Business Process Outsourcing Case Study

Section I
Introduction

“Do what you can do the best and outsource the rest.”
- Tom Peters

During the 1980s, nobody would have imagined that a day would come when process involving direct customer contact could be performed from remote locations, thousands of miles away. The Outsourcing Industry has been substantially researched in the past decade. Outsourcing is not a straightforward or unidirectional phenomenon; however, it can be of different types. The services which are commonly outsourced by a company are: Business Process Outsourcing (BPO); Legal Process Outsourcing (LPO); Knowledge Process Outsourcing (KPO); and Analysis Process Outsourcing (APO). Outsourcing best appeared in IT industry in the 1980s, and this was the time when firms

In the knowledge economy, there’s knowledge intensity where efficient production depends on knowledge, data or information and know-how. KPO accord value to the client via domain expertise instead of process expertise. The KPO industry is formed around the requirement for business intelligence and expertise and is anticipated to grow from a $1.2 billion industry (at a compounded annual growth rate of 46%).As per the reports of global sourcing the knowledge process outsourcing is forecasted to reach $17 billion by 2010 out of which India’s share would be $12 billion, as predicted by Evalueserve in 2005. Similarly, the National Association of Software and Service Companies of India(NASSCOM), speculated the KPO sector in India to attain $15.5billion by 2010 (Sathe, 2006). Other countries such as Mexico, Russia, China, and Israel are also expected to become large players in this growing market (Larkey, 2006).
Knowledge Process Outsourcing (KPO) suitably allow the organization, whose growth is jammed, to outsource their all core or non-core work of the organization or firm from ideal locations where the talent is skilled and labor cost are cheap. Information Technology (IT) is a key driver of improving KPO service levels and reducing costs and thus, IT sectors are the best examples of KPO. Businesses are searching for a racially balanced solution approach and process standardization via

KPO delivers high value to the organizations by providing them business expertise instead of just process expertise. It involves offshoring of knowledge intensive business processes that entail specialized domain expertise.
The need for KPO is not restricted to only IT-enabled services sectors, however it needs knowledge from other domains too. Some of the few examples are legal processes, intellectual property and patent related services, legal research, CAD/CAM applications, clinical research, Web development application, engineering services, and business research and analytics, publishing and market research for KPO.
In present competitive environment, focus is to target core specialization and core-competency areas and outsource the rest of the activities. Many firms and organizations have come to understand the importance of outsourcing. By outsourcing non-core activities, it’s just not only the costs are minimized and efficiencies improved but also the total business improves, reason the focus shifts to the key growth areas of the business