1. Business Process Outsourcing is no more a new construct. However, it had become an indispensable constituent in all over the concern universe. Business Process Outsourcing is one-step in front of the ‘Outsourcing construct ‘, and there are many concern procedure activities being identified to outsource in production and other concern sectors.
2. Business Process Outsourcing is popular in most developed and many developing states like China, Philippines and India are few illustrations that this procedure is professionally worked out and acquiring high net incomes to their states. They have besides inter-connected cyberspace of offshore Business Process Outsourcing systems.
3. Soon a company can outsource their concern to BPO sellers, So that they can actively affect in their rule concern operations. BPO supplier or BPO sellers will look
after other affairs of Business Process professionally involved with new engineering and modern equipments and most likely with less cost.
4. Business Process Outsourcing is non much popular in Sri Lanka when compared with other Countries. However, there are few BPO supplying companies executing their
concern procedure activities efficaciously at present. There are more benefits in Sri Lankan to implement Business Process Outsourcing market to originate their concern activities.
5. Companies should right measure the outsourcing activities of the concern procedure and should place the right seller for outsourcing. Therefore, a company can bask the benefits of BPO if non the result would non be positive.
6. Sri Lanka holding entree of educated unemployment of immature work force they can efficaciously use in BPO involved companies. It will assist to work out the unemployment job and will besides open the chance to function in foreign states every bit good.
7. BPO constructs are popularize among the commercial sectors like Bankss, production Centres, other services, and communications bettering and advancing BPO private sector concerns. In add-on, its ‘ benefits should make the clients in Sri Lanka as a whole.
8. The purpose of this service paper is to heighten the cognition on Business Process Outsourcing construct and lucubrate the benefits to present it to Sri Lanka.
Mechanism OF THE BUSINESS PROCESS OUTSOURCING
9. Business Process Outsourcing is a sub-set of outsourcing which involves the catching of the operation and the duties of specific concern processes to a 3rd party service supplier.
10. Business Process Outsourcing to clients. Customers who are involved with Business Process Outsourcing services are expected to hold certain aims and ends by implementing BPO procedure in their concern organisations:
a. Advanced ways of increasing the efficiency and quality of an full concern procedure through values added services.
B. Customer satisfaction.
c. Direct quantifiable impact to cost.
11. Any company can ease Business Process Outsourcing demands from a seller who is established in any portion of the universe. There are some footings used as based on the location of the service supplier ‘s location. Those are:
a. Onshore BPO. In this instance, for illustration a service supplier is located on shore, i.e. if the US based company is outsourcing to another US based company.
b. Near-shore BPO. In this peculiar state of affairs, the service supplier is located near shore is slightly a lower state location in a nearby state. For illustration, if the US based company is unifying outsourcing work to another company-based like Canada, the procedure will be called near shore.
c. Offshore BPO. In this instance, the service supplier is located far off from the company, which the outsourcing work communicating and control is existed utilizing IT or computing machine systems enabled tools over long distance telecom webs. For illustration, when a US based company outsource work to another company based in India or Philippines.
FUNCTIONS IN BUSINESS PROCESS OUTSOURCING
12. Business Process Outsourcing has many maps. All the below mentioned maps could categories under seven chief headers[ 1 ]. Those are:
a. Finance and accounting.
B. Investing and plus direction.
c. Human resources.
f. Real estate direction.
g. Miscellaneous ( energy, service, client service, mailroom, nutrient processing )
13. Soon in the Business Process Outsourcing market, companies had identified plentifulness of maps from the above chief classs that can be outsourced to a BPO company. For illustration ; Finance and accounting as a chief classs, dwelling of General accounting, Payroll, Treasury/cash direction, Accounts collectible and receivable, recognition, Fixed assets, contract care, Collections, Financial systems, Tax and regulative conformities, Budgeting, Securities and exchange committee and regulative coverage.
ADVANTAGES OF BUSINESS PROCESS OUTSOURCING
14. Predominant concern theoretical account of 50 ‘s and 60 ‘s[ 2 ]was immense work topographic points with warehouse used merely to keep the supplies. However, at the present twenty-four hours Business procedure outsourcing introduced to derive productiveness and net income of the concern by giving load of concern procedure activities to a professional seller who provide service in minimal cost and more expeditiously. The concern proprietor can now be after for more concern chances and more net incomes. There are many grounds to alter present concern manners of a company to Business Process Outsourcing The advantages are:
a. Reduce the Operational cost and Capital outgo. By outsourcing to 3rd universe developing states such as India, China, Philippines, and Mexico, companies can work inexpensive labor and substructure installations available in those lands and in bend cut down adult male power, cut down operational costs and capital outgo.
