Supply Chain: BPO (Business Process Outsourcing)
Business process outsourcing or BPO in the supply chain is a business practice in which one organization outsources its processes through another company for its own business to operate successfully.
This COVID crisis is speeding new customer patterns, new ways for the companies to meet the customer’s needs, and new ways to execute the internal processes.
When we are talking about processes, the entire Supply Chain is involved and will be transformed.
Traditionally, organizations engage in business process outsourcing for two main areas of work: back-office functions as IT, HR, QA, and payroll, and front-office functions like customer services, sales, and supply chain processes.
Which are the Supply Chain Processes that can be outsourced? Let’s make an example list of some of them:
- Demand and inventory planning (SCM)
- Warehouse strategic and operational management
- Inventory cycle counting
- Key performance indicators (KPIs) management
- Advanced Supply Chain Analytics
- Dynamic routing
- Slotting
Under today’s pressure to contain costs and produce results, you must transform rather than simply improve your operation. That means adopting the methods, technologies, and processes that will make your organization “best in class.”
Supply chain management business process outsourcing (BPO) allows organizations to contract with third parties a specific set of operational tasks and processes. It taps cloud computing and an assortment of digital tools and technologies, including analytics, to facilitate these outsourced processes.
And definitely, with the chaotic scenarios that this COVID crisis is showing us for the near future, tackling supply chain management (SCM) with outsourcing specialized is the right solution to be considered.
Analysis has to be done by the organizations, and the decisions have to be based on strategic and tangible factors, rather than only on costs. And for sure, track service levels through a KPI-based approach.
Finally, Supply chain management business process outsourcing is an increasingly valued alternative for managing business operations in the organization, and specifically in the medium-size and small companies can provide a winning path in agility and flexibility that typically lead to cost savings and revenue gains.
Indian BPO market to hit $8.8 bn by 2025 amid liberalised regime
In November 2020, the government had simplified BPO and ITES guidelines to ease the compliance burden on service providers and establish the ‘Work-From-Home’ and ‘Work-From-Anywhere’ framework.
As India reopens, the enterprise spending on business process outsourcing (BPO) services in India is set to grow at a compound annual growth rate (CAGR) of 5.8 per cent to reach $8.8 billion by 2025, driven by huge push for outsourcing knowledge-based and vertical-specific processes, a new report showed on Wednesday.
According to GlobalData, a leading data and analytics company, the BPO market in India is now supported by the country’s efforts to liberalise regulatory guidelines for the BPO industry in recent times to ward off competition from countries like the Philippines, Malaysia, Mexico, and Canada.
“The country’s expertise in providing knowledge-based and vertical specific services, particularly in areas such as healthcare, life sciences, banking, insurance, legal processing, risk management, financial research, research and analytics, and digital marketing, are expected to drive growth during the forecast period,” GlobalData senior technology analyst Pragyan Tarasia said.
In June this year, the government liberalised guidelines for voice-based BPO firms (classified under other service providers (OSP)) by removing distinction between domestic and international service centres and allowing interconnectivity between all types of OSP centres.
Besides, providing ease of work for their employees who relocated to remote areas after the pandemic and enabling them to work from anywhere will also help BPO firms to improve scale and speed of services.
In November 2020, the government had simplified BPO and ITES guidelines to ease the compliance burden on service providers and establish the ‘Work-From-Home’ and ‘Work-From-Anywhere’ framework.
“The new guidelines will go a long way in enabling ease of doing business for the industry and establishing the country as the most preferred hub for BPO services in the world,” said Tarasia.
Enterprise spending on finance and accounting BPO segment, on the other hand, will grow at a fastest CAGR 9.6 per cent during the forecast period.
The large enterprise segment (1,000+ employees) will account for largest share of the total BPO spending in India through the forecast period.
“The combined spending from micro (1-50 employees), and small and medium enterprises (51-1,000 employees), on the other hand, will increase at a CAGR of 5.8 per cent over the forecast period,” said Tarasia.
Centre allows BPOs with common telecom resources serve worldwide
India’s IT-BPM industry stands at $37.6 billion (2019-20)
The central government on Wednesday removed the distinction between domestic and international OSPs (Other Service Providers) allowing BPO centres with common telecom resources to serve customers located worldwide including in India.
Addressing a press conference, the Union Minister for Electronics and Information Technology Ravi Shankar Prasad said, “We have issued a guideline today that is very extensively liberalising the other service providers’ guidelines. The guideline is revolutionary in nature that will make India a very favourable destination for the expansion of voice-related BPO centres. These guidelines are designed to put India as a very central and serious player in the entire international BPO and voice-related industry.”
Prasad informed that India’s BPO industry is one of the largest in the world. Today India’s IT-BPM industry stands at USD 37.6 billion (2019-20), which is Rs 2.8 lakh crores approximately, giving job opportunities to lakhs of youths in the country. Further, it has a potential for
double-digit growth reaching up to USD 55.5 billion that is Rs 3.9 lakh crores by 2025.
“The distinction between Domestic and International OSPs has been removed. A BPO centre with common Telecom resources will now be able to serve customers located worldwide including in India. EPABX (Electronic Private Automatic Branch Exchange) of the OSP can be located anywhere in the world. OSPs apart from utilising EPABX services of the Telecom Service Providers can also locate their EPABX at Third Party Data Centres in India,” stated the union minister.
With the removal of the distinction between domestic and international OSP centres, the interconnectivity between all types of OSP centres is now permitted.
He further said, “Remote Agents of OSP can now connect directly with the Centralised EPABX/ EPABX of the OSP/ EPABX of the customer using any technology including broadband over wireline/ wireless. There is now no restriction for data interconnectivity between any OSP centres of the same company or group company or any unrelated company.”
Prasad emphasised that DoT has already exempted Data-Based Services from the OSP regulations. In addition, the regulations exempted OSPs from the requirement of any registration. Also, no bank guarantees were to be furnished. Work from home and work from anywhere was also permitted.
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