INTERNATIONAL SCHOOL OF BUSINESS AND RESEARCH,

BANGALORE
(LC code- 02884)
“To study and analysis of Indian BPO(Business Process Outsourcing)
Industry and to promote corporate gifts in BPO’s with reference to Company
Store.
BY
MANASWI PURWAR
(520792238)

A project report submitted for the partial fulfillment of the requirements for
the degree of Master of Business Administration of Sikkim Manipal
University, India.

Sikkim-Manipal University of Health, Medical and Technological Sciences

Distance education wing
Syndicate House

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 Manipal

CHAPTER 1.
INTRODUCTION

INTRODUCTION

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 INTRODUCTION TO BPO INDUSTRY

Outsourcing began in the early eighties when organizations started delegating their
non-core functions to an external organization that was specialized in providing a
particular service, function or product. In outsourcing, the external organization
would take on the management of the outsourced function. In outsourcing, the
outsourcer and the outsourcing partner have a greater relationship when compared
to the relationship between a buyer and a seller. In outsourcing, the outsourcer
trusts the outsourcing partner with vital information. Outsourcing is no longer
confined to the outsourcing of IT services. Outsourcers in the US and UK now
outsource financial services, engineering services, creative services, data entry
services and much more.
Most organizations are opting to outsource because outsourcing enables
organizations to access intellectual capital, focus on core competencies, shorten the
delivery cycle time and reduce costs significantly. Organizations feel outsourcing
is an effective business strategy to help improve their business.

BUSINESS PROCESS OUTSOURCING –

“Business Process Outsourcing” is the fastest-growing segment of outsourcing
market – A industry which we all “Love to hate and hate to love”.
Business process outsourcing is a type of outsourcing that involves the contracting
of the operations and the responsibilities of a specific business processes or
functions to a third party service provider.
BPO is typically categorized in to back-office outsourcing which includes internal
business functions i.e. human resources, or finance and accounting and front office
outsourcing which includes customer related services i.e. call center services.
Business process outsourcing (BPO) is the leveraging of technology vendors to
provide and manage a company's critical and/or non-critical enterprise
applications. Through the business transformation process of service-oriented
transformation, which leverages the technologies and standards of service-oriented
architecture, companies can increasingly leverage third party companies that act as
business service providers. Business process outsourcing can use off-shore
resources, but is not required.
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Business process outsourcing (BPO) is the act of giving a third-party the
responsibility of running what would otherwise be an internal system or service
conducted in-house.
Outsourcing system allows companies to contract for services that are not within
the scope of their expertise, so that they can focus their time, money and energy on
their core competencies instead of wasting valuable resources trying to gain
Understanding of areas that are somebody else's expertise.
BPO is seen as outsourcing that involves IT supported processes but that doesn’t
involve discontinuities between the IT and the rest of the business process.
BPO has evolved far from these IT-specific roots and now encompasses nearly
every business process.To be sure, the implementation of a BPO initiative will
always involve a technology component, but for that matter so does
implementation of a benefits administration office at the local beer distributor. The
point is, nearly every modern business innovationcomprises both a technical and a
social component. Decision making, strategy setting, service delivery, and virtually
every other businessactivity are now sociotechnical in nature, involving humans
interfacing with technical systems. BPO is like that.
Fundamentally, then, BPO is a socio-technical business innovation that provides a
rich new source of competitive advantage. By socio-technical we mean that BPO
requires skillful management of people and technology (hardware and
software).The manager who initiates a BPO strategy must find effective ways to
introduce people to technology and vice-versa. If left solely in the hands of
technical specialists, a BPO initiative is likely to fail for lack of paying attention to
the soft issues of human relationships, change management, and organizational
culture. If left solely in the hands of nontechnical managers, it is likely to fail for
unrealistic expectations about the potential and limitations of the enabling
technologies.

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The reasons behind outsourcing the processes are as follows –
➢ Cost Cutting - Process outsourcing has been used for times immemorial to
enhance shareholder value by controlling costs and avoiding capital
expenditures associated with purchase of new systems and upgradation.
These savings can then be channeled in to the core areas of the company. It
has been indicated that for every dollar invested in BPO across India, the
value derived by the US economy is between $ 12-14.

➢ Improving efficiency and productivity – Conventionally, executives

spends their 80% of their time in management of details and only 20% on
formulating strategies. But the situation is remarkably different when the
business process is outsourced. This saved time helps them tremendously to
explore new revenues areas, accelerate other projects, and focus on their
customers. Business process outsourcing has another big advantage which
leads to increase in capabilities of the employees and the company. This will
results in to productivity improvements. Companies that outsource their
business processes are often able to capture new efficiencies and in the
process improve upon their productivity. They are in a better position to
reallocate their resources to other important projects.

