Thursday, August 16, 2007

Customer Service Outsourcing

The essence of good customer service is customer retention. Regardless of your industry, your customer care is of the utmost importance. More and more companies today are realizing that with growing competition, continuous technological innovations and constantly developing products and services, customers have numerous options to choose from. Thus is it essential to ensure that customer loyalty programs are a recognized and incorporated part of your business. Customer acquisition in naturally important but keeping the existing customers should be a long-term objective. Comprehensive customer relationship management in turn attracts new ones.

Outsourcing customer service can solve some of the problems you might currently be suffering from such as unresolved complaints, pricing issues, better offers from competitors, or simply not enough resources and time to handle each customer transaction with a personal touch

India is a very popular destination for customer service outsourcing due to several significant reasons. India is home to the largest English-speaking population in the world which is also largely computer literate

The most known benefit of customer service outsourcing is the low cost. Compared to western call centers, offshore customer service vendors can provide up to 50% in operational cost savings. Increased production is another important aspect. The geographical location of India for instance enables 24x7 operations.

Pro and Cons of Outsourcing

Advantages of Outsourcing
• Companies can save up on operational costs. In fact most companies can cut their operating costs to half by outsourcing
• Get access to cheaper and more efficient labor
• Cut up on labor training cost
• Get access to better technologies at a cheaper cost
• Increase productivity
• Concentrate on core competencies

Disadvantages of Outsourcing

• The company that outsourcers can get into serious trouble if the service provider refuses to provide business due to bankruptcy, lack of funds, labor etc
• Outsourcing requires the control of the process being outsourced by transferred to the service provider. Thus the company may loose control over its process
• The service provider in developing countries generally services many companies. So there are many chances of partiality owing to more payment by other parties
• The current employees in the company that outsourcers may feel threat due to outsourcing and may not work properly
• The attitude of people in the developed countries against companies that outsource is generally bad

The disadvantages of outsourcing may include the following:

· Loss of managerial control, because it is more difficult to manage outside service providers than managing one’s own employees working possibly in the same building.

· Often the hidden costs are difficult to calculate or prepare for. These include legal costs related to putting together a contract between two companies and the time spent to coordinating the contract. ·

Another disadvantage of outsourcing can be a threat to security and confidentiality. If your company is outsourcing processes like payroll, medical transcriptions or other confidential information, a company must be very careful in choosing which process it wants to outsource and to which provider.

· A possible loss of flexibility in reacting to changing business conditions, lack of internal and external customer focus and sharing cost savings may also be a disadvantage of outsourcing. · Other disadvantages of outsourcing may include unfavorable contract lengths, loss of competitive edge, problems in contract renewal, and contractual misunderstandings.

Advantages of Outsourcing

1. Concentration on core business areas

Back office operations of a company require high maintenance and specialized attention. Yet most of them are critical for the company's everyday activities. By outsourcing their back office operations businesses can concentrate on their core competencies while their back office operations are being managed smoothly by a specialized third party company.

2. World-class technology at lower rates
Investing in new technology is very costly and often risky. As the technology market develops rapidly, it is difficult to keep up with latest innovations and solutions. Thus outsourcing to companies that have the resources, expertise and desire to continuously update their technological solutions, offers a true advantage of outsourcing.

3. Skilled manpower at affordable prices
Outsourcing gives a company the ability to get access to skilled and trained man power at extremely low rates. This in turn leads to an increase in productivity as well as cost savings. By outsourcing a company saves on recruitment, training and other human resource costs it would otherwise have to maintain internally. Also an advantage of outsourcing is that a company is able to utilize the kind of expertise it could not internally provide.

4. Increased productivity
By employing skilled manpower in larger numbers at lower costs companies can really increase their productivity. This in turn would result in better customer satisfaction and increased profitability.

5. Beat Competition
In today’s fast paced global economy a company needs to provide high-quality services to its customers in order to retain them, as well as provide the services for cheap prices. Outsourcing in this case can help the company maintain lower rates with better service solutions, thereby giving them a better market position or even a competitive advantage.

6. Tax benefits
By selecting the right BPO destination companies can save up on taxes in turn saving on costs.

Accounts Payable Outsourcing

Many companies in the UK and US today are outsourcing their accounts payable jobs to offshore destinations. This trend of accounts payable outsourcing has several advantages for the company in terms of cheaper labor and quicker work

A company can outsource all or a part of its account payables business functions.
The functions may include any of the following:
• Accounts Payable Invoice Scan
• Accounts Payable Workflow
• Accounts Payable Invoice Entry
• Accounts Payable Payment Disbursement
• Accounts Payable Invoice Online Repository

Travel and ExpensesOutsourcing accounts payable can have several benefits:
• Up to 25% to 50% annual A/P processing cost savings without capital investment
• Greater, centralized control over payables across the enterprise, despite of the actual physical location
• World-class quality and accuracy ensuring accurate matching and elimination of duplicate and payments with errors
• Real-time tracking and reporting of all payables from the time they are received from the vendor
• Automated routing of payables for approval irrespective of location, enhancing control and manager productivity
• Elimination of the headache of recruiting, hiring and managing clerical staff
• The ability to focus on strategic, core business operations

