ratuity is one of the retrial benefits *i-en to the employee in which the employer e-ery year contributes a particular amount The fund created can be used by the employee for the purpose of lon*;term in-estment in -arious thin*s such as a house etc Group Medical claim Insurance Scheme: This insurance scheme is to pro-ide adequate insurance co-era*e of employees for e<penses related to hospitali:ation due to illness, disease or injury or pre*nancy in case of female employees or spouse of male employees @ll employees and their dependent family members are eli*ible $ependent family members include spouse, non;earnin* parents and children abo-e three months Personal Accident Insurance Scheme+ This scheme is to pro-ide adequate insurance co-era*e for >ospitali:ation e<penses arisin* out of injuries sustained in an accident Subsidized Food and Transportation+ The or*ani:ations pro-ide transportation facility to all the employees from home till office at subsidi:ed rates The lunch pro-ided is also subsidi:ed Company Leased Accommodation: "ome of the companies pro-ides shared accommodation for all the out station employees, in fact some of the 829 companies also undertakes to pay electricity/water bills as well as the "ociety char*es for the shared accommodation The purpose is to pro-ide to the employees to lead a more comfortable work life balance Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities include pool tables, chess tables and coffee bars 1ompanies also ha-e well equipped *yms, personal trainers and showers at facilities Corporate Credit Card: The main purpose of the corporate credit card is enable the timely and efficient payment of official e<penses which the employees undertake for purposes such as tra-el related e<penses like >otel bills, @ir tickets etc Cellular Phone / Laptop: 1ellular phone and / or Haptop is pro-ided to the employees on the basis of business need The employee is responsible for the maintenance and safe*uardin* of the asset Personal Health Care (Regular medical check-ups): "ome of the 8296" pro-ides the facility for e<tensi-e health check;up Aor employees with abo-e D0 years of a*e, the medical check;up can be done once a year Loans: .any 829 companies pro-ide loan facility on three different occasions+ %mployees are pro-ided with financial assistance in case of a medical emer*ency %mployees are also pro-ided with financial assistance at the time of their weddin* @nd, The new recruits are pro-ided with interest free loans to assist them in their initial settlement at the work location Educational Benefits: .any 829 companies ha-e this policy to de-elop the personality and knowled*e le-el of their employees and hence reimburses the e<penses incurred towards tuition fees, e<amination fees, and purchase of books subject, for pursuin* .8@, and/or other mana*ement qualification at )ndia6s top most 8usiness "chools Performance based incentives: )n many 829 companies they ha-e plans for , performance based incenti-e scheme The parameters for calculation are process performance ie speed, accuracy and producti-ity of each process The 2ay for 2erformance can be as much as 22I of the salary Flexi-time: The main objecti-e of the fle<time policy is to pro-ide opportunity to employees to work with fle<ible work schedules and set out conditions for a-ailin* this pro-ision Ale<ible work schedules are initiated by employees and appro-ed by mana*ement to meet business commitments while supportin* employee personal life needs The factors on which Ale<i time is allowed to an employee include+ 1hild or 2arent care, >ealth situation, .aternity, Aormal education pro*ram Flexible Salary Benefits: )ts main objecti-e is to pro-ide fle<ibility to the employees to plan a ta<;effecti-e compensation structure by balancin* the monthly net income, yearly benefits and income ta< payable )t is applicable of all the employees of the or*ani:ation The "alary consists of 8asic, $@ and 1on-eyance @llowance The Ale<ible 8enefit 2lan consists of+ >ouse ,ent @llowance, Hea-e Tra-el @ssistance, .edical ,eimbursement, "pecial @llowance Regular Get together and other cultural programs: The companies or*ani:es cultural pro*ram as and when possible but most of the times, once in a quarter, in which all the employees are *i-en an opportunity to display their talents in dramatics, sin*in*, actin*, dancin* etc @part from that the or*ani:ations also conduct -arious sports pro*rams such as 1ricket, football, etc and re*ularly play matches with the teams of other or*ani:ations and colle*es Wedding Day Gift: %mployee is *i-en a *ift -oucher of ,s 2000/; to ,s E000/; based on their le-el in the or*ani:ation Employee Referral Scheme: )n se-eral companies employee referral scheme is implemented to encoura*e employees to refer friends and relati-es for employment in the or*ani:ation 7. PERFORMANCE MANAGEMENT SYSTEM OF BPO INTRODUCTION The history of mana*ement in )ndia can be traced to the %n*lish %ast )ndia 1ompany, !1400O1GED' chartered by Kueen %li:abeth ) for trade with @sia @fter independence in 13DE, )ndia subscribed to a model which placed a stron* emphasis on central plannin* and a bi* role for *o-ernment owned 2ublic "ector %nterprises !2"%s' who were established to control the 5commandin* hei*hts5 of the economy @fter the economic reforms of 1331 the country6s economy became much more inte*rated to the world economy, which was the effect of liberali:ation in our country and *lobali:ation worldwide The concept of human resources has under*one drastic chan*es as far as the )ndian )ndustry is concerned The a*e;old concept of >uman ,esource .ana*ement has chan*ed to >uman ,esource $e-elopment This chan*e has come as a result of the chan*e in industry from manufacturin* in the public sector to information technolo*y in the pri-ate sector PERFORMANCE MANAGEMENT IN HUMAN RESOURCES: The e-olution of the concept of performance mana*ement as a new >uman ,esource .ana*ement model reflects a chan*e of emphasis in or*ani:ations away from command;and;control toward a facilitation model of leadership This chan*e has been accompanied by reco*nition of the importance to the employee and the institution of relatin* work performance to the strate*ic or lon*;term and o-erarchin* mission of the or*ani:ation as a whole The performance mana*ement process pro-ides an opportunity for the employee and performance mana*er to discuss de-elopment *oals and jointly create a plan for achie-in* those *oals $e-elopment plans should contribute to or*ani:ational *oals and the professional *rowth of the employee 1ritical to the success of this new model, a fle<ible attitude in the face of constant chan*e is most essential Aor performance mana*ers, this chan*in* en-ironment offers many new challen*es and opportunities 2erformance mana*ers and their employees are increasin*ly bein* asked to become *eneralists who step outside of traditional narrowly;defined job descriptions in support of team objecti-es and *oals These chan*es are resultin* in the de-elopment of new approaches to human resource mana*ement BPO INDUSTRY AND PERFORANCE MANAGEMENT: The 829 industry with its major thrust on knowled*e workers offers a challen*e to the >uman ,esource mana*er The major challen*es are+ Brand equity: 2eople still consider 829 to be 5low brow5, thus makin* it difficult to attract the best talent Standard pre-job training: @*ain, due to the wide -ariety of the jobs, lack of *eneral clarity on skill sets, etc, there is no standard curriculum, which could be desi*ned and followed Benchmarks: There are hardly any benchmarks for compensation and benefits, performance or >, policies %-eryone is chartin* his or her own course Standards of performance 1ob description & essential functions Strategic plan & Annual goals Observation & Feedback Performance Appraisal Performance Development )n both the pre;job trainin* as well as in benchmarks, the role performance mana*ement plays is not too small 2erformance appraisals whether they be pre/post trainin*, offers the company a quick *lance throu*h the effecti-eness and the worthiness of a person in the or*ani:ation and also helps in effecti-e placements PERFORMANCE MANAGEMENT IN BPO INDUSTRY: 8usiness process outsourcin* !829' satisfaction le-els are on the up O but while more or*ani:ations are now confident when ne*otiatin* outsourcin* contracts .ost stru**le with on*oin* mana*ement and makin* the deal deli-er on*oin* -alue, ar*ues "imon Hindley, 2rincipal 1onsultant at 9rbys 1onsultin* 9-er the last couple of years, the outsourcin* market has turned a corner and the widespread perception of failure has been replaced by a *rowin* acceptance that 829 can really deli-er on its potential benefits O from reduced cost to supportin* business *rowth throu*h effecti-e access to key skills 9r*ani:ations now ha-e a le-el of confidence in ne*otiatin* outsourcin* contracts that is enablin* far more to achie-e strate*ic objecti-es -ia a 829 arran*ement )ndeed, in a recent independent study undertaken by 8enchmark ,esearch on behalf of 9rbys 1onsultin*, 23 percent stated the contract e<ceeded e<pectations, 41 percent belie-ed it was in line with e<pectations and only nine percent felt that it fell below e<pectations >owe-er, it is also apparent that or*ani:ations increasin*ly reco*ni:e that *ettin* to contract is just the be*innin* of a comple<, e-ol-in* relationship with the outsource ser-ice pro-ider %nsurin* the contract retains its successful perception throu*hout the business o-er the lon* term requires a proacti-e approach to mana*in* the relationship between the business and 829 ser-ice pro-ider Aor e<ample, post contract performance mana*ement should not just be about trackin* ser-ice le-el a*reement !"H@' metrics )f or*ani:ations are to ma<imi:e their relationship with a 829 ser-ice pro-ider and achie-e lon*;term strate*ic benefits O or e-en just make sure they stay on track O then other key factors need to be identified, monitored and acti-ely