➢ Focus on Core competencies - The current business scenario worldwide

dictates that a successful company must have a great core process to just to
stay in the game. Outsourcing is the only way a company can invest its time
and money on these vital core processes and at the same time get better
performance out of non-core functions. To remain competitive in the global
economy, you need to concentrate on what made you successful in the first
place – your core business. You can't afford to expend valuable time and
energy managing transactions and noncore processes that could be handled
by other specialists.
By outsourcing non-core processes, companies can concentrate on
increasing their sales and market share, develop new products; spread out
into new markets and increase customer service and satisfactions. The most
important factor behind the growth in the BPO market world wide today is
an increase in the number of enterprises that are reviewing their internal
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 operations in an attempt to fully understand their true core competencies. In
the process they are able to focus more on their core competencies. Business
Process Outsourcing gives more freedom to the management to focus more
time, energy, and resources on building the company's core businesses. It is
because the BPOs assume full responsibility for managing the day-to-day
back-office operations.

➢ Outside expertise- Company is saved from the hassles of recruiting and

training personnel. BPOs ensure that experts from another company provide
the needed guidance and skills, that too at very low wages. Companies that
want to grow internationally must continuously invest in infrastructure and
find talent around the world and this is possible only trough business process
outsourcing. Many outsourcing providers are already established globally
and help in increasing the capabilities of the companies that are outsourcing
their work to these BPOs.

BPO BUSINESS MODELS

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 Different models have been used for conducting business in BPO. The regular
outsourcing models of on-shoring, near-shoring and offshoring are seen in BPO as
well. TPI, a sourcing advisory, has observed that in addition to on-shoring, near-
shoring and offshoring, BPO operations are also conducted through the following
three business models :
➢ Transactional BPO: Transactional BPO handles one aspect of a process
only. The customer has to carry out a significant part of the process in-house
and hence the customer owns the risk of the process. Also, outsourcing
many aspects of the process in a transactional mode leads to complex
fragmentation which can pose as a threat to productive delivery.

➢ Niche BPO: A niche BPO carries out 3-4 aspects of a process. A niche BPO,
which also makes certain investments in the customer's process, aims at
improving the efficiency of the process. The vendor in a niche BPO works in
close coordination with the buyer, sometimes seeking the services of the
customer's employees. Both the vendor and the buyer share the risk of the
process.

➢ Comprehensive BPO: A comprehensive BPO handles both transactional

and administrative tasks in a process and takes 70 percent responsibility of
the output. The vendor purchases the buyer's assets and also hires most of its
employees. Comprehensive BPO has bulk deals lasting for 7-10 years.

Number of Processes Transactional Niche Comprehensive

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Number of processes Transactions only for 2-4 Process 10 + Process in a
1 process function.

Invest in client assets No, migrate Yes- but modest dollars Yes-significant
everything to their and personnel take on. dollars and
system employee take on.

Hire clients people No Yes-but usually<50 Yes-but

usually>100 and
often in 1000’s.

Locations Provider’s location Mixed, people at both Mixed, people at

client and provider’s both client and
location provider’s
location.

Geographic Spread Multi country Domestic >80% with Global

some international

Contract duration 1-2 years 3-5 Years 7-10 years

Contract value / Year $1-5 million/Yr. 5-10 million/Yr $50-100 Mn/Yr.
Business model Offload transactions Make processes more Make functions
from client. efficient more efficient

Accountability For the transaction For Process outcomes For cost savings.
processing

Risk Holder 90% client, 10% 50% client, 50% 30% client, 70%
provider provider provider

