BPO MANAGEMENT SYSTEM

INTRODUCTION:
Few years back, nobody would have imagined that a day would
come when no direct contact with customers are needed. All the
business processes are done from a remote location with the help of
technological advancement. Telecommunication industry has spread
their hands an all over the globe through internet services. During
1990’s the development of telecommunication reduced the cost and
enhanced the ease of communication across the world. All the
informations are now converted into digital format, which is easy to
transfer of work offshore utilizing resource arbitrage.

In the era of globalization all the multinationals reviewed their

strategic positions to overcome severe competition and general
slowdown in the global economy. All the companies want to maximize
their profits through proper allocation of resources. The activities of
the companies can be segregated as core and non-core activities.
The main emphasis is given to the core processes of the company by
utilizing their resources and managing their limits. So all the non-core
processes are handled by the outside experts. The outburst of
information technology made an easy route to compete globally. All
the companies want to be economically benefited by off-shoring their
non-core activities. The real time communication cost is gradually
decreasing due to the enormous application of web-based tools. Now
all the business operations are going across thousands of miles due
to globalization of non-core processes. Standardized web-based tools
have used globally to transmit data.

Information Technology enabled services (ITES) outsourcing

helps the multinationals to diversify their non-core operations. Cost
advantages, competitive pressures, specialized service providers act
as a catalyst of outsourcing. So the core processes are the main
activity of the companies. To enhance these core processes the
company utilizes their resource base and time management to hold a
good share of global market.

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VISION STATEMENT:

BPO MANAGEMENT SYSTEM is the process of delegating

one or more business processes to an external partner. It is generally
for back-end administrative functions that are necessary to run a
business but are not a part the core business processes. Bargaining
businesses, pressures of competition, shrinking time span, easier
time communication, the concept of ‘global village’ with seamless
synergies, abundant hard working and skilled personnel at low cost
and the ability to work round the clock due to time zone differences
are some of the reasons for the surge in outsourcing.

WHY OUTSOURCING/RATIONALE:
Business Process Outsourcing is beneficial to both the
outsourcing company and the service provider, as enables the
outsourcers to reduce cost and increase quality in non-core areas of
businesses and utilize his expertise and competencies to the
maximum. BPO MANAGEMENT SYSTEM saves precious
management time & resources and allow focus while building upon
core competencies. Companies are generally looking at low cost
destination where third-party service provider is available.

Optimizing business performance to attain value chain is the

main activity of an outsourcing firm. Following services are provided
by the BPO MANAGEMENT SYSTEM – Receivable & Payables,
Inventory Management, Other Processing, Quick Book Accounting,
Financial Statement Preparation and Accounting services. BPO
MANAGEMENT SYSTEM saves time, explore new revenue areas,
accelerate other projects and focus on their customers. Some
motivational factors of BPO MANAGEMENT SYSTEM enhancement
are factor cost advantage, economies of scale and business risk
litigation.

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REQUIREMENTS:

For an effective functioning of a BPO Management System its

requirements needs to be clearly stated. Requirements are generally
classified as:

1. FUNCTIONAL

2. NON-FUNCTIONAL

FUNCTIONAL REQUIREMENTS:

A Functional Requirement is a requirement that, when satisfied, will

allow the user to perform some kind of function. For example:

“The customer must place an order within two minutes of registering”

For the most part, when people are talking about Business
Requirements, they are referring to Functional Requirements which
are generally referred to as “requirements”. Functional Requirements
have the following characteristics:

• uses simple language

• not ambiguous
• contains only one point
• specific to one type of user
• is qualified
• describes what and not how

NON-FUNCTIONAL REQUIREMENTS:

A Non-Functional Requirement is usually some form of

constraint or restriction that must be considered when designing the
solution. For example:

“The customer must be able to access their account 24 hours a day,

seven days a week.”