B. Concentration on nucleus concern. Back office operations of a company are extremely boring and need specialized attending. Most of them are critical for the company ‘s advancement. By outsourcing their dorsum office operations concerns can concentrate on their nucleus competences while a specialised 3rd party company is pull offing their dorsum office operations swimmingly.
c. Skilled manpower at lower degrees. Outsourcing supports an organisation to acquire the opportunity to acquire entree to skilled and trained work force highly lower rates that will take to increase the productiveness and salvage costs in large graduated tables to the expected ends and marks.
d. Advanced engineerings at lower rates. Many technological developed seaward finishs gives the companies entree to high tech freshly developed engineerings at really low-cost rates.
e. Tax Benefits. By choosing the right BPO distinguished companies could salvage on high revenue enhancements in bend cut downing their costs.
f. Increased Productivity. By using skilled labors sufficiently to run into the needed work force at lower costs, companies can extremely hike up their productiveness in bend ensuing in better client satisfaction and increased profitableness and promote stableness of the company.
g. Bettering company marks. In a fast bettering economic system, a company needs to supply the best services to its clients in order to retain clients traveling by one topographic point to another and make all this by maintaining the rates low to a certain bound. Outsourcing in this instance can assist the company keep lower rates with better services thereby assisting them to remain abreast of the competition.
h. Benefit of the Labour chance. Business benefits a big derived function in costs of labor between states. For illustration ; Germany, United States of America and United Kingdom have the highest costs of labour worldwide while states like Canada and Australia have lower costs. In states like India, Russia, China, Philippines and South Africa, the cost of labor is well lower and therefore it becomes really attractive to hold work done in these states.
I. Provides better quality. In many instances, really benefitted in quality and bringing through the BPO some of the supplier states have been able to deploy well better quality forces while still supplying the cost benefit.
15. Apart from the above chief advantages, there are some other benefits besides to the Business procedure outsource Company, those are:
a. Streamlines a concern ‘ operations.
B. Gives you entree to professional capablenesss.
c. Shares the hazard.
d. Piece of head that the procedure is in good custodies ( dependability ).
e. Do non hold to worry about continually presenting new engineerings.
f. Improves service quality.
g. Freeze up human resources.
h. Freeze up hard currency flow.
I. Makes the concern more flexible to alter ( i.e. demand ).
DISADVANTAGES BY IMPLEMENTING BUSINESS PROCESS OUTSOURCING
16. Over the past 20 old ages outsourcing as a phenomena developed at a really fast degree. The growing of IT, helping globalisation and thereby bring forthing transnational societies has given rise to state of affairss where cutthroat competition tends to take the better usage. One face of this competition is the craze of research and development, to cut costs and supply better services, which has manipulated itself into outsourcing. The state of affairs seems more baleful every added twenty-four hours as more companies follow suite to the actions of their challengers.
17. Main disadvantages of Business procedure outsourcing are:
a. Major downsides. Outsourcing is seen by many economic experts as a favorable state of affairs but is non ever so. It has many downsides that most of us can non perchance gestate and merely have to go forth it in clip. The present major downside of outsourcing is
the fact that policies of the first universe states like UK and US for outsourcing are nil but hapless. There is no just playing land for companies large or little and the lone option that they are forced to believe is outsource.