Metrics Pre transaction Based on outcome Based on outcome

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 ADVANTAGES AND DISADVANTAGES OF OUTSOURCING
By gaining insight about both the good and bad of outsourcing, organizations can
decide if outsourcing is right for them. Most organization jump headlong into
outsourcing, without actually finding out if outsourcing is good for their business.
Before outsourcing, ensure that you are aware about the pros and cons of
outsourcing.
The advantages and disadvantages of outsourcing can help your organization
decide if outsourcing is right for your business.
ADVANTAGES –
➢ Outsourcing your non-core activities will give you more time to concentrate
on your core business processes .
➢ Offshoring can give you access to professional, expert and high-quality
services.
➢ With outsourcing your organization can experience increased efficiency and
productivity in non-core business processes .
➢ Outsourcing can help you streamline your business operations .
➢ Offshore outsourcing can help you save on time, effort, manpower,
operating costs and training costs amongst others .
➢ Outsourcing can make your organization more flexible to change .
➢ You can experience an increased control of your business with outsourcing
➢ Your organization can save on investing in the latest technology, software
and infrastructure as your outsourcing partner would be investing in these .
➢ Outsourcing can give you assurance that your business processes are being
carried out efficiently, proficiently and within a fast turnaround time .
➢ Offshoring can help your organization save on capital expenditures.
➢ By outsourcing, your company can save on management problems as your
offshore partner will be managing the team who does your work .
➢ By outsourcing, you can cater to the new and challenging demands of your
customers .
➢ Outsourcing can help your organization to free up its cash flow.
➢ Sharing your business risks is possible with outsourcing .
➢ Outsourcing can give your business a competitive advantage as you will be
able to increase productivity in all the areas of your business .
➢ Outsourcing can help your organization to cut is operational costs to more
than half .

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DISADVANTAGES –
The disadvantages of outsourcing give organizations an opportunity to think about
what they are stepping into. However the disadvantages of outsourcing are less
than the advantages of offshore outsourcing.
➢ At times, it is more cost-effective to conduct a particular business process,
rather than outsourcing it .
➢ While outsourcing services such as payroll processing services and tax
preparation services, your outsourcing provider will be able to see your
company’s confidential information and hence there is a threat to security
and confidentiality in outsourcing .
➢ When you begin to outsource your business processes, you might find it
difficult to manage the offshore provider when compared to managing
processes within your organization .
➢ Offshoring can create potential redundancies for your organization .
➢ In case, your offshore service provider becomes bankrupt or goes out of
business, your organization will have to immediately move your business
processes in-house or find another outsourcing provider .
➢ The employees in your organization might not like the idea of you
outsourcing your processes and they might express lack of interest or lack
of quality at work .
➢ Your outsourcing provider might not be only providing services for your
organization. Since your provider might be catering to the needs of several
companies, there might be not be complete devotion to you and your
company .
➢ By outsourcing, you might forget to cater to the needs of your valuable
customers as your focus will be on the business process that is outsourced .
➢ In outsourcing, you may lose your control over the process that is
outsourced .
➢ Outsourcing, though cost-effective, might have hidden costs, such as the
legal costs incurred while signing a contract between companies. You might
also have to spend a lot of time and effort in getting the contract signed .
➢ With outsourcing, your organization might suffer from a lack of customer
focus .
➢ There can be several disadvantages in outsourcing, such as, renewing
contracts, misunderstanding of the contract, lack of communication, poor
quality and delayed services amongst others.

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 DIFFERERNT TYPES OF SERVICES OFFERED BY BPO’s

The services offered by the BPO’s are to serve the customer needs and offer them
a satisfaction level. Providing better services is the key to retain the customers and
to strengthen the client base.
In developing country BPO companies offered various services to
their clients like e-Accounting, Financial Analysis, Software
development, Technical assistance, data entry etc…..
Business process outsourcing (BPO) services enable you to redefine your
operational priorities, adapt and perform better. BPO addresses efficiency and
effectiveness of operations, and provides greater flexibility to adapt to the
changing times.
1. Customer Support Services
Customer service offerings create a virtual customer service center to
manage customer concerns and queries through multiple channels including
voice, e-mail and chat on a 24/7 and 365 days basis.
Service Example: Customers calling to check on their order status,
customers calling to check for information on products and services,
customers calling to verify their account status, customers calling to check
their reservation status etc.
2. Technical Support Services
Technical support offerings include round-the-clock technical support and
problem resolution for OEM customers and computer hardware, software,
peripherals and Internet infrastructure manufacturing companies. These
include installation and product support, up & running support,
troubleshooting and Usage support.
Service Example: Customers calling to resolve a problem with their home
PC, customers calling to understand how to dial up to their ISP, customers
calling with a problem with their software or hardware.