mana*ed a*ainst "ome will be on*oin* re*ular measuresB others should be modified o-er time to reflect chan*in* business priorities, and current business strate*y and initiati-es This wider Pbalanced scorecardC approach to performance mana*ement is not only of -alue to the business in dri-in* continuous impro-ement and business focus, it also helps the 829 ser-ice pro-ider in terms of pro-idin* *reater clarity of customer perceptions and satisfaction, and clearer specification of business priorities and how the ser-ice pro-ider can help them be deli-ered @lthou*h initially some ser-ice pro-iders may be wary of the additional effort and in-estment required, the wiser ones will reali:e the potential for pro-idin* wider ser-ice and project support %ffecti-e on*oin* mana*ement can also *reatly reduce the risk of client dissatisfaction and therefore ultimately help a-oid subsequent re;tenderin* of the contract or ser-ices bein* taken back in;house PROCESSES OF PERFORMANCE MANAGEENT IN BPO INDUSTRIES: 8usiness process outsourcin* !829' has become an essential trend in the current di*itali:ation and *lobali:ation en-ironment which influences the strate*y of enterprise *reatly )n this paper, current research and results are discussed as well as their deficiencies Then based on business process performance measurement, the total life cycle mana*ement framework of 829 is brou*ht forward to sol-e challen*es identified throu*h these deficiencies @t last business process performance and mana*ement system and rele-ant concrete methods such as business process based risk analysis, hierarchical fu::y co*niti-e map to simulate the cause;effect lo*ical relationships amon* performance indicators are presented as well to support the analysis and decision in the total life cycle mana*ement 1ompanies of today and tomorrow are confronted with intense *lobal competition, demandin* customers with rapidly chan*in* desires, shrinkin* response times and shortened product life cycle >owe-er, *lobali:ation also *i-es companies an opportunity to take a fresh look at their competiti-e strate*y and e<ploit outside resources e-en in remote re*ions Thus outsourcin* has become the most popular strate*y in business for se-eral decades @ccordin* to the definition in Q1R, outsourcin* is the operation of shiftin* a transaction pre-iously *o-erned internally to an e<ternal supplier throu*h a lon*;term contract, and in-ol-in* the transfer of staff to the -endor for the firm 9b-iously, outsourcin* implies transferrin* a si*nificant amount of mana*ement control to the supplier @lthou*h outsourcin* )T and other specific ser-ices has taken place for about ?0 years, outsourcin* entire functions which is called business process outsourcin* !829' started in the late 13G0s and early 1330s Q?R There are se-eral principal reasons for company to outsource business process The first is apparently cost sa-in* and to focus on core capabilitiesB the second is to impro-e or reen*ineer the outsourced business processB and the third is that a business requires immediate access to specialist skills )n the be*innin*, companies outsource their non; core acti-ities to countries where labor and other e<penses are low 8ut today there is more to 829 than just cuttin* down costs 829 tends to focus more on the o-erall creation of -alue such as efficiency, hi*h quality and customer satisfaction 7hat are the major challen*es of 829 confronted by ser-ice pro-ider !or called third party pro-iders' and outsourcin* company at presentS Arom the point -iew of ser-ice pro-ider, there e<ists contradiction between lar*e scale and customi:ation $ue to the comple< nature of business processes and acti-ities, ser-ice pro-iders ha-e to cater for the special requirements of a company &e-ertheless to meet the demand for fle<ible but multi;clients outsourcin* arran*ements, it is promisin* that the ad-ent of standards;based architectures, such as 7eb "er-ices which pro-ide a standardi:ed )T en-ironment will achie-e the seamless inte*ration between ser-ice pro-ider and outsourcin* company 7hile from the point -iew of outsourcin* company and combined with many failure cases, the principal challen*e and obstacle stems from loss of control on outsourced acti-ities which always leads to the hu*e risk and hi*h failure rate "o the key to success in all 829 se*ments, re*ardless of process or industry, is the ability to measure process performance before a process is outsourced and durin* the life cycle of the en*a*ement @lthou*h 829 is a *rowin* trend and has finally mo-ed from concept to reality, the e<istin* hu*e risk and lack of support approaches and technolo*ies still lead to hi*h ratio of unsuccessful cases 7ith the efforts of many researchers research work on this field is si*nificantly de-eloped but still has not fully stepped up to meet the actual requirements of potential world market Aurthermore these deficiencies in research findin*s mainly focus on mana*in* approaches, not technical support >owe-er with the rapid )T application de-elopment in 829 and dramatic impro-ement of business process mana*ement, the procurement of process data turns to easier and business process;based 829 mana*ement with technical support is *ettin* possible TOTAL LIFE CYCLE MANAGEMENT OF BPO BASED ON PROCESS PERFORMANCE ANALYSIS Throu*h the abo-e literature re-iew and to meet the challen*e abo-e mentioned, it is inno-ati-e and feasible to propose technical support to 829 *roundin* on business process analysis and put forward total life cycle mana*ement framework of 829 based on business process performance analysis Total Life Cycle Management of BPO-Framework
The total life cycle framework is proposed in attempt to shed li*ht on the relationship between 829 and business process performance the total life cycle mana*ement framework is proposed here @nd in the -iew of constructin* 829, its total life cycle is composed of se-en phases which are illustrated in Ai*1 %ach phase will be elaborated in the followin* section (1) Analyzing and planning outsourcing )t is ob-ious that 829 will brin* opportunities accompanied with risks to an outsourcin* company "o before the Tmake or buyU decision, it is -ery critical to take an all;sided analysis )n this sta*e, the analysis, which is normally based both on performance and risk factors, firstly focuses on current business process if a-ailable Thus a comparison can be made between the pre;outsourced and outsourced process (2) Selecting service providers
)n this sta*e a set of e-aluation criteria must be defined to select prospecti-e 829 ser-ice pro-ider These criteria typically include cost, quality, )T capability and financial stability @fter listin* the e-aluation criteria in a hierarchical way, decision method like @>2 or e<pert system can be adopted to e-aluate potential pro-iders Then a formal request for proposal !,A2' which take the abo-e e-aluation criteria listin* as a part initiates the process Thus the client and the prospecti-e ser-ice pro-iders enter into inter-iews, not only re*ardin* price, but also skill, culture and commitment matchin* Ainally a ser-ice pro-ider can be selected accordin* to the e-aluation criteria based on comparison, ,A2 responses and inter-iews (3) Contracting and negotiating )n this sta*e, the strate*y and major solutions of 829 are settledB problem resolution procedures are establishedB to assure continued process impro-ement incenti-es as well as punishments e-en rules for termination of contract before its le*ally specified end are defined 7hatCs more, ser-ice le-el a*reement !"H@' has been widely used as a reference for performance measurement (4) Transferring activity The details related to transferrin* business acti-ities like timetable for transfer, human resources handlin* are mostly described in the outsourcin* contracts "ince the control of business process is now reassi*ned to ser-ice pro-ider, how to properly inte*rate the outsourced processes into the outsourcin* company and define their interfaces should be paid *reat attention to (5) Managing ongoing supplier @fter the adaptation period, outsourcin* company now chan*es its role from operational mana*ement into a more strate*ic one !monitorin* the 829 acti-ities and performance' and forms a mana*ement team in char*e of coordination (enerally, because the methods used by the mana*ement team to super-ise 829 acti-ities are scheduled by the contracts !such as re*ular reports deli-ered by ser-ice pro-iders, periodical meetin*' and lack of effecti-e technical support and analysis methodolo*y, this phase is always confronted with many problems (6) Ending Contract @t the end of an outsourcin* contract the outsourcin* company has three options+ to rene*otiate the contract with the same supplier, to chan*e supplier or to in;source the acti-ity a*ain The two first options hi*hli*ht the cyclical nature of 829 while the last one corresponds to its termination (7) Constructing business process performance and management system )n the abo-e framework shown in Ai* 1, this phase locatin* in the centre is put forward to pro-ide effecti-e support for the most crucial three phases in the life cycle+ analy:in* and plannin* outsourcin*, contractin* and ne*otiatin*, mana*in* on*oin* supplier The importance of this phase is usually ne*lected or underestimated by stakeholders of outsourcin* acti-ities which may cause many serious problems durin* the e<ecution of outsourcin* contracts
