Nov 072012
 

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Let us continue discussing which Outsourcing company in India has most valuable employees.

In last post we identified 3 companies

  • EXL
  • Genpact
  • WNS
as they are 3 biggest players in BPO space from India, majority of headcount is in India but all of them are listed in US, so their numbers are avaialble to anybody on their website and on the respective stock exchange.

One very interesting fact that emerges after comparing the revenue of the top 3 players is that the average revenue per employee for Genpact is around 35K US per annum that is far ahead of EXL and WNS. Om quick reverse calculation the average revenue per employee per hour for Genpact is $16.75 taking in consideration 22 working days and 8 hours a day month. The revenue per employee of WNS and EXL pales at 8.33 and 10.62 respectively.

Also point to note is that WNS is the only company in last quarter where income growth is slipping. While EXL and Genpact are growing at appx 30% per annum WNS had shown an income growth of negative 30%!

Maximum revenue per employee for BPO companies

Highest Dollars per employee for Top BPO companies

No wonder the investors in WNS are looking to sell heir stake. The other challenge that WNS is facing is that it has highest attrition rate of 33% as per their financial disclosures. Which basically means every third person in the company will probably leave within a year. That is finding a replacement for almost 8000 employees, that itself is a big drain on the resources. No wonder there margin is the lowest in the group at 3.46%. ( The FD rates now days are close to 7% depending on tenure).  The challenge with such thin margins is that with even a minor exchange rate fluctuation the company can go into losses.

What also appears from the  highest revenue per employee from Genpact is that the company has added more complex processes and is moving in a direction where it is able to charge a premium for its services compared to a few years ago. We think all the investment that Genpact is known for in making its employees in form of training seems to be paying well now.

The only saving grace here is that Convergys one of the largest US listed outsourcing company has margins of 2.21%, but please remember Convergys still does not have 75% of its workforce in India  compared to the Indian players.

Well we  hope this post has been able to help you understand how employees add value to the company and how companies can add long-term value to their top line by investing in their employees, and attrition remains the joker in the pack that can tilt the scale from profits to losses.

Feel free to share this post with your friends and leave some comments. If  you would like to contribute to CafeBpO please use the contact CafeBpO form to get in touch with us.

Coming soon: A post on Captives or GICs as NASSCOM calls them.

 November 7, 2012  Posted by at 3:21 PM Business of BpO, Case Study Tagged with: , , ,  5 Responses »
Oct 252012
 
 

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Let us understand what is  Knowledge Process Outsourcing or KPO

In this post we will talk about some specific examples of what can be considered Knowledge process outsourcing or KPO. We will take example of a very common line of business that many companies work in India for US clients.

This is the business of US mortgage, ( yes the same business that started the financial meltdown a few years ago).

So if you are a mortgage company in US you will give following processes to a company or companies in India.

  1.  Call center work to resolve customer queries
  2. Cal center work to collect money from delinquent accounts
  3. Data entry for new loans that the company is trying to sell in market
  4. Checking on all the documents before closing is done.
  5. Follow up with clients either though phone or email in case some documents are missing our outdated.

But none of these works can be called KPO, because the employee in India or even in US is not taking any major decision she is just following  a set of guidelines and takes a decision based on certain parameters that have been given to her as part of process documentation and knowledge base. The moment something is out of this knowledge base or an exception happens she is clearly instructed to speak to the supervisor, and then the supervisor either will take the decision or get back to the client to take a final call.

That friends is the major distinction between a BPO or the so called KPO where the employees are empowered to take more complex decisions and also financial authority is provided to the employee to take a call. A good example of a KPO business in a Mortgage outsourcing company will be the underwriting part. As an underwriter the employee performs following activities for every application received by her

  • Analyse the cash flow of the borrower both income an expenses and come with a free cash flow that will be used for repayments
  • Real value of the property as compared to what the borrower and the seller are claiming, she will use an appraisal report and other information to reach the same (e.g. last sale price in same locality)
  • Any negative credit history of the borrower as shown in the credit report received from the credit bureaus.

Based on these broad parameters she will decide if she will approve the loan or deny the same. Now here the employee is taking decision that will have financial impact on the client as well there are some compliance issues that will need to be taken care of.  Now please note that the employee will not have an unlimited authority, and beyond a certain $$$ value will need to approach a second set of eyes either in India or in US to take a final call.

I hope we have been able to explain with this example the broad difference between KPO and BPO based on one of the parameters that is decision-making authority. We will discuss some other parameters in future posts.

