Third Party Service Providers O Usually Tpsp example essay topic

Introduction THE DEFINITION OF OFFSHORING AND OUTSOURCING There is no commonly accepted definition of "off shoring" in the public debate nor in the economic literature. However, the term "off shoring" is widely used as a particular subcategory of "outsourcing". The latter has been defined as "the act of transferring some of a company's recurring interval activities and decision rights to outside providers, as set in a contract". The typical consequence of such a decision is a decline of employment in the plant / firm that is doing the "outsourcing" and a rise in employment in the plant / firm from which the supplies are sourced thereafter.

The vagueness of the term is often related to the fact that it is not made clear if the change in sourcing of supplies refers to the plant level, the firm level or to the national level. The term "recurring interval activities" might include a given level of in-house supplies in a stagnant business environment, but the meaning is less clear in an expanding environment in which additional supplies from the outside do not necessarily result in an absolute reduction of employment but tend to limit its expansion. It is also useful to distinguish between a replacement of the supplies which takes place between plants of the same firm or from a non-affiliated firm (control-ownership), and whether the new sourcing is from plants in the home country or abroad (location). In certain cases, the sourcing decision goes hand-in-hand with new investment abroad, which leads some observers to focus the outsourcing debate on outright plant closures, with output being replaced by new greenfield investment abroad. Four types of "outsourcing" are reported, using location and control / ownership as distinguishing criteria: O Captive onshore outsourcing implies a shift in intra-firm supplies to an affiliated firm in the home economy.

O If the shift in sourcing of supplies benefits a non-affiliated firm in the home economy, one can describe it as non-captive onshore outsourcing. The term "onshore" could be replaced in both cases by "local" or "domestic". O Captive offshoring describes a situation in which future supplies are sourced from an affiliated firm abroad. O The fourth variant of outsourcing may be labeled non-captive offshoring and refers to the case when the new supplier is a non-affiliated firm and located abroad.

A major problem with the definitions above is that they do not concord easily with officially collected economic data. Outsourcing decisions are made at the micro level of plants or firms, while the official data are generally collected at the sectoral and national level. In the case of "offshoring", current statistical concepts do not allow a link to be made between import statistics and a management decision to substitute a product / service produced in-house by an imported product. Moreover, in contrast to merchandise trade, services trade flows recorded in balance of payments (BOP) statistics are generally not broken down by region and country, which hampers analysis of the geographic aspects of services offshoring. A further difficulty in services trade statistics is due to the importance of the large internal services transactions of multinational firms. Many of these internal across-border transactions might not be reported.

Another obstacle arises if one attempts to look at the sectoral breakdown of offshoring. The sectoral affiliation of a firm might not match the product or service, which is off shored. An automobile company might offshore its accounting services and a bank might offshore its IT services. Employment and the net value-added Produced in the home country in the automobile (banking) sector might fall as a consequence of offshoring without a corresponding increase in the imports of automobiles (financial services). These difficulties in the sectoral allocation of off shored activities also affect the estimate on the offshore potential of an economy. Obviously, services activities can also be off shored by non-services sectors.

Five Phases of BPO BPO, although beneficial in the long run, is very difficult to implement if it is not planned carefully. There are five basic phases that all companies go through when trying to outsource: partner selection, deal negotiations, transition management, process improvement, and performance management. Let's look at each phase in more detail. Phase 1: Analysis With BPO, the supplier owns and operates the resources, including infrastructure, applications, and people, to deliver a business process as a service to customers. Preparing for this transition to a supplier what were core processes requires substantial upfront planning.

The steps include: SS Research and education on the candidate process being outsourced SS Market intelligence to assess what competitors are doing SS Benchmarking the current process against the best - Goal: understand, improve, design, build, and source more cost-effective business processes SS Perform risk analysis SS Assess your own process core competencies SS Set the destination - what constitutes success? SS Evaluate total cost of engagement (gross margins, operating costs, taxes), Including infrastructure, management, knowledge capture, and training costs. Phase 2: Planning BPO contracts are long-term; hence, a projection into the future is imperative. Several factors such as the policy scenario, the quality of infrastructure and human capital, and the location of facilities can affect long-term outcomes. Following are some activities companies should plan to complete before outsourcing. SS Review existing processes.

SS Develop key improvement objectives. SS Decide which processes and functions to outsource. SS Perform a cost benefit analysis. SS Determine the ideal best-shore solution for various process specifications.