To apply and support the total life cycle mana*ement framework, it is necessary to offer rele-ant approaches and methods @ccordin*ly business process performance and mana*ement system and some concrete performance measurement methods are proposed as follows )n terms of business process, as shown in Ai* 2, business process performance and mana*ement system is composed of fi-e modules;;;business process modelin*, process performance measurement system, process monitorin*, and process dia*nosis and process impro-ement Airstly after determinin* business process lo*ic and collectin* related process parameters, business process models are built by e<ploitin* suitable process modelin* methods such as )$%A3, %21 and so on 8ecause there are two kinds of hypotheses+ one is non )T;enabled business process while the other is )T;enabled, the analysis thou*hts are split in two parts The first part is to directly apply some dia*nosis and analysis methods like business process based risk analysis and find out the unreasonable structure or parameter settin* which need impro-ement The second part is based on performance measurement system which is constructed normally in a hierarchical way accordin* to 829 strate*y, stakeholdersC interests and business process objecti-es etc The measurement system based on business process is supposed to be created to determine the performance of 829 "uch a system should be desi*ned to measure how well the outsourcin* strate*y and objecti-es are bein* accomplished The system must be in place before the outsourcin* starts so that a comparison can be made Then throu*h the runnin* )T system, data related to the indicators monitored can be e<tracted to assist business process dia*nosis The monitored indicators should include measures broader than the traditional operational and financial onesB for e<ample, includin* indicators to e-aluate the beha-ior of the supplier towards the relationship and the impro-ements that the supplier brou*ht to the acti-ity .ethods such as e<tended fu::y co*niti-e map combined with process data minin* can be introduced to dia*nose the runnin* rele-ant business process @nd the followin* section is about to briefly introduce some sorts of concrete methods in business process performance and mana*ement system to support the application of total life cycle mana*ement framework of 829 Ai*ure 2+ 8usiness process performance and mana*ement system (1) Business process performance system construction 2erformance measurement of 829 is a constant challen*e @ll too often mana*ers *i-e up tryin* to create inte*rated performance measurement systems !2."' because of the difficulties in mana*in* inter;or*ani:ation transactions 8ut unless this problem is addressed it is difficult to see how 829 can be realistically de-eloped in the future @nd it is su**ested that a switch from transaction based 2." to process based 2." Q3R is more likely to achie-e a robust and focused 2." leadin* to better and more consistent customer ser-ice le-els 2rocess performance normally measured from the followin* aspects+ ser-ice cost, time, ser-ice quality, ser-ice differentiation and so on @nd from the -iew of stakeholders is also another way to construct process based 2." !2) Risk analysis--- from business process model to fault tree The risk related to a concerned process model which is associated with the cost of failure process as well as system una-ailability is an important topic in the research of business process performance The requirement to impro-e the process is also an attracti-e issue To meet these challen*es, it is necessary to e-aluate the risk of new process models "o it is -ery important that reliability analysis and risk assessment from se-eral aspects of process modelin*, such as process structure and process functions To reali:e rele-ant risk analysis and assessment, the fault tree analysis technique is presented This kind of technique was de-eloped by > @ 7atson of the 8ell Telephone Haboratories in 1341; 1342 in an air force contract and it is also effecti-e for qualitati-e and quantitati-e measurement 7ith reference to si*nificant research and results of QDR, at first, the process models are depicted by rele-ant process modelin* tools issued by our research team and then these process models will be mapped to related fault tree structures @fterwards throu*h the minimal cut and path sets of fault tree technique, a methodolo*y for identifyin* critical acti-ities in process models as well as in fault tree from reliability and structural point -iew are put forward @nd this sort of technique can also be applied in other aspects to e-aluate process models (3) Extended fuzzy cognitive maps "ince fu::y co*niti-e maps !A1.s' Q4R are a -ery intuitional and powerful tool for simulation and analysis of dynamic systems, they are introduced to model the cause; effect lo*ic relationship between process performance indicators and support reasonin* of anticipated business process performance A1.s were ori*inally de-eloped in 13G0 by /osko, and since then successfully applied to numerous domains, such as en*ineerin*, medicine, control, and political affairs A1. is a modelin* methodolo*y for comple< decision systems, which ori*inated from the combination of fu::y lo*ic and neural networks @n A1. Q2R describes the beha-ior of a system in terms of concepts and each concept represents an entity, a state, a -ariable, or a characteristic of the system The proposed mechanism utili:es the fu::y causal characteristics of A1.s as a new modelin* technique to *enerate a hierarchical network of interconnected performance indicators The wei*ht which indicates the fu::y cause;effect influences from one indicator to another comes from e<pert knowled*e or analysis results based on process data minin* @nd the proposed method aims at simulatin* the operational efficiency of comple< hierarchical process models with imprecise relationships, while quantifyin* the impact of the impro-ed process on the o-erall outsourcin* strate*y 2erformance appraisals ha-e become a tool of much importance in today6s mana*ement scenario This could be used best only with the help of objecti-e and fair >, practices The outputs of which could be used for 9r*ani:ation de-elopment rather than for mere employee efficiency impro-ement 1asual and subjecti-e appraisals will not be able to stand the test of fairness and le*ality if challen*ed Airms are thus bein* forced to emphasi:e a participati-e but joint management by objectives followed by a participati-e, joint;periodic appraisal, to brin* more clarity into the system 8ecause companies in-ol-ed in 829 are confronted with many challen*es especially like the lack of performance measurement and mana*ement throu*hout the lifecycle, this paper proposes a total life cycle mana*ement framework of 829 based on business process performance @lso concrete methods such as business process based risk analysis, hierarchical fu::y co*niti-e maps to simulate the cause;effect lo*ical relationships amon* performance indicators are presented as well to support the analysis and decision of the most important three sta*es in the 829 life cycle )t is su**ested that a careful consideration of this framework and the use of related supportin* technical methods can pro-ide insi*hts for 829 ser-ice pro-iders, outsourcin* company, )T mana*ers and academicians 8. SUCCESSION PLANNING OF BPO INDUSTRY "uccession plannin* is an essential part of corporate strate*y in most )T or*ani:ations 7hile the desi*n of the succession chart looks *ood on paper, it has often been found that the plannin* process fails to meet requirements at the time of fillin* a key position that has just been -acated )t is not an easy task dealin* with the e-er;chan*in* equations of the leadership pipeline @ccordin* to a report by #";based business research firm 1uttin* %d*e, while many companies ha-e succession plans, -ery few follow throu*h with the ri*orous implementation required )n fact, E0 percent of succession plans fail due to bad e<ecution "uccession plannin* has to ensure that the ri*ht people with the ri*ht skills are in the ri*ht place at the ri*ht time )t can be done in three ways+ role;based, indi-idual;based and team;based The first is about identifyin* key positions, the second focuses upon key people, and the last in-ol-es replacin* a section of people or resources Reviewing talent 9ne of the challen*es in all or*ani:ations is plannin* for >, needs )t is essential to adopt a disciplined approach to match >, resources with the anticipated needs of an or*ani:ation This includes ali*nin* the succession plannin* process with business strate*y TThe purpose of the talent re-iew is to fi*ure out the talent required to implement the business strate*y and constantly stren*then the talent pool The talent re-iew and plannin* process helps us identify talent for emer*in* roles in the or*ani:ation, says 8ijay "ahoo, -ice;president !talent en*a*ement and de-elopment' and head of >,, 7ipro Technolo*ies 1ommitment from the top mana*ement is another key factor for ensurin* the success of succession plannin* "ahoo re-eals that in 7ipro, the chairman !