3. Telemarketing Services
Telesales and telemarketing outsourcing services target interaction with
potential customers for 'prospecting' like either for generating interest in
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 products and services, or to up-sell / promote and cross sell to
an existing customer base or to complete the sales process online.
Service Example: Outbound calling to sell wireless services for a telecom
provider, outbound calling to retail households to sell leisure holidays,
outbound calling to existing customers to sell a new rate card for a mobile
service provider or outbound calling to sell credit or debit cards etc.
4. Employee IT Help-desk Services
Employee IT help-desk services provide technical problem resolution and
support for corporate employees.
Service Example: of this service include level 1 and 2 multi-channel support
and system problem resolutions related to desktop, notebooks, OS,
connectivity etc., office productivity tools support including browsers and
mail, new service requests, IT operational issues, product usage queries,
routing specific requests to designated contacts and remote diagnostics etc.
5. Insurance Processing
Insurance processing services provide specialized solutions to the insurance
sector and support critical business processes applicable to the industry right
from new business acquisition to policy maintenance to claims processing.
Service Example:
New Business / Promotion:
Inbound/outbound sales, Initial Setup, Case Management, Underwriting,
Risk assessment, Policy issuance etc.
Policy Maintenance / Management:
Record Changes like Name, Beneficiary, Nominee, Address; Collateral
verification, Surrender Audits Accounts Receivable, Accounting, Claim
Overpayment, Customer care service via voice/email etc.
6. Data Entry Services / Data Processing Services
Service Example:
➢ Data entry from Paper/Books with highest accuracy and fast turn
around time (TAT)
➢ Data entry from Image file in any format
➢ Business Transaction Data entry like sales / purchase / payroll.
➢ Data entry of E-Books / Electronic Books
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 ➢ Data Entry : Yellow Pages.
➢ Data Entry and compilation from Web site
➢ Data Capture / Collection
➢ Business Card Data Entry into any Format .
➢ Data Entry from hardcopy/Printed Material into text or required
format.
➢ Data Entry into Software Program and application
➢ Receipt and Bill Data Entry
➢ Catalog Data Entry.
➢ Data Entry for Mailing List/Mailing Label.
➢ Copy, Paste, Editing, Sorting, Indexing Data into required format etc.

7. Data Conversion Services

Service Example:
➢ Conversion of data across various databases on different platforms.
➢ Data Conversion via Input / Output for various media.
➢ Data Conversion for databases, word processors, spreadsheets, and
many other standard and custom-made software packages as per
requirement.
➢ Conversion from Page maker to PDF format.
➢ Conversion from Ms-Word to HTML format
➢ Conversion from Text to Word Perfect.
➢ Conversion from Text to Word to HTML and Acrobat .
➢ Convert Raw Data into required MS Office formats.
➢ Text to PDF and PDF to Word / Text / Doc
➢ Data Compilation in PDF from Several Sources.
➢ E-Book Conversion etc.

8. Book Keeping and Accounting Services

Service Example:

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 ➢ General Ledger
➢ Accounts Receivables and Accounts Payable
➢ Financial Statements
➢ Bank Reconciliation
➢ Assets / Equipment Ledgers etc.

9. Form Processing Services:

Service Example:
➢ Insurance claim form .
➢ Medical Form / Medical billing .
➢ Online Form Processing .
➢ Payroll Processing etc.

10.Internet / Online / Web Research

Service Example:
➢ Internet Search, Product Research, Market Research, Survey,
Analysis.
➢ Web and Mailing list research etc.

BPO’s provides these efficient services at reasonable costs and will be able to slash
the time and money requirements by a large amount. The complete range of BPO
services are used by the organizations which require end-to-end management, for
their business operations. The focus is on precise operational activities, combined
with state of the art infrastructure, has proved to be beneficial for widespread client
network.

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 CHAPTER 2.
INDIAN BPO INDUSTRY

INTRODUCTION

INDIAN BPO INDUSTRY

At the turn of the millennium, India has numerous reasons to smile about. The
economy is no longer passive and redundant; on the contrary it is one that is being
steered by the winds of social and economic changes. During the past few years,
the country has seen phenomenal developments in its political, social and
economic infrastructure, accelerated by the strong forces of globalization and
Information Technology. A country with a resurgent, progressive economy; India
can be rightly called the foster-child of globalization. The booming Information
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Technology (IT) segment comprising ITES (IT-enabled services) / BPO (Business
Process Outsourcing) are the core sectors that have driven the country into the
epicenter of change. The liberalization of the Indian Telecom sector in 1994 gave
an unexpected boost to the ITES/BPO industry.
India has enormous opportunities emerging from globalization and consequent
lowering of tariff barriers. Information Technology has given India formidable
brand equity in the global markets. Indian BPO companies have a unique
distinction of providing efficient business solutions with cost and quality as an
advantage by using state of art technology. Through joint efforts of Government
and the Industry, software development and IT enabled services have emerged as
niche opportunities for India in the global context. The Government has been
making continuous efforts to make India a front-runner in the age of Information
revolution.
In no time, India has turned into a hot destination for global offshore outsourcing
companies. The expansion in this sector can be attributed to the leading IT giants,
captive players and third party service providers, who dominate the Indian
ITES/BPO market. While the countries around the world are vying for a fair share
of the cake, India has grabbed the pie as the preferred destination for offshore
outsourcing. Indeed, India is shining!
By virtue of different advantages India has been able to maintain its supremacy
over its rivals in the BPO industry but there are a number of other countries, which
can give India run for its money in Business Process Outsourcing. Some of the
prominent competitors of BPO India are China, Philippines, Mexico, Canada, and
Malaysia etc…