(For offshore projects, it's best to visit and get a feel for the country and the specific location, check process fulfillment capabilities, and meet the teams, not just management.) SS Evaluate organizational readiness and transition assessment SS Perform an offshore risk analysis. Obtain from your country state department and health department advisories as well as insurance agency inputs. Create a risk framework with escalating levels of risk (deacon model). SS Create conflict-resolution and escalation documentation for problems SS Develop a human resource plan to redeploy, transfer, or let go staff. Research internal opportunities for employees. Be prepared for backlash from your employees and the community.

Have a communication plan ready. Phase 3: Transition Companies that outsource processes to third-party service providers are placing their fate in the hands of another company. They need to ask tough strategic questions such as, what are the factors that companies figure in when they select their BPO service provider? How should the service agreement be structured to ensure that there are no defaults? What is the composition that companies must opt for - in-source, co-source or a stake in the operation - in order to be able to exercise control over processes and quality? The steps involved in this phase include: SS Send out the RFQ.

SS Evaluate bids after developing criteria, visiting potential partners, and discussing a pilot approach. SS Select vendor based on its track record, industry specialization, corporate culture, or other criteria. SS Draw up contract with an understanding of the cost model, HR issues, business continuity, metrics, payment models, terms and conditions, provisions for changes. SS Negotiate contract.

SS Determine payment terms and conditions, i. e., pay up-front or over an extended period. SS Manage the transition by developing a transition timeline. SS Align incentives to create a win-win. SS Communicate clearly the contract and responsibilities to the outsourcing partner. SS Define in detail the scope of the project. SS Mitigate operational risk by planning for unexpected operational problems, the end of the outsourcing relationship, and data protection.

SS Transfer knowledge after assessing what knowledge needs to remain in-house and what can be transferred. Document your findings. SS Train new staff SS Manage the project remotely Phase 4: Governance Without appropriate checks and balances, companies run the risk of jeopardizing their customer relationships through an inability to provide continuous, good service and of failing to improve productivity. What can companies do to guarantee quality and still enjoy the benefits that BPO offers?

SS Transform the critical processes, SS Develop operational processes and tools, SS Manage the change actively by addressing resistance, facilitating the change, communicating new processes, procedures, roles, and responsibilities, and celebrating early success. SS Train staff SS Perform relationship management SS Perform quality management SS Engage in scenario planning, or business continuity planning, by creating contingency plans. Phase 5: Improvement primary concern with outsourcing lies in companies ensuring that the high level of quality they achieved internally using methods like Six Sigma before outsourcing is further improved. This requires paying attention to the following tasks: SS Tracking performance through key metrics SS Leveraging new capabilities SS Demanding continuing innovations SS Designing process improvements The fundamentals don't change: Set targets, demand results, measure progress, adjust direction, and reward success. Then, do it all over again and again and again. A systematic planning and execution framework can help deliver the expected value from BPO strategies.

But be prepared for changing the way you currently do business. BPO involves a significant amount of change management. BPO: An Overview BPO [Business Process Outsourcing] has been the latest mantra in India today. As the current sources of revenue face slower growth, software companies are trying new ways to increase their revenues. BPO is top on their list today.

IT services companies are making a quick entry into the BPO space on the strength of their existing set of clients. An ordinary BPO center that takes care of pure back office operation [e.g. payroll, data entry] is not be as expensive as a call center. The philosophy behind BPO is specific, do what you do best and leave everything else to business process outsource rs. Companies are moving their non-core business processes to outsource providers. BPO saves precious management time and resources and allows focus while building upon core competencies. The list of functions being outsourced is getting longer by the day.

Call centres apart, functions outsourced span purchasing and disbursement, order entry, billing and collection, human resources administration, cash and investment management, tax compliance, internal audit, pay roll etc... the list gets longer everyday. In view of the accounting scandals in 2002 [Enron, World Com, Xerox], more and more companies are keen on keeping their investors happy. Hence, it is important for them to increase their profits. BPO is one way of increasing their profits. If done well, BPO results in increasing shareholder value. Typically, a customer calls the call center [usually a toll-free number].