@:im 2remji' and -ice;chairman and 1%9 !Mi-ek 2aul' *i-e enormous importance and their personal time for talent re-iew and plannin*, and personally super-ise the de-elopment and implementation of the talent plan for key roles @ccordin* to "ahoo, the other essential factors are+ !a' accountability, as the succession plannin* pro*ramme requires ownership at all le-els in the or*ani:ation %ach mana*er should be responsible for assessin* and de-elopin* the talent in his or her team !b' 1onstant attention, as it can be temptin* to o-erlook the need for succession plannin* in the face of more immediate needs Planning the process The bench stren*th of current and future leaders *i-es a competiti-e ed*e to e-ery or*ani:ation @t 7ipro, the succession plannin* pro*ramme is called Talent ,e-iew and 2lannin* !T,2', and it is the most critical part of the or*ani:ations leadership buildin* and talent mana*ement process T9nce our business strate*y for the year is finali:ed, we identify the critical roles to e<ecute it 7e re-iew the talent a-ailable for those roles internally as well as e<ternally 7e plan for the succession of e<istin* critical roles, includin* that of the 1%9, and identify employees who are ready to take o-er the roles immediately and o-er the ne<t 1;2 or 2;3 years, informs "ahoo >e adds that the company does de-elopmental plannin* for each identified internal candidate in terms of job rotation, trainin*, coachin* and performance counselin* They also keep track of potential e<ternal candidates, and establish touch points for attractin* them at the appropriate time The respecti-e "8# heads and the "8# >, heads do the T,2 for the top three le-els of their business This contributes to the T,2 at the 7ipro Technolo*ies le-el, where the chairman and -ice;chairman, alon* with the >, head, *et in-ol-ed in talent plannin* for the top three le-els &e<t is the implementation of the talent strate*ies by de-elopin* and re-iewin* the action plan @t )nfinite 1omputer "olutions !)1"', which has a *lobal headcount of 1,G00, employees ha-e also taken up hi*her roles without a chan*e in desi*nation, with support from functional heads and senior mana*ement teamsS @ skill;*ap analysis is done of the candidates, and requisite trainin* pro-ided to make them able successors Clear focus )t is a known fact that while most mana*ement is interested in de-elopin* a pool of successors for key positions, they find it a difficult task to ensure the success of their efforts "uccession plannin* can *et -ery complicated 9r*ani:ations must therefore ha-e a clear focus 7ipro has quarterly talent en*a*ement and de-elopment !T%$' re-iews, and action points of each "8# and -ertical are tracked T7e also track the number of senior positions that are filled internally, which *i-es an indication of the success of the pro*ramme @t the macro le-el, the retention fi*ure also reflects the effecti-eness of the succession plannin* pro*ramme, since one of the objecti-es of the pro*ramme is to help employees reali:e their career aspirations and thus retain them in the or*ani:ation "ystematic succession plannin* does *enerate leadership talent, and an or*ani:ation can measure its effecti-eness by lookin* at the leadership talent it has created and pro-ided to the industry 7ipro is one of the top companies when it comes to creatin* top;class leaders in the )T industry T.any of our e<;employees are headin* successful )T companies,U says "ahoo with apparent pride The training difference 9r*ani:ations are less -ulnerable to leadership crises when thereCs a shadow *roup of successors who are able and a-ailable to step into their shoes Trainin* plays a key role in succession plannin* )t is imperati-e to strate*ies, desi*n and implements pro*rammes to train future leaders 7ipro has its lifecycle leadership de-elopment pro*rammes, which are synchroni:ed with the roles employees play at different sta*es of their corporate life These include the &ew Headers 2ro*ramme, 7ipro Headers 2ro*ramme, 8usiness Headers 2ro*ramme and "trate*ic Headers 2ro*ramme for different leadership positions that an employee will assume in the or*ani:ation .ost or*ani:ations do skill;*ap analysis of the selected candidates @ schedule is drawn for the prospecti-e indi-idual to acquire the knowled*e, skills and competencies within a time;frame, says "under ,ajan, *eneral mana*er, >, = administration, )1" >e adds that the trainin* could be throu*h internal pro*rammes or on;the;job !local as well as *lobal' to *ain cross;functional or cross;*eo*raphical e<posure for better maturity of the e<pertise that would enhance the confidence le-el of the person 1ust-in-time succession Then there just;in;time succession, which maps e<istin* competencies of the staff to fill an important position "uccession plannin* software uses competency analysis which lets companies understand the demand side of the equation with what their staff has to offer "uccession plannin* is not an issue of a positionB you can plan for two or three years, but by that time the to;be;successor may ha-e already left the or*ani:ationB consequently it is not rele-ant )nstead of lookin* at a job to fill, or*ani:ations should profile it in terms of competencies, *o to the data bank, and find whose competency profile matches the job, ad-ises "tephen .artin, president of )T@2 %urope The key to this is competency de-elopment across the or*ani:ationB )T@2 has done succession plannin* for many *lobal or*ani:ations throu*h competency de-elopment 7hate-er be the methodolo*y, measurin* the effecti-eness of a succession plannin* pro*ramme is critical to e-ery or*ani:ation, irrespecti-e of its si:e @fter all, it is more than just the passin* of power and responsibility it is about sur-i-al and continuity 9. REWARDS AND RECOGNITION IN BPO INDUSTRY >, professionals all o-er the world, workin* is 1all;1enter or 1ontact 1enter or 829 industries are breakin* their heads to formulate ,etention "trate*ies but nothin* is workin* in their fa-or The a-era*e attrition rate in this sector is still 3?;D0I &o perks, no rewardsVjust nothin* is workin* 8efore proceedin* further, letCs see why people are lea-in*S 7hy there is hi*h attrition rate Why people are moving? 7hen there are so many benefits associated with 829 industryV when there are so many pri-ile*es for the 829 employees than what makes them to chan*e the company/industrySS )s it only .9&%0 that matters or anythin* else as wellSS @fter takin* e<it;inter-iews and analy:in* the trend ) am able to list out followin* reasons for a 829 professional to chan*e his/her job &o *rowth opportunity/lack of promotion Aor hi*her "alary Aor >i*her education .is*uidance by the company 2olicies and procedures are not conduci-e &o personal life 2hysical strains #neasy relationship with peers or mana*ers HetCs also see as what are the -arious benefitsVthat ha-e been e<tended to people workin* in this sector Employee Benefits Provided By Majority of the BPO Companies @ part from the le*al and mandatory benefits such as pro-ident;fund and *ratuity, below is a list of other benefitsV829 professionals are entitled to the followin*+ 1 Group Medical-claim Insurance Scheme: This insurance scheme is to pro-ide adequate insurance co-era*e of employees for e<penses related to hospitali:ation due to illness, disease or injury or pre*nancy in case of female employees or spouse of male employees @ll employees and their dependent family members are eli*ible $ependent family members include spouse, non;earnin* parents and children abo-e three months 2 Personal Accident Insurance Scheme: This scheme is to pro-ide adequate insurance co-era*e for >ospitali:ation e<penses arisin* out of injuries sustained in an accident This co-ers total / partial disablement / death due to accident and due to accidents 3 Subsidized Food and Transportation: The or*ani:ations pro-ide transportation facility to all the employees from home till office at subsidi:ed rates The lunch pro-ided is also subsidi:ed D Company Leased Accommodation: "ome of the companies pro-ides shared accommodation for all the out station employees, in fact some of the 829 companies also undertakes to pay electricity/water bills as well as the "ociety char*es for the shared accommodation The purpose is to pro-ide to the employees to lead a more comfortable work life balance ? Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities include pool tables, chess tables and coffee bars 1ompanies also ha-e well equipped *yms, personal trainers and showers at facilities 4 Corporate Credit Card: The main purpose of the corporate credit card is enable the timely and efficient payment of official e<penses which the employees undertake for purposes such as tra-el related e<penses like >otel bills, @ir tickets etc E Cellular Phone / Laptop: 1ellular phone and / or Haptop are pro-ided to the employees on the basis of business need The employee is responsible for the maintenance and safe*uardin* of the asset G Personal Health Care (Regular medical check-ups): "ome of the 8296" pro-ides the facility for e<tensi-e health check;up Aor employees with abo-e D0 years of a*e, the medical check;up can be done once a year 3 Loans: .any 829 companies pro-ide loan facility on three different occasions+ %mployees are pro-ided with financial assistance in case of a medical emer*ency %mployees are also pro-ided with financial assistance at the time of their weddin* @nd, The new recruits are pro-ided with interest free loans to assist them in their initial settlement at the work location 10 Educational Benefits: .any 829 companies ha-e this policy to de-elop the personality and knowled*e le-el of their employees and hence reimburse the e<penses incurred towards tuition fees, e<amination fees, and purchase of books subject, for pursuin* .8@, and/or other mana*ement qualification at )ndia6s top most 8usiness "chools 11 Performance based incentives: )n many 829 companies they ha-e plans for, performance based incenti-e scheme The parameters for calculation are process performance ie speed, accuracy and producti-ity of each process The 2ay for 2erformance can be as much as 22I of the salary 12 Flexi-time: The main objecti-e of the fle<time policy is to pro-ide opportunity to employees to work with fle<ible work schedules and set out conditions for a-ailin* this pro-ision Ale<ible work schedules are initiated by employees and appro-ed by mana*ement to meet business commitments while supportin* employee personal life needs The factors on which Ale<i time is allowed to an employee include+ 1hild or 2arent care, >ealth situation, .aternity, Aormal education pro*ram 13 Flexible Salary Benefits: )ts main objecti-e is to pro-ide fle<ibility to the employees to plan a ta<;effecti-e compensation structure by balancin* the monthly net income, yearly benefits and income ta< payable )t is applicable of all the employees of the or*ani:ation The "alary consists of 8asic, $@ and 1on-eyance @llowance The Ale<ible 8enefit 2lan consists of+ >ouse ,ent @llowance, Hea-e Tra-el @ssistance, .edical ,eimbursement, "pecial @llowance 1D Regular Get together and other cultural programs: The companies or*ani:es cultural pro*ram as and when possible but most of the times, once in a quarter, in which all the employees are *i-en an opportunity to display their talents in