2008 was a transformational year for the Indian Information Technology-Business

Process Outsourcing (IT-BPO) sector, as it began to re-engineer itself to face the
challenges presented by a macro-economic environment which witnessed
substantial volatility in commodity prices, inflation, and decline in GDP rates,
cross-currency movement, finally culminating in the economic downturn.
In an increasingly globalised world, significant complexity and uncertainty is
getting attached to this unprecedented economic crisis. The Indian economy has
also been impacted by the recessionary trends, with a slowdown in GDP growth to
seven per cent. The focus and exponential growth in the domestic market has
partially offset this fall and insulated the country, resulting in net overall
momentum. The IT-BPO industry in India has today become a growth engine for

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the economy, contributing substantially to increases in the GDP, urban employment
and exports, to achieve the vision of a “young and resilient” India.
During the year, the sector maintained its double digit growth rate and was a net
hirer. This growth has been fueled by increasing diversification in the geographic
base and industry verticals, and adaptation in the service offerings portfolio. While
the effects of the economic crisis are expected to linger in the near term future, the
Indian IT-BPO industry has displayed resilience and tenacity in countering the
unpredictable conditions and reiterating the viability of India’s fundamental value
proposition. Consequently, India has retained its leadership position in the global
sourcing market.While the current mood is that of “cautious optimism,” the
industry is expected to witness sustainable growth over a two-year horizon, going
past its USD 60 billion export target in FY2011. While the industry has significant
headroom for growth, competition is increasing, with a number of countries
creating enabling business environments aimed at replicating India’s success in the
IT-BPO industry. Hence, concerted efforts are required by all stakeholders to
address the current challenges, to ensure that India realises its potential, and
maintains its leadership position.

India still has the leading edge in the BPO industry, but it should keep on
improvising to maintain its stability. Therefore India should be on its guard to
maintain its position intact. If India has to maintain its supremacy in BPO and its
software workforce, then BPO India has to learn Spanish, which is spoken in more
than 24 countries. With India already stamping its superiority in the BPO sector
with its knowledge of the English language, it now needs just one other language
that will make the world its market, which is Spanish.

If we compare India’s advantage over US in terms of cost involved , India stands a

leap ahead from US in cost benefits.

Fig. Comparison among the cost involved/benefit – source NAASCOM.

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US$ Cost per FTE
(Full Time Employee) United States India India as % of US costs

Personnel 42,927 6,179 14%

G&A Expense 8,571 1,000 12%

Telecom 1,500 2,328 155%

Property Rentals 2,600 847 33%

Depreciation 3,000 1,500 50%

TOTAL EXPENSES 58,598 11,854 20%

It may seem a little strange, perhaps even ironic, to many social scientists and
historians that a country known to be in perpetual slow motion, with one of the
lowest literacy rates, and quite infamous for its lack of service attitude would be
chosen by the world to become a global services hub.
But India has been a country of stark contrasts. It continues to be. When all this
began, just about half a decade back, its telecom infrastructure on which the whole
offshoringmodel is dependent on, was one of the poorest, by any standard, most
certainly by the standards of the countries that chose to move their services to
India. In the matters of faith, India has never disappointed. From Buddhism in the
era before Christ, to technology in the twenty-first century, India has delivered
value—spiritual or material—whenever the world has turned to it. Offshoring has
not been an exception. Most companies who have outsourced to India have
realized that India has consistently delivered a higher quality, leading to the slogan
—come here for cost, stay here for quality.
There is no doubt that they came here for cost. But they also came here because we
could speak English. They came here because India had built an awareness about
itself by successfully delivering offshore IT services.
However, two reasons that are extremely important in explaining the large-scale
success of India are-
One—India’s large pool of manpower—often gets mentioned as just another factor.
In fact, India’s large human pool—so far seen as a liability and believed to be the
cause of all that is negative about the country—is the single-most important asset
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that has not just made people shift their services here, but will make them stay
here. The icing on the cake is: unlike many of our potential competitors—this
manpower is not concentrated in Delhi or Mumbai. They are spread everywhere in
India. So India will not get saturated anytime. Delhi or Bangalore may, but not
India.
The second reason—and this is never even mentioned in the numerous
presentations that you hear everyday—is the power of global Indian, more
correctly the ‘embedded Indian’.
India can sustain this lead over other nations, who could potentially be cheaper in
comparison to India. Two major factors that would sustain India’s position as the
global outsourcing hub are its demography and its intellectual prowess.