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For the most part when people are talking about Constraints, they are
referring to Non-Functional Requirements. Non-Functional
Requirements have the same following characteristics:

• uses simple language

• not ambiguous
• contains only one point
• specific to one type of user
• is qualified
• describes what and not how

Non-Functional requirements tend to identify “user” constraints and

“system” constraints. Business requirements should be kept pure and
not reflect any solution thinking. A system constraint is a constraint
imposed by the system and not dictated by a Business Need. Since
system constraints are part of a “solution”, they should be
documented in the System Specifications document. For example:

“The system must be unavailable from midnight until 1:00am for

backups.”

This is a restriction imposed by the system and not a user request.

Some people like to further classify the Non-Functional Require

ments into such categories as “Performance Constraints, Design

Constraints, Quality Constraints, etc.. This classification can be used
if there is deemed to be a benefit.

THE PROCESS(PROBLEM STATEMENT):

A company outsourcing work goes about the process in four

stages. As the first step, it has to develop the strategy for
outsourcing. This means that the company has to first of all identify its
business case for outsourcing, and also have a clear idea of the role
of outsourcing in its business. The next step is to evaluate potential

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service providers and decide on projects and locations. Contract
development comes as the next step, where the buyer and vendor
negotiate and settle on legal, pricing and service level agreement
terms. The outsourcing contract is on from this stage, and in the
fourth stage the buyer has to manage the outsourcing relationship.

MODELS OF OUTSOURCING:
Business Process Outsourcing is a process which is being
adopted many of the western companies to reduce their cost burden
& improve their product quality. BPO’s activity can be classified in the
following chart –

There so many models of outsourcing but only three models

are very much practical, which are shown below –

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SUCCESSFUL OUTSOURCING:

Whatever the business case, the success of an outsourcing

relationship depends on the following factors. The client organization
should have set up proper executive-level support for the outsourcing
project. It should also have ongoing communication with both the
service provider and in-house departments and personnel involved. It
is also important to manage the outsourcing relationship with the
service provider along the right track. And last but not the least, both
the client and vendor should allow for flexibility to accommodate
changing business needs.

CHALLENGES AND PROBLEMS:

A standard challenging situation in outsourcing is offshore
outsourcing. Language, culture and time zone can all create
problems.With outsourcing, sometimes a company loses direct
contact with its clients, thus preventing it from developing lasting
customer relationships. Delayed communications or implementation
is another potential trouble zone. These render the company in a
situation of being in less control than desired. Also, sensitive
information may become more vulnerable when third parties are
brought into the picture. With both benefits and disadvantages in the
picture, it is important that a company evaluates and assesses its
needs and situation before joining the outsourcing bandwagon.

BENEFITS OF BPO MANAGEMENT SYSTEM:

Benefits derived from BPO can be summarized as follows –

I. Productivity improvements -
As the company doesn’t manufacture their products in-house
only, they are using on-shoring or off-shoring business processes to
the third party services provider. Maximum portion of the
manufactured goods are now being taken from outsourcers who are
experts in this fields. So improvement of productivity can be seen in
an increasing trend.

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II. Access to expertise -
Low cost destination & experts domain knowledge gives the
company better exposure in their market share. Therefore rather than
training own personnel & recruiting domain experts it is economical to
outsource the jobs. Prescribed guidance & rules are followed by the
experts.

III. Operational cost control -

By outsourcing non-core processes, companies can focus on
other operational areas. Many operating costs are being eliminated
by outsourcing the jobs. Hence the company can concentrate on their
main operating areas e.g. developing new products, expanding
market span, enhancing customer satisfaction etc.

IV. Cost savings -

Through process improvements, re-engineering, use of
technologies, domain expertise can help to minimize total cost. This
leads to reducing the administrative cost and operating cost. By
outsourcing the company can make some control on cost savings.

V. Improved accountability -
Transparency can be seen by outsourcing any job. Some
specific guidelines and rules are being given to the outsourcers.
Contract amount are also fixed. Natures of any job, delivery details,
time span etc are being mentioned in the contract, so easy and
improved accountability can be seen.

VI. Improved HR -
Flexible and scalable services are provided to accompany the
changing customer needs & requirements. New inventions to the
goods & up gradations are the main area of outsourcing. HR
personnel are taken care to the customer needs.