dramatics, sin*in*, actin*, dancin* etc @part from that the or*ani:ations also conduct -arious sports pro*rams such as 1ricket, football, etc and re*ularly play matches with the teams of other or*ani:ations and colle*es 1? Wedding Day Gift: %mployee is *i-en a *ift -oucher of ,s 2000/; to ,s E000/; based on their le-el in the or*ani:ation 14 Employee Referral Scheme: )n se-eral companies employee referral scheme is implemented to encoura*e employees to refer friends and relati-es for employment in the or*ani:ation 1E Employee Stock Option Plan: &ow, the actual question, why people are lea-in*S 7hat types of retention strate*ies are requiredS 7hat is e<pected from >, 2rofessional and how they can address this issueS Retention - A Big Challenge Aundamental chan*es are takin* place in the work force and the workplace that promise to radically alter the way companies relate to their employees >irin* and retainin* *ood employees ha-e become the chief concerns of nearly e-ery company in e-ery industry 1ompanies that understand what their employees want and need in the workplace and make a strate*ic decision to proacti-ely fulfill those needs will become the dominant players in their respecti-e markets The fierce competition for qualified workers results from a number of workplace trends, includin*+ @ robust economy "hift in how people -iew their careers 1han*es in the unspoken 5contract5 between employer and employee 1orporate cocoonin* @ new *eneration of workers 1han*es in social mores Hife balance 1oncurrent with these trends, the emer*in* work force is de-elopin* -ery different attitudes about their role the workplace Today6s employees place a hi*h priority on the followin*+ Aamily orientation Kuality of life issues @utonomy To hold onto your people, you ha-e to work counter to pre-ailin* trends causin* the job churnin* "mart employers make it a strate*ic initiati-e to understand what their people want and need ;; then *i-e it to them Retention Strategies This is not an e<hausti-e list, one can add or delete any of the below mentioned strate*ies "econdly, the need of the hour is to ha-e 5ri*ht basics5 %-ery indi-idual is different, his needs are different, and his emotions, his problems are different "o, dear >,;2rofessionalsVsit down and concentrate on your basics ) ha-e classified retention strate*ies into two parts+ .ain and @ncillary Main retention strategies This is not an e<hausti-e list, one can add or delete any of the below mentioned strate*ies "econdly, the need of the hour is to ha-e 5ri*ht basics5 %-ery indi-idual is different, his needs are different, and his emotions, his problems are different "o, dear >,;2rofessionalsVsit down and concentrate on your basics 1 Communications - Getting Your People to Care 1ommunication is the first step toward creatin* the kind of en-ironment that people care about, and if they care, they just may stay )6m not talkin* about a lot of &ew @*e strokin* desi*ned to brin* out the inner person or false praise that creates a misplaced sense of security )nstead, keep your people in the loop about what6s happenin* with the company @t any time, all of your employees should ha-e a pretty *ood idea of how business has been, and they should be aware of what issues the company is attemptin* to address That means that you re*ularly keep your people up to date with important e-ents affectin* the company )f &o-ember was *ood, let them know, and while you6re at it, tell them what you e<pect to happen in $ecember "hare *ood news, as well as points of concern )f you6-e *ot 5issues,5 talk about them before they start makin* you cra:y @nd if they don6t *et resol-ed, fi*ure out whether the problem stems from a couple of indi-iduals or from your system The point here is that you want to treat these people as your partners, which they are They may not ha-e to worry about co-erin* the payroll this week, but they do ha-e worries of their own Treat them with at least as much respect as they *i-e you @s the store6s owner or mana*er, you set the tone for the entire or*ani:ation )f your salespeople, for instance, enjoy their encounters with you, they are much more likely to *reet customers with a positi-e attitude They are also much more likely to enjoy their work when they don6t ha-e a fire;breathin* dra*on lookin* to sin*e their butts Histen to your employees when they ha-e ideas for impro-ement @*ain, the benefits e<tend beyond just makin* people feel appreciated for their contributions These are, after all, the people who do the work e-ery day They may ha-e some ideas to impro-e producti-ity, and when they do come up with one, let e-erybody know where it came from 2ost a 5bra* board5 in your break room, or circulate an internal newsletter that touts these contributions The pay;off is a conta*ious feelin* of pride and, perhaps, some new efficiency that sa-es the company money 2 Set Clear Expectations o >ow often do you appraise your employees/team;membersS o 7hat are your e<pectations from your employees/team;membersS 7hat are the parameters to measure their performanceS >a-e you communicated to themS o 7hat will be the consequences, if they failS o 7hat will be the rewards, if they e<ceed the e<pected le-elS )f you are not ha-in* any e<pectations, how you are *oin* to appraise, your employeesS 0es, you are *oin* to be biased, because you don6t ha-e set standards The role of a 1%9, >, .ana*er is like a director of a mo-ieB choreo*rapher of a sta*e show, where there is a defined role for each character, each participant "ettin* e<pectations initiates the process .ana*ers need to sit down with each employee and clearly define what6s e<pected of them .ana*ement consultant, /enneth 2hilips, states that when e<pectations are not clear, employees may not be in sync with their job6s current demands and priorities "ettin* e<pectations is not a once and done acti-ity Jobs chan*e 2riorities chan*e ,esources chan*e .ana*ers need to re-ise and set new e<pectations throu*hout the year "ettin* e<pectations re-ol-es around the followin* three areas+ o /ey job responsibilities o 2erformance factors and standards o (oals 7hy is a settin* e<pectation importantS Kuite simply, this process can be the cornerstone of impro-in* the moti-ational climate within your sphere of responsibility )f your employees know what is e<pected of them, it allows them to focus on results and to monitor themsel-es a*ainst the set standards %n-ironments in which e<pectations are not clear, or chan*e from week to week, seldom create hi*h;performin* work *roups The three principles that should dri-e e<pectations are clarity, rele-ance, and simplicity Clarity. %<pectations should focus on outcomes, not acti-ities )n other words, you achie-e clarity when you identify the e<pected results rather than the method for achie-in* them .ana*ers often make the mistake of attemptin* to direct the process that an employee will use rather than bein* clear about results The ad-anta*e of identifyin* the outcome is that you, the mana*er, focus only on the *oalB after all, the employee will de-elop the method for achie-in* the desired results $efinin* the objecti-e often requires some thou*ht on the part of the mana*er because it is easy to fall into the 5acti-ities trap5 7hile de-elopin* a strate*ic plan for a department or di-ision is a worthy acti-ity, it does not represent an outcome )n the acti-ities trap, de-elopin* a plan is the *oal, rather than increasin* your market share ,ele-ance The principle of rele-ance helps define the 5why5 of the assi*nment )f your employees ha-e a full understandin* of the project6s importance, they can make adjustments as unanticipated factors crop up within the process They probably also will be more committed to the result because they can see more easily how it fits into the bi* picture and how their efforts impact the company This understandin* typically is accomplished throu*h dialo*ue between the mana*er and subordinate, which allows for a more thorou*h re-iew of the situation and for feedback and discussion This process builds *ood will with the employee and sets the sta*e for additional responsibilities "implicity creates a sense of *roundin* for employees as they endea-or to carry out assi*nments )f mana*ers identify the work in simple, strai*htforward terms, employees will find it much easier to follow throu*h on mana*ers6 wishes To accomplish this, a mana*er must identify the key messa*e in a fashion that the employee can embrace 3. Proper Rewarding @ research reports says that in today6s scenario, o E0I of your employees are less moti-ated today than they used to be o G0I of your employees could perform si*nificantly better if they wanted to o ?0I of your employees only put enou*h effort into their work to keep their job @s you mi*ht be aware of %mployee ,eward co-ers how people are rewarded in accordance with their -alue to an or*ani:ation )t is about both financial and non; financial rewards and embraces the strate*ies, policies, structures and processes used to de-elop and maintain reward systems The ways in which people are -alued can make a considerable impact on the effecti-eness of the or*ani:ation, and is at the heart of the employment relationship The aim of employee reward policies and practices, if any in your or*ani:ation is to help attract, retain and moti-ate hi*h;quality people (ettin* it wron* can ha-e a si*nificant ne*ati-e effect on the moti-ation, commitment and morale of employees 2ersonnel and de-elopment professionals will be in-ol-ed frequently in reward issues, whether they are *eneralists or speciali:e in people resourcin*, learnin* and de-elopment or employee relations /eep followin* parameters in mind, while desi*nin* a reward policy+ 4. Build a high degree of recognition value into every reward you offer. ,eco*nition is the most cost;effecti-e moti-ator there is 7hile the hi*h cost of other rewards forces us to *i-e them sparin*ly, reco*nition can be *i-en any time, at -ery little cost "ome -ery ordinary items and e-ents can be imbued with e<traordinary moti-ational si*nificance, far in e<cess of their monetary -alue ) am constantly ama:ed at how moti-atin* a pi::a or mo-ie tickets can be if is *i-en with sufficient appreciation @ sincere thank you can be deli-ered at any place and at any time, costs absolutely nothin* and can be more moti-ationally powerful than a substantial monetary bonus 9r*ani:ations can pro-ide inno-ati-e reco*nition in an infinite number of ways Aor e<ample, !