Key Challenges Faced By The Bpo Industry Management Essay

Key Challenges Faced By The Bpo Industry Management Essay son of a bitch Drucker says origin is a change that creates a freshly dimension of performance.In todays c atomic number 18 world, competition has be produce fierce and sophisticated. Companies worldwide be tenor hard to operate as efficiently as possible and snap on the savings to the end consumers, in a bid to stopover ahead of the competition. In the process, many companies be forced to innovate to come up with ways to reduce costs, increase efficiency and identify differentiators non only for their own plaques but also for their client organizations. In the thick of this dog eats dog global competition, customers are true beneficiaries by demanding additional value, process plan and line of descent transformation from suppliers.In todays energizing world, intro is the hallmark of a competitive and leading organization. With attrition range and competition in the BPO and ITES sectors rampant, innovation is t he logical solution to stem the corrupt of this exodus and surge ahead of competition. Innovation, however, is non only about discoveries or bare-assed inventions it is a concerted initiative to implement new ideas and methods of doing blood line to increase the overall efficacy of results (read topline and bottomline).Innovation in BPO and ITES sectors is now pickaxe up after companies contain woken up to the fact that innovation is natural for survival and also in creating a competitive edge. Innovation occurs not randomly or accidentally but when there is a prim system/structure in place to encourage it. Any business is the sum total of its capabilities, which may differ from person to person. Nourishing innovation involves down the stairsstanding the various capabilities in an organization and harnessing them to the best of its ability. These capabilities includeDifferentiating capabilities an organizations autochthonic assets that describes its special nature and the real differentiating factorCore capabilities those that are hypercritical to the organizations survival, but may not necessarily help in specialisationSupport capabilities those that support the organizations core capabilities and foster them.This paper aims to analyse innovation in the Indian ITES diligence, success thereof and the focus needed to surpass in the lieu. In particular, the organozation I was working for was suffering from all the symptoms mentioned in the report.Key Challenges deliverd by the BPO industry today and ways to interlocking itFlight to ScaleGalloping Manpower CostsIncreasing investments in basisCustomer RetentionCustomer AcquisitionPeople RetentionTo face these challenges, BPOs are forced to innovate and come apart themselves in the market place. on that point are various types of innovation that a BPO can resort to billet Model Innovation run/Markets innovationOperations Innovation argumentation Model Innovation would mean changing the structu re of doing business or even changing the billing precedent. From an hourly billing rate or transaction based billing organizations are now looking at outcome based financial models and sharing the risk and reward with the customer.Services/Markets Innovation would mean targeting entirely new markets based on new or existing offerings. BPOs can also innovate by sexual climax up with entirely a new range of services. For example, many organizations are now talking about platform Platform BPO is about providing cable moulding services using a domain rich upright or horizontal application (platform). Good examples for Horizontal application would be FA, CRM etc. There are innumerable good platforms. Some examples are Mortgage operationing, Collection Management, Insurance Benefits Administration, Policy Administration, Claims Processing and the list goes on. The character of the platform is to set apart credibility to the BPO renderrs capability.Operations Innovation aims at p roviding useable excellence with new offerings. Organizations are increasingly investing in analytics to provide the client insights into the way business is conducted and identifying areas of improvement. In one sense, it is akin to consulting services. some other(prenominal) forms of innovation could be in the areas of employee practices and investments in new technology.This is a authoritative change, which is true also of what is slip bying in IT and has a remarkable pair with the transformation and rise of Japan in the post-war period. The transformation first occurs in transiting from cost advantage (wage merchandise) to quality. Then comes the stage where quality is taken for granted, like hygiene, and clients start demanding innovation as a matter of course. Indian BPO as also IT is here right now and the ability of Indian players to innovate, in which they are still beginners, will determine their future.A few examples of innovative players to help employee retentio nIntele last Global Services, one of the leading BPO companies in India and rated among top-10 by NASSCOM, offering BPO and technology consulting services to clients in various sectors across the globe, has capitalized on its capabilities by means of employee innovation practices. To eliminate the boredom of the employees and keep them motivated to give their best for continuous value-addition to their clients, it offers its employees three career railss in the form of vertical growth, horizontal growth, and shift to farm alliance. While 70% of promotions in the organization are internal, only 30% is external. After 2 years of service, if an employee doesnt unavoidableness to be a team leader (vertical growth), but desires to get into HR or training or other areas, he is allowed to shift diagonally across functions. Moreover, if someone who has worked for 2 years wants to move from nightshift to dayshift, then he is given first preference, subject to a vacancy in the parent com pany. Intelenet has sponsored offshore domain specialization training plans for its employees, besides certification programs much(prenominal) as