Business Process Outsourcing- Making sense of the sector

The Management Invitation Lecture Series (MILS) invited Mr. Srikanth Tanikella, Vice President Operations, Hewett Packard on 24^th November 2011 for a talk on “Business Process Outsourcing-making sense of the sector”. Before being the Vice President, Operations at HP, Srikanth served as the Head of Knowledge Services Solutions Design at Infosys BPO. He holds a chemical engineering degree from IIT Delhi and is an MBA from IIM Calcutta.

Some facts and figures

Srikanth began with two anecdotes to represent the different aspects that the BPO industry has to contend with. He acquainted the audience with a sample of activities that a BPO or a KPO does for large firms. These activities include equity research, credit research, sales analytics, finance and controllership processes, consumer and business calls, etc. Then, Mr. Tanikella shed some light on the growth story of the sector. He said that the BPO sector has seen tremendous growth over the last 12 years and is estimated to be around $14 billion in FY 2011. It employs 4.5 million people directly or indirectly and in a way, has democratized employment.

Evolution

By 1998, certain internal processes of US had moved out of the country. Medical transcriptions and call centers were dominant in the BPO sector in the initial years (1995-98). Then IT service firms started third party services (Progeon, TCS BPO, HCL BPO, etc.) which accelerated the growth of the sector (2000-2004). Knowledge process services like equity research, analytics, legal process outsourcing followed suit(2004-2009). The next level of outsourcing is Platform based services where process is seen as a service (2009-.

What’s in it for us?

Srikanth gave some interesting insights on the opportunities that this sector presents to the young MBA grads. The sector has seen continuous growth and is here to stay.  As more and more jobs are generated out of the sector, more managers will be required. Srikanth stressed on the fact that KPOs require skills that B-School grads possess. Also, there are plenty of entrepreneurial opportunities in the KPO sector.

Different models of Off-Shoring

Mr. Tanikella explained a few models (third party, liftout and pure captive) of off-shoring. In the third-party model the client chooses a vendor partner and transitions processes to the vendor. In the case of the liftout model, the vendor partner takes over the people and technology assets of the client related to a set of processes. As far as the pure captive model is concerned, the client sets up its own subsidiary offshore so that all assets and staff are owned by the client.

After the lecture, Srikanth answered a few questions from the audience. The lecture presented a different and holistic view of the BPO sector highlighting the various opportunities it offers.

By

Aditya Ghai

MILS

Batch of 2013

Photo Courtesy of:
Mauryanath Das
DoMS Interface
Class of 2013