@ >ypothetical )ncident' a small manufacturin* company made its employees feel like heroes when they attained a major safety milestone ; 100 days without a sin*le accident 9n the mornin* of day 100, it was announced that a catered lunch would be ser-ed the ne<t day, if they made it to the ?+30 shift without an accident @t ?+1? anticipatin* was buildin* .ana*ers took confetti and streamers to the balcony o-erlookin* the shop floor 7hen the ?+30 whistle blew, there were con*ratulations all around, confetti flew throu*h the air and banners were unfurled )t was a *reat moment for e-eryone ; and one that was not soon for*otten The reco*nition -alue of this celebration was e<tremely hi*h, while the monetary cost was relati-ely low >i*hly moti-atin* or*ani:ations e-en celebrate small successes @ health;conscious company distributes fruit bowls to employees6 work areas when key personal milestones are attained @nother company uses a more fattenin* approach+ fresh;baked chocolate; chip cookies to say thank you 5. Reduce entitlements and link as many rewards as possible to performance. 1learly the traditional 5pay for loyalty5 systems in most or*ani:ations need to be chan*ed $on6t let attendance be your major criterion for rewards .ost employees resent those who only put in their time and yet recei-e the same reward as those who *o the e<tra mile Today6s employees ha-e hi*her e<pectations for what work can and should be, and they want to recei-e rewards that reflect their personal efforts and contributions This is why so many companies are mo-in* toward performance;based rewards, includin* performance bonuses, *ain;sharin* and non;monetary reco*nition @lthou*h not a panacea, companies are findin* that these new reward systems do allow them to *i-e substantial rewards to those who really deser-e them "mart or*ani:ations are lookin* for opportunities to reduce across;the;board entitlements, and thereby find more resources for discretionary performance;based rewards, without increasin* the total cost of rewards 6 Troubleshoot your reward system to make sure that what it is rewarding is what you really want to happen. The Haw of ,ewards ; 57hat you reward is what you *et5 ; )s e<tremely powerful &o matter what your orientation materials or job description mi*ht say, it is the rewards your or*ani:ation *i-es that communicate the real e<pectations The most important question to ask in e-aluatin* the reward system in your or*ani:ation is, do the rewards we are *i-in* elicit the performance we wantS "tart with the results you want to achie-e and then pinpoint the types of beha-iors needed to achie-e them Aor e<ample+ o )f you belie-e teamwork is *oin* to *et you the results you want, make sure you reward teamwork, and not internal competition between departments o )f you want quality, make sure that producti-ity isn6t o-er emphasi:ed @nd, o )f you want lon*;term solutions, don6t reward quick fi<es @lso, don6t confuse employees with too many rewards )t is better to focus rewards on the critical few beha-iors and results, rather than dilutin* them by rewardin* the tri-ial many E Reward promptly. ,ewards should be *i-en as soon as possible after the performance has taken place This is why the most successful *ain;sharin* pro*rams pay employees monthly, rather than quarterly or annually as in the past There is a well;accepted law of beha-ioral psycholo*y, that if you want someone to repeat a beha-ior, you should positi-ely reco*ni:e it immediately Arom this law, smart super-isors and mana*ers can learn a -ital lesson+ Hook for any employee doin* somethin* ri*ht, ri*ht now, and reco*ni:es it @ support to this, here is my fa-orite reward story+ 57hen a senior mana*er in one or*ani:ation was tryin* to fi*ure out a way to reco*ni:e an employee who had just done a *reat job, he spontaneously picked up a banana !which his wife had packed in his lunch', and handed it to the astonished employee with hearty con*ratulations &ow, one of the hi*hest honors in that company has been dubbed the 5(olden 8anana @ward55 8. Give employees a choice of rewards. ,ewards are as different as the people who recei-e them and it doesn6t make sense to *i-e rewards that recipients don6t find rewardin* Aor e<ample, some people prefer more pay, while others prefer more time off @ promotion mi*ht be more rewardin* to one person, while a job;sharin* arran*ement mi*ht be more rewardin* for another "ome people are e<cited about sports e-ents, others about mo-ies "ome employees would lo-e a dinner in a romantic restaurant, others a book by their fa-orite author Aood, fun, education, impro-ed work en-ironment, *ifts, tra-el, and family;oriented acti-ities ; the options are endless >ow do you know what will be rewardin* to employeesS @sk them "mart or*ani:ations are also lettin* employees choose their own rewards from reward menus and catalo*s 2ersonali:in* rewards shows that a company cares enou*h to disco-er what 5interests5 each employee, rather than just distributin* *eneric items )t also reduces the followin* dan*er+ )n one or*ani:ation ) was -isitin*, an employee opened a bi* drawer in his desk and disdainfully showed me all the 5worthless trinkets5 he had collected o-er the years 3 Increase the longevity of your rewards. This can be done in a number of ways+ 9ne of the keys to reward lon*e-ity is symbolism The more symbolic an item is of the accomplishment, the more likely it is to continue remindin* the employee of why it was *i-en Aor instance, a T;shirt of coffee mu* with a meanin*ful inscription will continue rewardin* those who wear it, or use it, lon* after its initial receipt There are many tokens of appreciation ) still keep on or near my desk that remind me of the joy of past accomplishments, while the monetary rewards ) ha-e recei-ed are lon* spent and lon* for*otten @nother way to increase the lon*e-ity of rewards in your or*ani:ation is by usin* some kind of point system ,ather than rewardin* each indi-idual beha-ior or accomplishment, points can be awarded, which employees can accumulate and e-entually trade for items from a reward menu or *ift catalo* This keeps the anticipation of rewards fresh for lon*er periods of time )t also addresses the need for reward indi-iduali:ation 9ne company that desi*ns moti-ational systems offers an electronic debit;card system to help lar*er clients cope with the comple<ity of distributin*, trackin* and redeemin* employees6 points %mployees can use their points to purchase -irtually anythin* they want, from sports equipment and clothin* to automobiles and o-erseas -acations They only ca-eat for such pro*rams is to make sure that the reco*nition -alue of the rewards isn6t lost because of the impersonal nature of the technolo*y 9ne company uses a *ame it 1all "afety 8in*o @ll employees recei-e a weekly bin*o card 7hen an employee is obser-ed workin* safely, a number is presented !immediate reco*nition' 7hen they *et 5bin*o5, they recei-e a safety jacket !alon* with appropriate -erbal reinforcement' The rewards escalate for subsequent wins This type of pro*ram keeps employees interested for lon* periods of time, e-en thou*h there mi*ht be weeks or months between rewards, and makes routine work more fun o-erall )nterestin*ly, when researchers ha-e in-esti*ated the moti-ational dynamics of these workplace *ames, they ha-e found that the major moti-ator is the playin*, not the pri:e 10. Be continually vigilant of demotivators that may undermine your organization's best efforts to provide power rewards, and reduce them promptly: .ost demoti-ators can be dramatically reduced by solicitin* employee in-ol-ement in identifyin* hi*hest;priority demoti-ators and by enlistin* top;mana*ement commitment to support their reduction )t is probably self;e-ident that considerable sensiti-ity is needed in the administration of any reward system 9ne demoti-ators that is probably endemic in any reward system modification !especially as an or*ani:ation mo-es from entitlements to more performance;based rewards' is a sense that somethin* is bein* taken away %mployees need to be educated about the reasons that this is bein* done, understand the ultimate benefits to them and the or*ani:ation, and should probably ha-e some input into the chan*e process To a-oid the perception of unfairness, it is important, first and foremost, that the process for allocatin* rewards is -iewed by employees as bein* impartial This requires an objecti-e measurement system that few or*ani:ations ha-e 7ithout such objecti-e measurement, any reward system is probably destined to failure 11. Ancillary Retention Strategies The quality of the super-ision an employee recei-es is critical to employee retention 2eople lea-e mana*ers and super-isors more often than they lea-e companies or jobs )t is not enou*h that the super-isor is well liked or a nice person, startin* with clear e<pectations of the employee, the super-isor has a critical role to play in retention @nythin* the super-isor does to make an employee feel un-alued will contribute to turno-er Arequent employee complaints center on these areas Hack of clarity about e<pectations, Hack of clarity about earnin* potential, Hack of feedback about performance, Aailure to hold scheduled meetin*s, and Aailure to pro-ide a framework within which the employee percei-es he can succeed 12 The ability of the employee to speak his or her mind freely within the or*ani:ation is another key factor in employee retention $oes your or*ani:ation solicit