An Overview on Business Process Outsourcing

1)The Outsourcing market is estimated to grow tremendously in the coming few with an increasing number of companies planning to outsource both low end and high end jobs to offshore destinations. Also the number of companies providing outsourcing services is on the rise, thus resulting in larger variety

2)Outsourcing in the world today is seen as a strategic management option rather than just a cost cutting operation. It aids companies to achieve their business objectives through operational excellence and a better market position. In order for companies to focus on their core competencies, all companies today outsource one or more of their operations. In order to compete in the global economy companies need to focus their resources on their core operations

3)The benefits of outsourcing thus include professional manpower, cutting-edge technology and cost savings. Through outsourcing companies receive flexibility in decision-making and companies are able to quickly set up or change certain operations or processes depending on the requirements at hand.

The short term benefits gained through outsourcing:
• Ability to focus resources and attention on core business processes.
• Reduced human resource management costs
• Access as needed to specialized resources
• Refinement of risk management, project management, and service delivery abilities.
• Implementation of demand management and service delivery disciplines.
• More accurate process management and support operations.

Typical long-term benefits include:
• More predictable results-based budgeting for the outsourced function over the period of a certain outsourcing agreement.
• Joint and interactive problem solving and creativity.
• Superior management of the business operations portfolio.
• Better management, contracting, and outsourcing integration skills

Monday, August 13, 2007

Top news from Indian Express

1)Eco-friendly coir industry gets 200cr for modernisation

2)Asian Development Bank and World Bank have agreed to provide financial assistance of for strengthening the rural cooperative credit structure in the country.

3)World leader in mobile phones Nokia alerted its customers of a possible malfunction of its handsets due to a faulty battery that could get overheated while charging and offered to replace them for free. The company issued a product advisory for the Nokia-branded BL-5C battery manufactured by Matsushita Battery Co of Japan between December 2005 and November 2006.

4)The service sector in India currently accounts for around 52 per cent of the total GDP, there is a dearth of a credible business model that offers the entire range of services to the consumers on a single platform in the country. Since only three per cent of the country’s population is presently able to avail the benefits of e-commerce due to poor internet penetration, s-Commerce is going to grow in India at over 100 per cent per annum. The growth of s-commerce is also expected to surpass e-commerce growth since around 80 per cent of the online transactions in service sector are made by paying in cash.

5)Employees in call centres and BPO companies are making quick moves through Employee Referral Programmes (ERP) and saving time for the recruiters. The process helps employees to earn as well as refer a friend. Employees are motivated and it makes them feel that they are a highly valued resource.
The referral process is easy. The employee needs to submit the resumé of the candidate whom he is referring along with the badge number (a unique number given to each employee). Then the person is called for an interview and if selected the amount is credited to the employee after the person referred completes six months with the organisation

6)India at 60: Pvt job salaries twice those of govt entities

7)The findings of this year's Grant Thornton International Business Report (IBR) 2007 reveals that for the fourth consecutive year India topped the chart as the most optimistic country

8)IT majors Infosys and Tata Consultancy Services (TCS) have emerged as the most reputed corporates in India while Tata Motors, Tata Steel and Hindustan Unilever have tied for the second place, says a corporate reputation index study
The largest car maker in the country Maruti Udyog has got the third highest number of votes on the index, says the global consultancy firm TNS' latest Corporate Reputation Index

9) India's third-largest software services exporter, Wipro Ltd, is in talks for software and technological support contract for an upcoming Boeing facility in India

10) India will be the second largest economy in the world by the mid-century, according to the country's High Commissioner to the UK, Kamalesh Sharma.

11) Emerging economies, including India, will overtake the developed countries in economic growth by 2050, with the popularity of India and China as investment destination is rising while the attractiveness Europe and North America is slipping, says a study.

The seven new global powers by 2050 will comprise the so-called BRIC economies (Brazil, Russia, India and China) together with Indonesia, Mexico and Turkey," says the Ernst and Young European Attractiveness Survey 2007.

These seven emerging countries would overtake the economies of the G7 countries -- Britain, Canada, France, Germany, Italy, Japan, United States -- in terms of gross domestic product (GDP) but whether India can develop its infrastructure at pace with that of global investment remains to be seen, the survey added.

12)Israel has proposed a Free Trade Agreement (FTA) with India to boost burgeoning economic and bilateral ties.

13) Wal-Mart Stores Inc and India's Bharti Enterprises said on Monday they had signed an equal joint venture for Indian cash-and-carry and retail back-end operations
The joint venture, to be called Bharti Wal-Mart Private Ltd, would open 10 to 15 cash-and-carry, or wholesale, facilities in India over seven years

14) Jet Airways on Monday launched its debut flight from Brussels to India, becoming the first private Indian carrier to fly to and from continental Europe