Train the Trainer. It has sent its employees to participate in seminars and conferences of top focus institutes and also got them Customer Operations Performance Centre (COPC) certified. Similarly, Prudential Process Management Services (PPMS), the wholly-owned BPO subsidiary of Prudential UK, also offers vertical and lateral pass growth for its employees, thus enhancing value for its clients as well as employees through employee innovation.eFunds International, a US-based company providing technology solutions in financial risk heed and electronic payments, and consultancy services, is creating continuous value for its clients through employee innovation. Whenever an employee joins the organization, he is given a Magic Score Card, which serves as a training passport. eFunds provides its employees training expertise in domain areas an d also focuses on leadership skills. Because of its innovation initiatives, eFunds net revenues increased 11% from $532 million in 2003 to $552 million in 2004.Infowavz, another BPO company, offers a 1-year Management Development Program for fresh employees who join the company after completing their MBAs. It also offers an Accelerated Career Development programme for highly motivated and self-driven employees who look for continuous challenges and opportunities to maximize their potential. It has designed a unique Team Innovation programme for top performers who are associated with new projects at the pilot stage or proof-of-concept stage. Infowavz lucidly communicates its career path to employees at the recruitment stage, defining the Key Result Areas, and conducts an exhaustive educational activity Needs Analysis programme to identify the deficiencies and build employee competencies.There are quite a few BPOs investing on platform technologies to differentiate themselves from co mpetition and also to improve margins. Wipros experience in the outsourcing industry has take to the development of Base, a technology platform that integrates outsourced services with the customers internal business processes and fulfils the following requirementsFlexibility and continuous improvementControl and transparencyComplaince fast-breaking time to benefitAccuracy and QualityWhat it takes to be an innovatorA Partnering Attitude. Whats key here is a strong, long-term relationship amongst the ii organizations. Both organizations must discourage adversarial, us-versus-them attitudes. If the provider fails, the client failsand vice versa. This is not about warm, fuzzy feelings it is about clarifying synergies between the two organizations during the RFP cps and ensuring alignment of interest just like in joint ventures.The chastise Technology Platform. IT should support innovation. The technology platform provider must be able to make new technologies available quickly thr ough the provider. This requires culture collaboration between the BPO provider and the technology vendornot just marketing agreements. Also, buyers should learn technology vendors with a demonstrated track record in carry innovations to market over extended periods of time. BPO is long term it is an innovation marathon, not a sprint.The Appropriate Governance Mechanisms. Buyers must ingrain innovation in their governance. That includes creation of an innovation and technology council with members from some(prenominal) buyer and supplier who cumulate unremittingly to review progress, ensure the technology evolves, and check the benchmarks at regular intervals to identify where performance falls behind. And technology evolution must wedge innovation efficiently, meaning integration is easy because the platform conforms to standards. Buyers can treat their tech platform does this using proactive oversight and agreed-upon standards.Standardized Process Redesign and Related Tech nology. Buyers need to limit their customization demands whenever they can. If buyers want innovation, the service speech communication economics must work for the supplier. Suppliers that make money can hold to bring in innovation. This often becomes tricky because both buyer and supplier have to clearly understand the cost structure of the service deli very(prenominal). A provider forced to accept a service delivery model that does not harness economies of scale, process optimization, or access to labour arbitrage is never going to be able to innovate, and customers forcing BPO providers to tweak their offerings may inadvertently kill the very root of the economic advantage suppliers are conjectural to bring to the table. Better discussions about standardization pains and gains must happen between the client and the provider organization.Absolute top management commitment. No innovation can happen without top management commitment for both human and capital resources. This is very important because when investing in innovation sometimes results are not immediate. The senior management must have the vision and patience to reap the benefits.ConclusionInnovation in the BPO space continues to be a challenge for the following reasonsBPOs are normally under margin pressures and resource commitments for innovation are difficult to make.The SLAs are very stringent and time bound. Moreover daily performance could affect the commercials in a big way. This is because organizations see this as a window to fall in out to their customers and a slip here would directly affect their customer satisfaction. Hence contracts are very tight and normally followed to the dot. This leaves very secondary room for innovation. Running the operations everyday is a struggle in itselfPeople related issues are much higher when compared to the sister industry Information technology. The work hours are odd and the compensation less. This means a good amount of time being spent of mot ivational issues and coaching job and training.Due to all these reasons, innovation in the BPO space continues to be a challenge. But in future as competition stiffens and the line between IT and ITES fades, there is a good chance that the scene gets better, including the organization I was working for.