ideas and pro-ide an en-ironment in which people are comfortable pro-idin* feedbackS )f so, employees offer ideas, feel free to critici:e and commit to continuous impro-ement )f not, they bite their ton*ues or find themsel-es constantly 5in trouble5 ; until they lea-e 13 Talent and skill utili:ation is another en-ironmental factor your key employees seek in your workplace @ moti-ated employee wants to contribute to work areas outside of his specific job description >ow many people could contribute far more than they currently doS 0ou just need to know their skills, talent and e<perience, and take the time to tap into it @s an e<ample, in a small company, a mana*er pursued a new marketin* plan and lo*o with the help of e<ternal consultants @n internal sales rep, with se-en years of ad a*ency and lo*o de-elopment e<perience, repeatedly offered to help >is offer was i*nored and he cited this as one reason why he quit his job )n fact, the reco*nition that the company didn6t want to take ad-anta*e of his knowled*e and capabilities helped precipitate his job search 1D The perception of fairness and equitable treatment is important in employee retention )n one company, a new sales rep was *i-en the most potentially successful, commission;producin* accounts 1urrent staff -iewed these decisions as takin* food off their tables 0ou can bet a number of them are lookin* for their ne<t opportunity )n another instance, a staff person, just a year or two out of colle*e, was *i-en 20,000 in raises o-er a si< month time period )nformation of this type ne-er stays secret in companies so you know, beyond any shadow of a doubtB the morale of se-eral other employees will be affected Aor e<ample, you ha-e a staff person who -iews her role as important and she brin*s ten years of e<perience, an .8@ and a *reat contribution record to the table 7hen she finds she is makin* less money than this employee, she is likely to look for a new job .inimally, her morale and moti-ation will take a bi* hit $id the staff person deser-e the raisesS 0es 8ut, reco*ni:e that there will be impact on others 1? 0our best employees, those employees you want to retain, seek frequent opportunities to learn and *row in their careers, knowled*e and skill 7ithout the opportunity to try new opportunities, sit on challen*in* committees, attend seminars and read and discuss books, they feel they will sta*nate 14 A career-oriented, valued employee must experience growth opportunities within your organization. @ commonplace complaint or lament ) hear durin* an e<it inter-iew is that the employee ne-er felt senior mana*ers knew he e<isted 8y senior mana*ers ) refer to the president of a small company or a department or di-ision head in a lar*er company 1E Take time to meet with new employees to learn about their talents, abilities and skills. Meet with each employee periodically. 0ou6ll ha-e more useful information and keep your fin*ers on the pulse of your or*ani:ation )t6s a critical tool to help employees feel welcomed, acknowled*ed and loyal 1G &o matter what the circumstances are but never, never, ever threaten an employee's job or income. %-en if you know layoffs loom if you fail to meet production or sales *oals, it is a mistake to foreshadow this information with employees )t makes them ner-ousB no matter how you phrase the informationB no matter how you e<plain the information, e-en if you6re absolutely correct, your best staff members will update their resumes )6m not ad-ocatin* keepin* solid information away from peopleB howe-er, think before you say anythin* that makes people feel they need to search for another job 10. CHALLENGES FOR HR PROFFESSIONAL IN BPO INDUSTRY Business process outsourcing (BPO) is a broad term referring to outsourcing in all fields. A BPO differentiates itself by either putting in new technology or applying existing technology in a new way to improve a process. 8usiness 2rocess 9utsourcin* !829' is the dele*ation of one or more )T;intensi-e business processes to an e<ternal pro-ider that in turn owns administers and mana*es the selected process based on defined and measurable performance criteria 8usiness 2rocess 9utsourcin* !829' is one of the fastest *rowin* se*ments of the )nformation Technolo*y %nabled "er-ices !)T%"' industry Aew of the moti-ation factors as to why 829 is *ainin* *round are+ Aactor 1ost @d-anta*e %conomy of "cale 8usiness ,isk .iti*ation "uperior 1ompetency #tili:ation )mpro-ement (enerally outsourcin* can be defined as ; An organization entering into a contract with another organization to oerate an! "anage one or "ore o# it$ %u$ine$$ roce$$e$& Different Types of Services Being Offered By BPO's 1 Customer Support Services 9ur customer ser-ice offerin*s create a -irtual customer ser-ice center to mana*e customer concerns and queries throu*h multiple channels includin* -oice, e;mail and chat on a 2D/E and 34? days basis "er-ice %<ample+ 1ustomers callin* to check on their order status, customers callin* to check for information on products and ser-ices, customers callin* to -erify their account status, customers callin* to check their reser-ation status etc 2. Technical Support Services 9ur technical support offerin*s include round;the;clock technical support and problem resolution for 9%. customers and computer hardware, software, peripherals and )nternet infrastructure manufacturin* companies These include installation and product support, up = runnin* support, troubleshootin* and #sa*e support "er-ice %<ample+ 1ustomers callin* to resol-e a problem with their home 21, customers callin* to understand how to dial up to their )"2, customers callin* with a problem with their software or hardware 3 Telemarketing Services 9ur telesales and telemarketin* outsourcin* ser-ices tar*et interaction with potential customers for 6prospectin*6 like either for *eneratin* interest in products and ser-ices, or to up;sell / promote and cross sell to an e<istin* customer base or to complete the sales process online "er-ice %<ample+ 9utbound callin* to sell wireless ser-ices for a telecom pro-ider, outbound callin* to retail households to sell leisure holidays, outbound callin* to e<istin* customers to sell a new rate card for a mobile ser-ice pro-ider or outbound callin* to sell credit or debit cards etc D Employee IT Help-desk Services 9ur employee )T help;desk ser-ices pro-ide technical problem resolution and support for corporate employees "er-ice %<ample+ of this ser-ice include le-el 1 and 2 multi;channel support across a wide ran*e of shrink wrapped and H98 applications, system problem resolutions related to desktop, notebooks, 9", connecti-ity etc, office producti-ity tools support includin* browsers and mail, new ser-ice requests, )T operational issues, product usa*e queries, routin* specific requests to desi*nated contacts and remote dia*nostics etc ? Insurance Processing 9ur insurance processin* ser-ices pro-ide speciali:ed solutions to the insurance sector and support critical business processes applicable to the industry ri*ht from new business acquisition to policy maintenance to claims processin* "er-ice %<ample+ New Business / Promotion: )nbound/outbound sales, )nitial "etup, 1ase .ana*ement, #nderwritin*, ,isk assessment, 2olicy issuance etc Policy Maintenance / Management: ,ecord 1han*es like &ame, 8eneficiary, &ominee, @ddressB 1ollateral -erification, "urrender @udits @ccounts ,ecei-able, @ccountin*, 1laim 9-erpayment, 1ustomer care ser-ice -ia -oice/email etc 6. Data Entry Services / Data Processing Services "er-ice %<ample+ o $ata entry from 2aper/8ooks with hi*hest accuracy and fast turn around time !T@T' o $ata entry from )ma*e file in any format o 8usiness Transaction $ata entry like sales / purchase / payroll o $ata entry of %;8ooks / %lectronic 8ooks o $ata %ntry + 0ellow 2a*es / 7hite 2a*es /eyin* o $ata %ntry and compilation from 7eb site o $ata 1apture / 1ollection o 8usiness 1ard $ata %ntry into any Aormat o $ata %ntry from hardcopy/2rinted .aterial into te<t or required format o $ata %ntry into "oftware 2ro*ram and application o ,eceipt and 8ill $ata %ntry o 1atalo* $ata %ntry o $ata %ntry for .ailin* Hist/.ailin* Habel o .anuscriptin* typin* in to word o Taped Transcription in to word o 1opy, 2aste, %ditin*, "ortin*, )nde<in* $ata into required format etc 7. Data Conversion Services "er-ice %<ample+ o 1on-ersion of data across -arious databases on different platforms o $ata 1on-ersion -ia )nput / 9utput for -arious media o $ata 1on-ersion for databases, word processors, spreadsheets, and many other standard and custom;made software packa*es as per requirement o 1on-ersion from 2a*e maker to 2$A format o 1on-ersion from .s;7ord to >T.H format o 1on-ersion from Te<t to 7ord 2erfect o 1on-ersion from Te<t to 7ord to >T.H and @crobat o 1on-ert ,aw $ata into required ." 