B. Servicess at high rates. All of us need services and that excessively at a lower cost. Here the merchandises and services that come cheaper and with higher quality get better gross revenues than those with lower quality. The construct of a just playing land is that an organisation must non be affected much irrespective of the fact whether it wants to outsource or non. This is where the authorities fails and this is where the mistake lies.
c. Impact of off shoring occupations. With outsourcing, the occupations are certain to travel. The 3rd universe states are benefited because of this, but what about the people in the first universe states. They do experience unrest and no confidences are traveling to maintain them from satisfaction about their cherished occupation that was taken off. Here once more the policies are to fault. Offshore outsourcing recoil on communities was bound to go on non because the occupations are being outsourced, but because the manner the occupations are being outsourced offshore today. Peoples are non able to hold on the deductions with a pinch of salt that is overly salty.
d. The outsourcing trap. Outsourcing has many drawbacks that are still non clear and will emerge finally as clip base on ballss. The drawbacks can be in the signifier of a house really increasing its disbursement construction without its cognition, outgrowth of new rivals and loss in the product/service fight. The false image of outsourcing created today are because of sloppy policies has lead to many outsourcing failures taking to heavy losingss. Poor administration, deficiency of communications, cultural misfit, deficiency of cognition and deficiency of good policies are responsible for major companies acquiring their pess burned due to outsourcing. Negative effects of outsourcing offshore are merely bound to increase farther in instance the restrictions on offshore outsourcing are non clarified.
e. Beware of the provider. Outsourcing service suppliers or providers are the 1s that offer services to little and average sized organisations. Large shootings do n’t necessitate
these providers as they set up their ain mercantile establishments. However, the little and average sized. Companies depend wholly on these providers to outsource their procedures. Most of these providers handle many procedures from different organisations and in many instances, may even be supplying services to organisations that are challengers or direct rivals of each other. This gives rise to a state of affairs of the information being leaked. As the provider has complete control over procedures of an organisation, he may leak it to the possible rival who offers better rates. This sort of state of affairs is more than inevitable. This can take to organisations fring its clients wholly to their rivals ; a state of affairs that outsourcing gave rise to. One more state of affairs that can develop is the provider himself acquiring all the inside information can get down his ain services. This gives rise to a newer and stronger strain of rivals who have the ability to join forces with rivals or put up single subdivisions with better services.
f. Lack of coordination. Outsourcing can besides take to the changes of well-established occupation processes that can take to unneeded holds and struggles. Lack of coordination between people holding different cultural backgrounds and different clip zones can besides take to clip losingss.
g. Negative effects on employee. There is a state of affairs today where employees have started fearing occupation losingss. This gives rise to lower motive and thereby worsen in services. After all, who would wish to function an organisation that he feels is traveling to plunder him for all his services. An employee can give the company 100 per centum if and merely if he feels that he is an built-in portion of the organisation and non some silent person to be sacked whenever the company feels like. One more point here is that a despoiled employee could even fall in custodies with rivals and convey to illume the failings of the company.
18. Looking at all these drawbacks, outsourcing truly does non look to be the charming reply for cutting costs. On the contrary outsourcing is manner more complicated and can take to drastic situational developments in the afterward. The authoritiess of India at this point demand to analyse this state of affairs and assist develop a just playing land for organisations taking into consideration the negative effects of outsourcing offshore.
19. Other disadvantages of Business procedure outsourcing.
a. The fright of the service supplier discontinuing to merchandise ( bankruptcy, etc )
B. You may lose control of the procedure.
c. Creates possible decrease.
d. Other companies may besides be utilizing the service supplier. Therefore, in some instances, the best involvements of the service supplier may be diluted with other users.
e. You may lose focal point of the client and dressed ore on the merchandise ( the outsourced procedure )
f. The loss of endowment generated internally.
g. Employees may respond severely to outsourcing and accordingly their quality of work may endure
EVOLUTION AND PROBLEMS OF BUSINESS PROCESS OUTSOURCING
IN SRI LANKA
20. Development. Soon, Sri Lanka is developing in Business Process Outsourcing sector, over 40, 000[ 3 ]of Sri Lankan young person using in this sector. Over 3oo companies are set up operating as about all BPO Fieldss. Specially in Accounting, Computer, Legal service, directors and secretaries, Pay function service, enlisting BPO maps. And those companies have being organized as
21. For the intent of developing the Business Process Outsourcing sector, chief beginning as ‘itpro.lk ‘ have being provide necessary information and links of the Business Process Outsourcing sector to Sri Lanka ( hypertext transfer protocol: //www.itpro.lk/ ). As per their information given, following are the major companies of Business Process Outsourcing service suppliers in Sri Lanka are WNS, Timex BPO, Office Tiger, HSBC Data Processing Limited, Aviva.