But what we should remember is from a client point of view they are giving you a part of there business and do not care what you call yourself, BPO, KPO or any other acronym.

Team Cafe BPO

 October 25, 2012  Posted by at 11:51 PM Business of BpO Tagged with: , ,  Comments Off on So What the Hell is Knowledge process outsourcing or KPO-II
Oct 222012
 

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So after looking at what some of the complications for a BPO jobs are let us try to understand what are the basic requirements for working in a BPO or call centre are. Please note that when we say working we mean looking for a long term career in a BPO company. This post is not for somebody who is looking for a filler job till he gets a better opportunity.

A typical BPO employee should have following qualities and qualifications

  • First and foremost is willingness to work in any shift including night shit, Australian shift, UK shift, India shift and anything in between.
  • Minimum a graduate though a higher degree will not hurt and will help in getting a more complicated process where the salary may be higher.
  • Good command  over both spoken and written English language.
  • Basic understanding of principles of finance in case you are joining a BFSI BPO or a Banking, Financial Services, Insurance BPO company.
  • Basic understanding of computers and basic applications like Word, Power point, MS Excel,  outlook etc. as most of these are required in the day to day working in a BPO.
  • Willingness to learn new process and applications as most of the  processes will have its own nuances and specific applications that no training company in the world can teach you.
  • You should be good at both written and oral communication this is irrespective of the fact whether  you will be working in a voice process or a back office process at some stage you will be required to communicate with customers or with your internal colleagues.

So friends these are are some of the qualities and qualifications that you will need to join and succeed in a BPO company. They offer a lot of career opportunities but one must remember that the competition is also very tough and the very best survive in this business too just like any other industry which is highly competitive.  We will be analysing some of the points given above in more detail in the coming posts. Keep coming back for more posts on life, career and business of BPO

Team Cafe BPO

 October 22, 2012  Posted by at 11:28 PM Career In a BPO Tagged with: , , ,  Comments Off on Are You Cut Out For A BPO Job-III
Oct 212012
 

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In the last post we talked about why it is a myth that BPO job is an easy job. Part of the reason to believe that BPO jobs are easy is as a lot of companies have expanded at a very rapid pace in last 10 years, leading to an explosion in the growth of jobs in the BPO  field. But as we analysed it is not an easy thing to perform in a BPO and one need to have different skills. This post we will look into why the back office jobs are also not as easy as they are made out to be.

Typically the BPO jobs are divided into 2 categories at 30,000 ft. level.

  • Voice jobs
  • Non voice jobs

This is a very high level division of the BPO jobs, and of these the non voice jobs are typically considered to be easy jobs by most people.  We would like to break this myth, as whether a job is easy or tough has got nothing to do with voice or non voice. In our opinion it is based on the  decision-making authority vested in the person performing the job that should be decide if it is an easy job or a tough job. We will analyse these jobs later in a future post. Today let us analyse one of the jobs that is considered to be easiest in the BPO industry namely data entry.

Data entry process is considered to the most easiest of the jobs in the BPO industry. A typical data entry operator is supposed to Key in the information she sees on a scanned form into a software. Sounds easy? Sure let us look at it at a more granular level.

You have a scanned form in writing from a loan applicant who has scribbled his application on a paper with a hundred cuts, over writing, entries into wrong field etc. you get the gist. Now the Data Entry Operator is supposed to not only understand what the applicant has written, decipher the cuttings and over writing, and also find out if the written information is in the right field. All this they have to do when typing at a speed of 45 wpm with an accuracy of 99% or above. I hope you get it.

So our point is not that you can not do it, thousands of people in India do it day in and day out but it requires specialized training, discipline and dedication. On day one no body who joins a BPO company is geared up for all this. Due to which all BPO companies maintain training department who work round the clock to train the new hires into the basics of a process before they are handed over to the operations team for more in-depth training.

The point we are trying to make here is that while BPO field is full of opportunity it is not a cake walk and it is a tough job which requires specialized training and discipline. If you are geared for the rigours of training and hard work and follow the process nuances every single day only then come and join the BPO business. Please so not think about getting a BPO job considering it to be easy money. Trust us it is not easy money it is a lot of hard work, as we will demonstrate in future posts.

Team Cafe BPO

 October 21, 2012  Posted by at 10:57 PM Career In a BPO Tagged with: , ,  Comments Off on Are You Cut Out For BPO Jobs-II