REASONS OF BEING THE #1 BPO DESTINATION

During the last decade, the IT Industry and BPO (Business Process Outsourcing),
have significantly increased. India has had a fundamental role in this growth as a
principal destination of Outsourcing/Off shoring for the World and the country that
holds close to 65% of the total IT industry in Off shoring and 46% of the total
BPO1 industry. The global outsourcing market is currently growing at a rapid pace
due to the benefits that it offers, and it is projected that during the upcoming years
India will continue to be one of the principal destinations for outsourcing given the
variety of factors that have made it tan ideal place for this industry.
For today’s youngsters, the call centers are a welcome addiction. The industry has
woven such magic around the entire nation that these days a city without a call
centre would be hard to find. Call centers contribute a fair share to the revenue of
the Indian BPO industry. About 70% of the BPO industry’s revenue comes from
call-centers, 20% from high-volume, low-value data work and the remaining 10%
from higher-value information work.
The average Indian’s attitude towards life has undergone a drastic change in the
last few years. The motto of today’s young Indian generation is “Live life king
size”. The changing lifestyles, demand for luxury and emergence of high-income
spending groups coupled with a thoroughly cosmopolitan outlook of life are
changing the modern Indian. Call centers are a major turn on for young graduates.

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In addition to providing employment, the call centres offer excellent benefits, good
working environment and attractive remuneration packages.

There are several reasons to choose India consistently number one BPO destination
or service provider –
Human Resources –
Availability of suitable human resources is one of those factors which have made
India one of the hotspots of BPO/IT industry. India is home to a vast pool of
human resources consisting of educated, English speaking, tech-savvy personnel.
Every year, approximately 19 million students are enrolled in high schools and 10
million students in pre-graduate degree courses across India. Moreover, 2.1 million
graduates and 0.3 million post-graduates pass out of India's non-engineering
colleges. These figures very well give the idea of human resources availability in
India.

This great pool of human resources holds the key to IT/BPO destination i.e. India.
India is rich not only in terms of number of qualified peoplebut the quality is also
of international level. IT/BPO industry. If we calculate the availability of human
resources at current rates, there will approximately be 17 million people available
to the IT industry by the year 2008.

Language –
India definitely enjoys the benefits of a vast pool of skilled workers who are
proficient in English language. India produces the largest number of graduates
every year and most of these graduates have the knowledge of English language.
Thus, language is one of those factors which attract MNCs to contract out their
business operations to Indian BPOs and IT companies. Though there are
competitors like China which also have a large pool of skilled workers but they
don't have enough graduates who have command over English language.

In addition to this the Indian education system also places strong emphasis on
mathematics and science. This has resulted into a large number of science and
engineering graduates. Mastery over quantitative concepts coupled with English
proficiency makes India one of the hot spots of the IT/BPO word. It has enabled
the India to take advantage of the current international demand for IT.
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Government Policies -
The Indian government realizes that Information Technology has the potential to
influence extensive economic development in the country. IT is now one of the top
priorities of the Indian government and favorable policies are being formulated to
extract maximum benefits from the industry. Here, we are highlighting some of the
government policies which have proved very beneficial in the growth of IT/BPO
industry. These favorable government policies have gone a long way in making
India a BPO/IT hub.