After pressing numerous numbers [1 for English, 2 for Spanish, 3 for bank balance!] the operator will answer your query by accessing the database. Call centres address sales support, airline / hotel reservations, technical queries, bank accounts, client services, receivables, tell marketing and market research. If a bank shifts work of a 1000 people from US to India it can save about $18 million a year due to lower costs in India. According to Mckinsey, giant US parma firms can reduce the cost of developing a new drug, currently estimated at between $600 million and $900 million by as much as $200 million if development work is outsourced to India. Benefits derived from BPO can be summarized as follows: O Productivity Improvements O Access to expertise O Operational cost control O Cost savings O Improved accountability O Improved HR O Opportunity to focus on core business Outsourcing is not new - it has been a popular management tool for decade. One can safely say outsourcing has evolved: - 1960's - time-sharing 1970's - parts of IT operations 1980's - entire IT operations 1990's - alliances / tie -ups 2000's - IT-enabled services India has one of the largest pools of low-cost English speaking scientific and technical talent.

This makes India one of the obvious choices to outsource to. Dell, Sun Microsystems, LG, Ford, GE, Oracle all have announced plans to scale up their operations in India. Others like Citibank, American Express, IBM and British Airways are leveraging the cost advantage India has to offer while setting up call centres. Several foreign airline and banks have too set up business process operations in India. Indian revenues from BPO are estimated to have grown 107 per cent to $3928 million. Many European and US companies have realized that they should focus on their main business and outsource their Human Resource Department, accounting department etc.

It is here exactly India fits in. Today US corporations have embraced BPO wholeheartedly. There are three business models of BPO: transactional, niche, and comprehensive. As shown in the figure below, there are several characteristics that distinguish between these three flavors of BPO.

BPO Business Model Transactional Niche Comprehensive Number of processes Transactions only, typically for 1 process 2-4 processes 10+ processes in a function; sometimes more than one function Invest in client assets? No, migrate everything to their system Yes - but modest dollars and personnel take-on Yes - significant dollars and employee take-on Hire client's people? No Yes - but usually 50 Yes, usually 100's and often in the 1000 locations Work at provider's location; very low headcount at the client site -typically account managers and sales people Mixed, people at both client and provider locations Mixed, people at both client and provider locations Geographic spread Multi-country Domestic ( 80% of revenue) with some international (typically Europe) Global Contract duration 1-2 years 3-5 years 7-10 years Contract value per year $1-5 million a year $5-10 million a year $50-$100 million a year Business model Offload transactions from client, use provider's software Make processes more efficient - reduce costs, raise service levels Make functions more effective, introduce best practices Accountability For the transaction processing For process outcomes For cost savings for the entire function plus business outcome Risk-holder 90% of the risk is still on the client, 10% provider 50% client, 50% provider 30% client, 70% provider Metrics Per transaction Based on outcome Based on outcome Transaction providers handle the transactions for only one process. In payroll, for instance, they do not take over your payroll department; they only cut the checks. They do not take on the client's people, their contracts are short (1-2 years), and the contract values are not large ($1-5 million a year). Using transaction providers has many benefits, but the more processes the company outsource, the more fragmented the processes become.

In essence, the clients still have an in-house department to manage. In transaction outsourcing, most of the operational risk stays with the client. There might be penalties for non-performance, but these are minor because the client still retains most of the function in-house. Niche providers focus on two to four processes. Niche providers will hire your people, but only up to 50 or so.

They will invest modest amounts of capital to release some of your asset value. For instance, they will invest money migrating assets to their system or they will buy your assets in their specialist process area. Niche providers are generally domestic, and their deals range from three to five years in length, with a yearly contract value of $5-10 million. Niche providers aim to make selected processes more efficient, by lowering costs and raising service levels.

They are paid based on outcomes, such as lowering turnover or reducing hiring time from 120 days to 90 days. In niche outsourcing, risk is typically shared evenly between client and provider. Although the providers will hire your people and be responsible for outcomes, they only make limited investments in capital and only impact a few processes. Thus, clients continue to shoulder the other processes in a function. Comprehensive providers handle almost all the transactional and administrative processes in a function, or even several functions, such as HR and financial accounting. For in stance, there are 22 processes in HR and 33 processes in finance and accounting.

Comprehensive BPO prefers global deals, which are typically 7-10 years in length, and are generally over $100 million a year. These providers will buy client assets and will take on hundreds and sometimes thousands of client staff. Comprehensive providers strive to make interrelated processes more effective, so they aim to reduce the total cost of a function by introducing best practices - such as requiring direct deposit of payroll or increasing the HR-to-employee ratio from 1: 50 to 1: 300. They are accountable for cost savings as well as outcomes for an entire function, so clients pay for outcomes, not inputs. Comprehensive providers shoulder 70 percent of the operational risk of the in-scope processes because they are responsible for the information technology, transactions, and administrative elements of those processes. Furthermore, they invest significant amounts of capital in the relationship, and they absorb most client personnel.