VII. Opportunity to focus on core business –

As the non-core activities are outsourced, management can
concentrate on their core business operations. Increasing scales,

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inventing new products, supporting company acquisitions,
consolidations etc are the main area of the management.

IMPLEMENTATION ISSUES :

For selecting a BPO partner, certain issues or factors are to be taken

in care. The considerations are as follows –

I. Competency –
Every firm wants to outsource their non-core activities. But the
competency is related with the core activities of the business
processes. Practically all the core activities are processed in-house
but some automobile industries are now-a-days outsourcing their
core processes. HR activity is the only activity which is not fully
outsourced, as HR activity differs from industry to industry. So
assessment of outsourcing agents is very much important for the
customer satisfaction.

II. Control -
Control is a very vital factor in choosing BPO. Control can be
done in two perspectives – long term & short term control. When any
long term contract is taken into consideration, the supervision or
control should get preference because in long term the controlling
aspect may be get weaker. But in short term contract the control is
needed to know how the firm is doing, as the outsourcing company
desires. Too little control is also makes an adverse result and too
much control means doing the job himself.

III. Cost -
Cost is to be determining after evaluation of the outsourcing
job. The vendor firm quoted the least cost. The outsourcing company
always looking at low cost destinations, so the least cost vendor
takes the contract. If there is any escalation cost, then in the long
term when inflation arises, outsourcing is uplifted. So the outsourcing
company looked for reasonable savings in the cost without
compromising quality.

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IV. Confidentiality -
As outsourcing are done far across the country with the help of
telecommunication services, so no direct control is being seen from
the outsourcing company .As the non-core activities are outsourced,
management can concentrate on their core business operations.
Increasing scales, inventing new products, supporting company
acquisitions, consolidations etc are the main area of the
management. outsourcers are very much cautious in maintaining the
confidentiality of their client. The Service Level Agreement (SLA) is
being implemented to stop hacking or data leakage.

V. Competitiveness -
Performance is the main measurement of how BPO works. If
the BPO works under the given guidelines then continuity is carried
out. Since the outsourcing company is using multilocational
outsourcing operations and then the vendor is to be very cautious
about their contract norms. So the BPO is also hand of gaining
competitive advantages.

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GLOSSARY:

1.Arbitrage- A kind of hedged investment meant to capture slight

differences in price

2.Bandwagon- A popular trend that attracts growing support

3.Business- The activity of providing goods and services involving

financial and commercial and industrial aspects

4.Constraint- a condition that a solution to a problem must satisfy

5.Domain- The content of a particular field of knowledge

6.Escalation- An increase (in seriousness, price, cost, etc.), esp. to

counteract competition or aggression

7.Expertise- Skilfulness by virtue of possessing special knowledge

8.Flexibility- The quality of being adaptable or variable

9.Globalization- Growth to a global or worldwide scale

10.Hacking- Obtain unauthorized accessed to a computer or network

11.Inventory- A detailed list of all the items in stock

12.Litigation- a legal proceeding in a court; a judicial contest to

determine and enforce legal rights

13.Offshoring- The relocation of business activity to a location in

another country with lower costs

14.Optimize- Modify to achieve maximum efficiency in storage

capacity, time or cost

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15.Outsourcing- Obtain goods or services from an outside supplier;
to contract work out

16.Personnel- Group of people willing to obey orders

17.Recruiting- Registering formally as a participant or member

18.Strategy- An elaborate and systematic plan of action

19.Surge- Rise rapidly

20.Synergies- The working together of two things (muscles or drugs

for example) to produce an effect greater than the sum of their
individual effects

21.Telecommunications- systems used in transmitting messages

over a distance electronically

BIBLIOGRAPHY:
1. Introduction Bpo-uploaded by mbag-
http://www.scribd.com/doc/41554754/Introduction-Bpo

2.Functional and Non-Functional Requirements-

http://www.requirementsauthority.com/functional-and-non-functional.html

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