➢ The reforms have reduced licensing requirements and made foreign

technology accessible. The reforms have also removed restrictions on
investment and made the process of investment easier. This has
tremendously helped the IT/BPO industries.
➢ The Indian government is actively promoting FDI and investments from
NRIs (Non-Resident Indians). FDI can be brought in through the automatic
route, based on powers accorded to the Reserve Bank of India.
➢ In pursuance of liberalization and globalization, the Indian government has
been formulating and implementing more transparent and investment
friendly policies. This is now reflecting in many areas. Till 1994, DOT was
the sole provider of basic telecom services in India but the new telecom
policy opened the field to the private operators as well. It has made India
one of the fastest growing countries in the field of telecom.
➢ Another significant example of the liberal policy of the Indian government
is the IT Act. The IT Bill passed in 2000 provides a legal framework for the
recognition of electronic contracts, prevention of computer crimes,
electronic filing of documents, etc.
➢ In pursuance of the liberal policies, the Indian government has been
continuously proposing amendments in the Indian Evidence Act, Indian
Penal Code and the RBI Act. The mechanism of digital signature has been
21
 proposed to address the issues of jurisdiction, authentication and
origination.
➢ Recognizing the importance of Venture Capital Funding, the Ministry of
Information Technology has set up a National Venture Fund for the
Software and IT Industry with a corpus of Rs. 100 crore. The main aim of
the venture capital Fund is to provide Venture Capital to start up software
professionals and small IT units.
➢ Nasscom (most important promoter of the IT/BPO industry) has been
playing a crucial role in helping the IT industry achieve the IT and ITES
vision and make India far ahead of other players in the field of IT and
BPO.
➢ Nasscom has helped the government implement almost all the original
recommendations of the last Nasscom-McKinsey Report, 1999 concerning
the capital markets, venture capitalists, SEBI and the Companies Act.
Infrastructure –
Improved infrastructure is another important factor which has helped India to
achieve tremendous success in the field of IT/BPO. There has been tremendous
growth and improvement in telecom, power and roads infrastructure in the last
few years in India. The overall roads and highways infrastructure scenario in India
has also witnessed major improvements over the last few years. We have now
entered the arena of multi lane highways. Most of the cities and towns are
connected and interlinked to each other. Major investments have gone into the
development of highways, both on the side of the central and state Governments.
Relevant telecom facilities are an important precondition for the success of the
software and BPO industry. The Indian government has taken numerous steps to
improve the telecom infrastructure in the country. The international bandwidth
situation has improved dramatically over the last 3 years. The privatization of the
telecom Industry has resulted not only in significant drop in rates but also better
services. The telecom costs have dropped by about 85%.
Similar changes have been observed in the power sector infrastructure as well.
Power availability has also improved dramatically over the last few years. This has
gone a long way in ensuring uninterrupted power supply to the IT/BPO
destinations like Bangalore, Delhi, Chennai, Bombay, Pune and Calcutta. In
addition to this state governments in India have undertaken reforms in the power
sector to improve power supply to ITES companies.
22
Cost-effective –
Cost effective man power is yet another important factor which makes India a hot
spot of IT/BPO industry. With a vast pool of skilled human resources ready to
work at lower wages in comparison to the European or American countries India is
attracting business process outsourcing. In India, the manpower cost is
approximately one-tenth of what it is overseas.
For example, per agent cost in USA is approximately $40,000 while in India it is
only $5,000. It is but natural that companies contract out their work to cost
effective destinations like India. India produces about 100,000 engineers every
year. These can be used in call centers for troubleshooting/tech support, as the
salaries are dramatically lower than in Europe or the US. In such situations MNCs
choose to outsource their business processes to cost effective India rather than
offshoring to other costly destinations.

Time Zone Difference –

India has an 8-12 hour time zone difference with respect to the US and other
developed markets. It is of great advantage in BPO operations, which offers
reduced turnaround times, since processing services are performed at night hours
in the developed countries. India is able to offer a 24x7 services and reduction in
turnaround times by leveraging time zone differences. This difference in time zone
is because of India's unique geographic location. When it is day in India, it is night
in America and even as we go to bed, they rise and go to work. This time
difference has been intelligently brought to their advantage by the call
centre’s/BPO’s.
Most of the Indian call centers servicing American customers have timings
between 5:30 p.m. to 9:30 a.m. This time zone difference benefits not only the
Americans but also the Indians. Not only does the time difference allow Indian
companies/BPOs/Call centers to service American clients by working in the nights,
it also helps in better utilization of their resources. The companies can utilize the
same resources to serve other clients in India and abroad during the day. Thus the
time zone difference also helps in sharing of resources which, in turn, saves costs
and also earns call centers better revenues.

23
 KEY PLAYERS : INDIAN BPO INDUSTRY
BPO (Business Process Outsourcing) has become the latest buzzword for young
career aspirants in India. BPOs not only attract millions of young job seekers, they
also open numerous options for the companies that want to outsource their
work. Here, listed the top ten BPO firms that deliver the best in terms of both
customer and employee satisfaction.