9ffice formats o Te<t to 2$A and 2$A to 7ord / Te<t / $oc o $ata 1ompilation in 2$A from "e-eral "ources o %;8ook 1on-ersion etc G Scanning, OCR with Editing & Indexing Services "er-ice %<ample+ o >i*h speed )ma*e;"cannin* and $ata capture ser-ices o >i*h speed lar*e -olume scannin* o 91, $ata Arom "canned pa*e / ima*e o "can = 91, paper 8ook in to 1$ o @$98% 2$A 1on-ersion "er-ices o 1on-ersion from paper or e;file to -arious formats 3 Book Keeping and Accounting Services "er-ice %<ample+ o (eneral Hed*er o @ccounts ,ecei-ables and @ccounts 2ayable o Ainancial "tatements o 8ank ,econciliation o @ssets / %quipment Hed*ers etc 10. Form Processing Services: "er-ice %<ample+ o )nsurance claim form o .edical Aorm / .edical billin* o 9nline Aorm 2rocessin* o 2ayroll 2rocessin* etc 11. Internet / Online / Web Research "er-ice %<ample+ o )nternet "earch, 2roduct ,esearch, .arket ,esearch, "ur-ey, @nalysis o 7eb and .ailin* list research etc Challenges for a HR Professional in BPO 1 8rand equity+ 2eople still consider 829 to be 5low brow5, thus makin* it difficult to attract the best talent 2 "tandard pre;job trainin*+ @*ain, due to the wide -ariety of the jobs, lack of *eneral clarity on skill sets, etc, there is no standard curriculum, which could be desi*ned and followed 3 8enchmarks+ There are hardly any benchmarks for compensation and benefits, performance or >, policies %-eryone is chartin* their own course D 1ustomer;companies tend to demand better results from outsourcin* partners than what they could actually e<pect from their own departments 57hen the job is bein* done 10,000 miles away, demands on parameters such as quality, turn around timeliness, information security, business continuity and disaster reco-ery, etc, are far hi*her than at home "o, how to be more efficient than the ori*inalS ? Hack of focused trainin* and certifications (i-en this back*round, the recruitin* and compensation challen*es of >, departments are only understandable Key To success The key to success in rampin* up talent in a 829 en-ironment is a rapid trainin* module The trainin* component has to be seen as an important sub;process, requirin* constant re;en*ineerin* Business Process Outsourcing: The Top Rankers 7&" has emer*ed as the top 829 in )ndia, pushin* 7ipro "pectra mind to the second position, accordin* to a sur-ey done by &@""19. The basis of rankin* is the re-enues *enerated by the 829 companies in 2003;0D, as per #" (@@2 @ list of top fifteen 829 companies in )ndia is *i-en below 1 7&" (roup 2 7ipro "pectra mind 3 $aksh e;"er-ices D 1on-er*es ? >1H Technolo*ies 4 Jenta E )1)1) 9ne source G .phasi" 3 %NH 10 Tracmail 11 (TH Htd 12 -1ustomer 13 >T.T 1D 2D/E 1ustomer 1? "utherland Technolo*ies The parameters for the sur-ey was+ %mployee "i:e !9peration le-el e<ecuti-es', 2ercenta*e of last salary hike, 1ost to company, 9-erall "atisfaction "core, 1omposite "atisfaction, 1ompany 1ulture, Job 1ontent / (rowth, Trainin*, "alary and 1ompensation, @ppraisal "ystem, 2eople, 2referred 1ompany+ !2ercenta*e of respondents of a company who named their own company as the preferred one', $ream 1ompany+ !2ercenta*e of respondents in the total sample who preferred a particular company' Employee Benefits Provided By Majority of the BPO Companies 2ro-ident Aund+ @s per the statutory *uidelines, the employee is required to contribute a percenta*e of his basic salary and $@ to a common fund The employer for this fund contributes as well The employee can use the amount deposited in this fund for -arious personal purposes such as purchase of a new house, marria*e etc (ratuity+ (ratuity is one of the retrial benefits *i-en to the employee in which the employer e-ery year contributes a particular amount The fund created can be used by the employee for the purpose of lon*;term in-estment in -arious thin*s such as a house etc (roup .edical claim )nsurance "cheme+ This insurance scheme is to pro-ide adequate insurance co-era*e of employees for e<penses related to hospitali:ation due to illness, disease or injury or pre*nancy in case of female employees or spouse of male employees @ll employees and their dependent family members are eli*ible $ependent family members include spouse, non;earnin* parents and children abo-e three months 2ersonal @ccident )nsurance "cheme+ This scheme is to pro-ide adequate insurance co-era*e for >ospitali:ation e<penses arisin* out of injuries sustained in an accident )t is applicable to all the employees of JA7T1 and co-ers total / partial disablement / death due to accident and due to accidents "ubsidi:ed Aood and Transportation+ The or*ani:ations pro-ide transportation facility to all the employees from home till office at subsidi:ed rates The lunch pro-ided is also subsidi:ed 1ompany Heased @ccommodation+ "ome of the companies pro-ide shared accommodation for all the out station employees, in fact some of the 829 companies also undertakes to pay electricity/water bills as well as the "ociety char*es for the shared accommodation The purpose is to pro-ide to the employees to lead a more comfortable work life balance ,ecreation, 1afeteria, @T. and 1oncier*e facilities+ The recreation facilities include pool tables, chess tables and coffee bars 1ompanies also ha-e well equipped *yms, personal trainers and showers at facilities 1orporate 1redit 1ard+ The main purpose of the corporate credit card is enable the timely and efficient payment of official e<penses which the employees undertake for purposes such as tra-el related e<penses like >otel bills, @ir tickets etc 1ellular 2hone / Haptop+ 1ellular phone and / or Haptop is pro-ided to the employees on the basis of business need The employee is responsible for the maintenance and safe*uardin* of the asset 2ersonal >ealth 1are !,e*ular medical check;ups'+ "ome of the 8296" pro-ides the facility for e<tensi-e health check;up Aor employees with abo-e D0 years of a*e, the medical check;up can be done once a year Hoans+ .any 829 companies pro-ides loan facility on three different occasions+ %mployees are pro-ided with financial assistance in case of a medical emer*ency %mployees are also pro-ided with financial assistance at the time of their weddin* @nd, The new recruits are pro-ided with interest free loans to assist them in their initial settlement at the work location %ducational 8enefits+ .any 829 companies ha-e this policy to de-elop the personality and knowled*e le-el of their employees and hence reimburses the e<penses incurred towards tuition fees, e<amination fees, and purchase of books subject, for pursuin* .8@, and/or other mana*ement qualification at )ndia6s top most 8usiness "chools 2erformance based incenti-es+ )n many 829 companies they ha-e plans for , performance based incenti-e scheme The parameters for calculation are process performance ie speed, accuracy and producti-ity of each process The 2ay for 2erformance can be as much as 22I of the salary Ale<i;time+ The main objecti-e of the fle<time policy is to pro-ide opportunity to employees to work with fle<ible work schedules and set out conditions for a-ailin* this pro-ision Ale<ible work schedules are initiated by employees and appro-ed by mana*ement to meet business commitments while supportin* employee personal life needs The factors on which Ale<i time is allowed to an employee include+ 1hild or 2arent care, >ealth situation, .aternity, Aormal education pro*ram Ale<ible "alary 8enefits+ )ts main objecti-e is to pro-ide fle<ibility to the employees to plan a ta<;effecti-e compensation structure by balancin* the monthly net income, yearly benefits and income ta< payable )t is applicable of all the employees of the or*ani:ation The "alary consists of 8asic, $@ and 1on-eyance @llowance The Ale<ible 8enefit 2lan consists of+ >ouse ,ent @llowance, Hea-e Tra-el @ssistance, .edical ,eimbursement, "pecial @llowance ,e*ular (et to*ether and other cultural pro*rams+ The companies or*ani:es cultural pro*ram as and when possible but most of the times, once in a quarter, in which all the employees are *i-en an opportunity to display their talents in dramatics, sin*in*, actin*, dancin* etc @part from that the or*ani:ations also conduct -arious sports pro*rams such as 1ricket, football, etc and re*ularly play matches with the teams of other or*ani:ations and colle*es 7eddin* $ay (ift+ %mployee is *i-en a *ift -oucher of ,s 2000/; to ,s E000/; based on their le-el in the or*ani:ation %mployee ,eferral "cheme+ )n se-eral companies employee referral scheme is implemented to encoura*e employees to refer friends and relati-es for employment in the or*ani:ation 2aid $ays 9ff .aternity Hea-e %mployee "tock 9ption 2lan CONCLUSION )nspite of all these benefits, the attrition rate in 829 industry is -ery hi*h, whyS 7hat is the reason for an employee to lea-eS These and many more are the questions that need immediate attention from the industrial *urus Why people prefer to join BPO's? )n *eneral a person with any *raduation can join any of the 829 "ome 8296s like to take people with .8@ but then a*ain the speciali:ation are of an indi-idual hardly makes any difference @*ain, this is the industryB where there is no reference checks and -ery often people don6t e-en specify there e<act a*e Hets me share with you some of the reasons as why people prefer to join a 829+ 1 $id not *et a better job 2 Aind nothin* better to do 3 %ducation le-el doesn6t matter D (ood work en-ironment ? (ood 8enefits 4 Ale<ibility of time E @ttracti-e life style G Transport facility Why people leave the BPO's? 7hen there are so many benefits associated with 829 industrywhen there are so many pri-ile*es for the 829 employees than what makes them to chan*e the company/industrySS )s it only .9&%0 that matters or anythin* else as wellSS >ere are some of the reasons for a 829 professional to chan*e his/her job 1 &o *rowth opportunity/lack of promotion 2 Aor hi*her "alary 3 Aor >i*her education D .is*uidance by the company ? 2olicies and procedures are not conduci-e 4 &o personal life E 2hysical strains G #neasy relationship with peers or mana*ers What they have to say? 7ith so much of uncertainty in the market 2eople are tryin* their best to stop or to at least ha-e a control on the attrition ratelet me share with you the opinion of the real *urus of the industry TTrainin* is a -ery important aspect of the )T%";829 industry T1areer *rowth in the industry is robust and there is a lon*;term opportunity The *reat *rowth momentum that the industry is witnessin* is creatin* both -ertical and lateral career opportunities There also e<ists enou*h *rowth opportunities in the middle; mana*ement and super-isory le-el within the industry5 )t will not be possible for the industry to arri-e at a blanket a*reement on poachin* but bilateral a*reements between companies are bein* si*ned 8asic norms are bein* put in place and code of ethics is bein* stressed upon by industry players within the sector with respect to >, practices 7e are encoura*in* companies to adopt responsible beha-ior in order to ensure that the industry does not become a -ictim of its own actions )ndustry needs to *o a**ressi-e but not cannibalistic5