BPO: The Boon with a Twist

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BPO: Boon With a Twist

XLRI-NITS

BPO: The Boon with a Twist


Table of Contents

THE SUNRISE SECTOR: AN INTRODUCTION        

THE BRIGHT SIDE        

THE NOT SO BRIGHT SIDE: THE HUMAN FACE        

TAKING A MOMENT        

THE ROAD AHEAD        

Role of Companies        

Role of Government        


Executive Summary

The India business process outsourcing (BPO) 'success story' needs to be tempered with a strong dose of caution. The two issues that this paper seeks to raise viz. employees’ welfare and working at the lower end of the value chain, need to be addressed if indeed the BPO phenomenon is to be called a ‘boon’ for India.

The paper discusses the state of the industry in India and the reasons why BPO is the ‘Big Wave’. However, the emphasis of the paper is on another aspect of the story that at best ignored and at worst completely discounted. Some vital questions have been raised like- what is the impact that this newly spawned industry is having on the millions that is now employs?

Also, it is not just about the health of the individual that is of concern here. It is about the entire social, physical and psychological fabric of a nation that is slowly changing. From the perspective of the companies also, the high staff turnover must makes it increasingly expensive for India based operations to maintain and improve their quality of service.

Another dark side of the story is that India is still working on the low end of the value chain of the business-processes. Over time India’s success will depend on moving up the value chain and make the competitiveness non-replicable by other low cost countries.

The paper concludes with some solutions to the above-mentioned problems, concentrating primarily on the employee welfare and moving up the value chain. This requires the concerted efforts of both the industry and the government.


BPO: The Boon with a Twist

“Yesterday upon the stair

I met a man who wasn't there

He wasn't there again today

I wish that man would go away”

The Sunrise Sector: An Introduction

There have been various studies and papers highlighting how the BPO is the best thing to happen to the Indian youth since the Internet. And not without reason. McKinsey and Co. tell us that by 2008 India will have a whooping 5 million people employed in the BPO sector and will be able to boast of additional revenues in excess of  $57 billion. We need this opportunity like never before.

However, there is another aspect of the story that is relatively ignored by both, the industry captains and the popular press alike. This paper looks into that aspect of the BPO industry in India and attempts to question the ‘blind faith’ in the sector. It raises some vital questions like- what is the impact that this newly spawned industry is having on the millions that is now employs? Are the reports that we keep hearing, about over-stressed 22-somethings leaving their jobs and the irritable alienated-from-friends-and-family youngsters true?

It is not just about the health of the individual that is of concern here. The entire social fabric of a nation that is slowly changing as fresh graduates suddenly find themselves with lots of money due to these sunrise sector jobs, but no time or energy to spend it.

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The Bright Side

The major driving force in the BPO sector is money. In his or her first job, an Indian back-office recruit can easily earn between Rs.15, 000 and Rs.20, 000 a month, which may only be a tenth of what their US counterparts earn, but considering that in terms of the World Bank-calculated purchasing-power parity, $1 can buy four times as much in India as it can in the US, Rs.15,000 per month is certainly a lot more than pocket change to an average youngster. Competition, sense of achievement, and financial freedom are the other driving forces, ...

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