The risk to clients is that comprehensive BPO is new - it's only been around for two-three years - so providers are less mature, their processes less proven, and most have very few reference-able accounts. Different Types of Services Being Offered By BPO's 1. Customer Support Services Our customer service offerings create a virtual customer service center to manage customer concerns and queries through multiple channels including voice, e-mail and chat on a 24/7 and 365 days basis. Service Example: Customers calling to check on their order status, customers calling to check for information on products and services, customers calling to verify their account status, customers calling to check their reservation status etc.

2. Technical Support Services Our technical support offerings include round-the-clock technical support and problem resolution for OEM customers and computer hardware, software, peripherals and Internet infrastructure manufacturing companies. These include installation and product support, up & running support, troubleshooting and Usage support. Service Example: Customers calling to resolve a problem with their home PC, customers calling to understand how to dial up to their ISP, customers calling with a problem with their software or hardware.

3. Telemarketing Services Our telesales and telemarketing outsourcing services target interaction with potential customers for 'prospecting' like either for generating interest in products and services, or to up-sell / promote and cross sell to an existing customer base or to complete the sales process online. Service Example: Outbound calling to sell wireless services for a telecom provider, outbound calling to retail households to sell leisure holidays, outbound calling to existing customers to sell a new rate card for a mobile service provider or outbound calling to sell credit or debit cards etc. 4. Employee IT Help-desk Services Our employee IT help-desk services provide technical problem resolution and support for corporate employees. Service Example: of this service include level 1 and 2 multi-channel support across a wide range of shrink wrapped and LOB applications, system problem resolutions related to desktop, notebooks, OS, connectivity etc., office productivity tools support including browsers and mail, new service requests, IT operational issues, product usage queries, routing specific requests to designated contacts and remote diagnostics etc.

5. Insurance Processing Our insurance processing services provide specialized solutions to the insurance sector and support critical business processes applicable to the industry right from new business acquisition to policy maintenance to claims processing. Service Example: New Business / Promotion: Inbound / outbound sales, Initial Setup, Case Management, Underwriting, Risk assessment, Policy issuance etc. Policy Maintenance / Management: Record Changes like Name, Beneficiary, Nominee, Address; Collateral verification, Surrender Audits Accounts Receivable, Accounting, Claim Overpayment, Customer care service via voice / email etc.

6. Data Entry Services / Data Processing Services Service Example: o Data entry from Paper / Books with highest accuracy and fast turn around time (TAT) o Data entry from Image file in any format o Business Transaction Data entry like sales / purchase / payroll. o Data entry of E-Books / Electronic Books o Data Entry: Yellow Pages / White Pages Keying o Data Entry and compilation from Web site o Data Capture / Collection o Business Card Data Entry into any Format o Data Entry from hard copy / Printed Material into text or required format o Data Entry into Software Program and application o Receipt and Bill Data Entry o Catalog Data Entry. o Data Entry for Mailing List / Mailing Label. o Manu scripting typing in to word o Taped Transcription in to word. o Copy, Paste, Editing, Sorting, Indexing Data into required format etc. 7. Data Conversion Services Service Example: o Conversion of data across various databases on different platforms o Data Conversion via Input / Output for various media. o Data Conversion for databases, word processors, spreadsheets, and many other standard and custom-made software packages as per requirement. o Conversion from Page maker to PDF format. o Conversion from Ms-Word to HTML format o Conversion from Text to Word Perfect. o Conversion from Text to Word to HTML and Acrobat o Convert Raw Data into required MS Office formats. o Text to PDF and PDF to Word / Text / Doc o Data Compilation in PDF from Several Sources. o E-Book Conversion etc. 8.

Scanning, OCR with Editing & Indexing Services Service Example: o High speed Image-Scanning and Data capture services o High speed large volume scanning o OCR Data From Scanned page / image o Scan & OCR paper Book in to CD. o ADOBE PDF Conversion Services. o Conversion from paper or e-file to various formats 9. Book Keeping and Accounting Services Service Example: o General Ledger o Accounts Receivables and Accounts Payable o Financial Statements o Bank Reconciliation o Assets / Equipment Ledgers etc. 10. Form Processing Services: Service Example: o Insurance claim form o Medical Form / Medical billing o Online Form Processing o Payroll Processing etc. 11.