22. There are many BPO chances have being identified in Sri Lanka and competitory development is accomplishing in present. For that, several industry organisations are grouped and shoulder the duty of enhance the capacity of BPO sector in Sri Lanka. Those Industry associations are:
a. Sri Lanka Association for Software and Service Companies ( SLASSCOM ) is act as accelerator of growing for the Sri Lankan IT and BPO industry by facilitation trade and concern, programe of instruction and employment, encouragement of research and invention, and by back uping the creative activity of a progressive national policy model.
B. The Association of Computer Training Organization ( ACTOS ) ; purpose is ICT instruction in Sri Lanka.
c. Software Exporters Association ( SEP ) ; purpose is to package exports in Sri Lanka.
d. Sri Lanka Association for Software Industry ( SLASI ) ; association of local package companies with the vision to develop chances domestic and international market for the benefit of its members.
e. Sri Lankan Computer Venders Association ( SLCVA ) ; association of computing machine hardware sellers with the purpose to advance, promote, Foster, develop, co-ordinate and protect the involvements of companies enraged in the concern of fabrication, developing or supplying service about computing machine hardware and related equipment.
f. IT Enabled Service Association ( ITESA ) ; purpose is to association of BPO organisations with the purpose to advance the BPO industry in Sri Lanka.
23. Problems. When sing the Business Process Outsourcing industry in Sri Lanka, there can be identified some negative effects to come on the construct, those are:
a. Do n’t hold skilled work force to use in Business Process Outsourcing sector. Particularly at the call centre field. Main trouble that identified was, limited of holding English speaking-writing work force. Even among graduated community missing this ability, which is really indispensable to run most maps of Business Process Outsourcing.
b. Sri Lanka does non hold adequate installations to develop work force to ease in Business Process Outsourcing field. Every twelvemonth more than 125,000 of pupils are qualify to come in the Universities ; but there are merely 16,000 of pupil merely cater to Universities.
c. Sri Lanka does non hold pool of skilled labor to carry through the demand of Business Process Outsourcing present demand.
d. IT based Business Process Outsourcing is increasing in singular rate but, some other facets of BPO is non high demand in Sri Lankan market.
BENEFITS TO SRI LANK FROM INTRODUCING OF
BUSINESS PROCESS OUTSOURCING
24. When introduce the Business Process Outsourcing construct to Sri Lanka, we can turn up the benefits in two ways. That is the benefits which acquiring to Sri Lankan concern community one time they adopt Business Process Outsourcing to their concern operations. And in other manner ; how do acquire benefited Sri Lankan work force by come ining to Business Process Outsourcing occupation chances. In this service paper, the benefits of Business Process Outsourcing are listed in a general term as follows:
a. When introduce Business Process Outsourcing to the concerns in Sri Lanka, it will cut down the Operational cost and Capital outgo. Management of the company cans concentration on nucleus maps of the concern and able to fulfill the clients.
B. Business enables to acquire choice work force at lover degree. In add-on, can be use advanced engineerings at lover monetary value.
c. Tax benefits, Beat competition and company can supply better quality merchandises.
d. Since Sri Lankan labor costs are relatively low, when comparison with the western and other Asiatic states, Outsourced concern procedure would be less cost and it will take more profitable and gain more net incomes.
e. When set up outsourcing seller companies at Sri Lanka, it will positively impact to the unemployment job.specially in unemployment at the educated category.
f. Sri Lanka as a whole can run offshore outsourcing and earn foreign grosss. Gain sophisticated engineerings to the state.
25. Business Processing Outsourcing is popular concern mechanism that adopt in fabrication or other commercial organisation, which outsource its concern procedure maps to third party seller for smooth map of its concern operations.
26. In that, company can efficaciously go to chief operations through client satisfactions earn more net incomes. At the same clip when is implementing at the Sri Lanka, it can gain more foreign income while solve the job of unemployment.
27. To develop the construct of Business Process Outsourcing in Sri Lanka:
a. Implement sound awareness Program Island broad to advance Business Processing Outsourcing construct at Sri Lanka. Get downing from school degree.
B. Improve English and IT survey bundles or include to syllabus to fix future work force to do professional and knowing. In add-on, to do the BPO modesty for future BPO industry.
c. Government should affect in developing BPO. And should give inadequate installations to develop Business Process Outsourcing sector in Sri Lanka.