Internet / Online / Web Research Service Example: o Internet Search, Product Research, Market Research, Survey, Analysis. o Web and Mailing list research etc. Pros & cons of outsourcing Third Party Service Providers (TPSPs) o Usually TPSP already has expertise and experience with other clients in similar business lines. o Very competitive pricing / flexibility to assess various TPSPs o No infrastructural / capital investment. o Payback period very less (usually between 6 months to a year). o Flexibility to source multiple TPSPs. o Flexibility to scale up and down business relationship. o Can exit from one relationship and move to another. o Retains decision-making, therefore relationship with TPSP is clear (fee-based, quality-based); no staff backlash. o As TPSP works towards a profit there is more business commitment. o Customized solutions ensure data security and safety. Advantages o Focus on core business issues. o Benefit from best-of-breed solutions. o Better quality at lower costs. o Better process maturity, resource flexibility and economies of scale. o Flexibility in deploying new technology. o Quick wins with outsourcing. Disadvantages o Burden of excess capacity or challenge of insufficient capacity is done away with. o High unit personnel cost. o Tight business margins. o Not enough financial muscle to sustain very tight payback periods. Captive centers o Build expertise from scratch by redeploying resources. Latter option more expensive. o Unit costs higher. o High capital investment. o Payback usually between 3 and 5 years. o Committed to bringing in economies of scale, hence the need to establish a sufficiently large center. o Committed resources reduces such flexibility, else training costs could shoot through the roof. o No exit possible without incurring high costs. o May or may not retain decision-making.

Possibility of backlash from senior management personnel. o Captive units are usually cost centers. o Long-term strategy looks for establishing centers to first move work as-is, and save costs first. Advantages o Securing data is less complicated. o Capture margins that would otherwise go a TPSP. o Decision making authority contained within the organization. o Tighter management control Disadvantages o Expensive specialist skill in host countries. o Compliance and legal restrictions. o Unavailability of skilled manpower due to market stagnation. o Requires considerable effort in terms of management's time and attention to establish Comparing India with other BPO Destinations (Why India?) The abundant skilled manpower has made India a target destination for multinationals to back end their operations in India. India ranks high in areas such as qualifications, capabilities, quality of work, linguistic capabilities and work ethics, and thus is ahead of competitors such as China, Philippines, Ireland, Australia, and Canada etc. Indian companies have unique capabilities and systems to set, measure and monitor quality targets.

In specific BPO categories, Indian centers have achieved higher productivity levels-for example, the number of transactions per hour for back office processing, than their Western counterparts. Also, India is able to offer a 24 x 7 service and reduction in turnaround times by leveraging time zone differences. India's unique geographic positioning makes this possible. Many state governments in India are offering incentives and infrastructure to set up IT enabled services. About 100,000 engineers graduate from India every year. Many of these engineers are employed with call centers for troubleshooting and providing technical support at salaries that are dramatically lower compared to the pay scales in the US.

The average monthly salary in India is $400-700 compared to $2,700-2,800 in the US. BPO India China Russia Canada Ireland Government Support H L L M H Labor Pool H L L M Infrastructure M M L H H Educational System H H H H Cost Advantage H H H M Quality H L L H H Cultural Compatibility M L L H Time / distance Advantage H H M L English Proficiency H L L H HH = High M = Medium L = Low Source: neoITAdvantage India. 1 Feature: Maximize companies' return of investment. Choosing India would reduce the software development costs, which will drop to less than $7 per hour per employee.

Benefit: The company will be able to spend savings on obtaining clients and growing your business. 2 Feature: No start up costs, additional fees or taxes. The monthly fee is everything the company will be paying. Benefit: When hiring from US companies would erase all recruitment costs and other costs involved when setting up new offices. 3 Feature: The hard-working IT professionals and coaching managers will make sure that the companies visions come true. Benefit: Outsourcing work would let the company relax as the BPO's help the companies business grow.

4 Feature: Flexibility. Benefit: As IT outsourcing needs change the BPO change with the company. 5 Feature: BPOs are fast. They have an extensive database of competent candidates, which they query when there is an inquiry from the company. Benefit: BPOs can employ a person with a matching profile within days. 6 Feature: There are no 'minimum number of months'-contracts in most BPOs Benefit: Some BPOs state that the MNC can simply stop paying when they no longer need the services.

7 Feature: BPOs services are suitable for both one-man operations and big companies. Benefit: The BPO will stand by as the outsourcing company grows. 8 Feature: The company can always reach the on-site managers via phone, email or messenger. Benefit: Communicating with the BPO is easy!

9 Feature: BPO adjust to the companies needs. Benefit: The BPOs dedicated employee works according to the company's schedule. There are no extra fees for night shifts. 10 Feature: Stability and trustworthiness.

Most BPOs are a profitable and debt free company and are in this business for the long run. Benefit: The BPOs respect the company's projects and want to see they succeed. Most BPOs will never say yes to an assignment just to get the money. The companies can be confident that the BPO will deliver what they promise. Indian Market size estimates of BPO Nasscom has estimated that the Indian ITES industry will gross over $5.7 billion by 2005 (based on a conservative year-on-year growth of 65 percent by Nasscom). O Nasscom-McKinsey: In 1999 they estimated by 2008 it will be $17 billion but it has been revised to $21-24 billion by 2008.

Indian can capture 25% of global BPO offshore market and 12% of the market for other services such as animation, content development and design services. O Gartner: $1 billion (2002), $1.2 billion (2003). $13.8 billion by 2007. Gartner does not incorporate animation, medical or other (legal) transcription services, GIS, market research, data search, research and development, network consultancy and other non-business processes in its estimates on the ITES market size and potential. Revenue Year 2002 2003 2004 2005 2006 2007 CAGR Offshore BPO Revenue 1,322 1,825 3,017 6,439 12,563 24,230 78.91 Indian BPO Revenue 912 1,205 1,961 3,928 7,412 13,811 69.35 Total BPO Market 110,167 121,687 131,171 143,090 157,033 173,070 9.45 CAGR in % 2002-07 Figures in $ million Source: Gartner Dataquest (May 2003) HR BPO Last Financial Year HR outsourcing forecasts by process in Asia Pacific (In $ million) Payroll services 761.20 Benefits administration 535.65 Education and training 555.99 Recruiting and staffing 347.98 Personnel administration 167.16 Other HR functions 191.97 Total 2,560.00 Source: Gartner India vs. U.S. BPO operating costs US$ Cost per FTE (Full Time Employee) United States India India as % of US costs Personnel 42,927 6,179 14%G&A Expense 8,571 1,000 12%Telecom 1,500 2,328 155%Property Rentals 2,600 847 33%Depreciation 3,000 1,500 50%TOTAL EXPENSES 58,598 11,854 20%Source: Industry Sources, Me rill Lynch 2003 (From the Nasscom Strategic Review 2003) BPO Service India - SWOT Analysis Strengths O Highly skilled, English-speaking workforce. O Cheaper workforce than their Western counterparts.

According to Nasscom, The wage difference is as high as 70-80 percent when compared to their Western counterparts. O Lower attrition rates than in the West. O Dedicated workforce aiming at making a long-term career in the field. O Round-the-clock advantage for Western companies due to the huge time difference.

O Lower response time with efficient and effective service. O Government Support Weaknesses O Recent months have seen a rise in the level of attrition rates among ITES workers who are quitting their jobs to pursue higher studies. Of late workers have shown a tendency not to pursue ITES as a full-time career. O The cost of telecom and network infrastructure is much higher in India than in the US. O Cultural differences Poor globalization skills Opportunities O To work closely with associations like Nasscom to portray India as the most favored ITES destination in the world. O Indian ITES companies should work closely with Western governments and assuage their concerns and issues.

O India can be branded as a quality ITES destination rather than a low-cost destination. Threats O The anti-outsourcing legislation in the US state of New Jersey. Three more states in the United States are planning legislation against outsourcing Connecticut, Missouri and Wisconsin. O Workers in British Telecom have protested against outsourcing of work to Indian BPO companies. O Other ITES destinations such as China, Philippines and South Africa could have an edge on the cost factor. Countries that are serious competitor (s) to India?

Philippines boasts of strong skills in finance and accounting. The other countries India is competing with are Mexico, Canada and Ireland. In terms of cost, Philippines and Malaysia are competitive with India. However, India's main competitors in the BPO space produce a fraction of the graduates that India does. Cost of Education in Cities Country USP Limitation Philippines Understands the US market; voice work; low attrition More expensive than India; small talent pool Canada, Ireland, Australia Understands the US market; high-end skills High costs South Africa Time zone similar to Europe; 25% cost saving, good for niche work Skill shortage China Low costs Quality of English not good Russia Technology skills Poor infrastructure; corruption; language Czech Republic, Hungary European language skills Small talent pool; high costs Mexico Immediate neighbor of US, 30% cheaper than US; Spanish skills Good only for low-end jobs.