• Genpact -
Founded in 1997, Genpact has emerged as the largest employer in the IT and
BPO operations with more than 50,000 employees. Genpact helps clients
improve the ways in which they do business by continuously improving their
processes. The company achieved another milestone by acquiring Citi BPO
for USD 630 million in 2007.Genpact has more than 30 operations centers in
nine countries including India, China, United States and Philippines.

• WNS Global Services-

WNS Global Services is a leader in business process outsourcing (BPO)
operations. The company has proved itself in critical business processes, by
catering to the needs of both Indian and foreign clients. WNS Global
Services offers services in various fields such as travel, insurance, finance,
healthcare, manufacturing and other professional services. It also deals with
accounting, HR and payroll.The corporate office of WNS Global Solution is
located in Mumbai. In addition to four Indian locations, the company has
branches in the UK, USA, Sri Lanka and Romania.
24
• GE India -
GE has been a leader in Indian BPO industry, although some other
companies have emerged as front-runners in the last few years. GE is made
up of six businesses, each of which has a separate division for operations.
The six business operations of GE are GE Commercial Finance, GE
Infrastructure, GE Healthcare, GE Money, GE Industrial and NBC
Universal.

• TCS BPO -
Although TCS (Tata Consultancy Services) began its operation as a software
company and is considered as one of the top three IT companies in India, it
excelled in BPO operations within a short period. TCS BPO is undoubtedly
one of the leading BPO Companies in India. In 2006, TCS BPO was named
as one of the world's top BPO providers by the International Association of
Outsourcing Professionals.TCS BPO offers quality services in areas such as
Finance & Accounting, Banking, HR Outsourcing, KPO, Insurance, Payroll,
Healthcare, Telecom, Media, Travel and Entertainment. TCS operates from
more than 41 countries and has more than 155 offices across the globe.

• IBM Daksh -
Daksh is a big name when it comes to Indian BPO industry. Even before it
was acquired by the IBM, Daksh always received awards and recognition for
excellent employee and customer satisfaction. It also has two branches in
Manila, Philippines.IBM Daksh offers solutions in Customer Relationship
Management (CRM), financial services, industrial services, communication,
travel, retail, hospitality and distribution industries. The company has both
call centers and back office operations.

25
• Accenture -
Accenture is a global management consulting, technology services and
outsourcing company, which is committed to delivering the best when it
comes to client and employee satisfaction. Accenture has a good track record
in Indian BPO industry. It has received accolade both in India and
abroad.Accenture offers services in Airline, Automotive, Banking, Finance,
Communications, Energy, Electronics, Insurance, Media, Entertainment,
Health, Public Services, Travel and many other areas. Accenture has offices
and operations in more than 150 cities across the world.

• Transworks -
Transworks BPO is a part of Aditya Birla Group in India. It is now known as
Aditya Birla Minacs. Aditya Birla Minacs recently featured in the Leaders
category of the 2008 Global Outsourcing 100. The list was released by the
International Association of Outsourcing Professionals (IAOP).
The company has offices in six countries including India, USA, Canada and
Philippines. In India, its head office is located in Bangalore. It also has
branches in Mumbai and Baroda. The key services offered by Trnasworks or
Aditya Birla Minacs are knowledge process outsourcing and integrated
marketing services that include sales, customer service, back office
administration and channel support operations.

• Wipro BPO-
Wipro BPO, powered by its parent company Wipro Technologies has
achieved significant growth over the past few years. After the acquisition of
26
 Spectramind in 2002, Wipro BPO took a quantum jump in the BPO services.
It operates from 9 different locations in the world including India and
Eastern Europe. Wipro BPO offers BPO services in Banking, Insurance,
Travel & Hospitality, Hi-Tech Manufacturing, Telecom, Healthcare, HR
Services, Legal Process Outsourcing and Knowledge services. Wipro BPO is
now called as Wipro Spectramind.

• HCL BPO -
Like Wipro and TCS, HCL BPO is powered by the leading IT company
HCL, which was founded by Shiv Nadar in 1976. HCL BPO is one of the
early players in the BPO industry. It has more than 12,000 professionals
working from India and Northern Ireland. HCL BPO Services is the largest
in Northern Ireland.HCL BPO offers services in Telecom, Retail, Banking,
Finance, Insurance, Manufacturing, Supply Chain Management, Accounting,
Knowledge Process Outsourcing, Legal and Technical Support Services. It
ranked third in Highest Satisfaction for Business Process Outsourcing by the
Black Book of Outsourcing in 2007.

• Convergys -
Convergys India is a part of Convergys Group, which is headquartered in
Cincinnati, Ohio. It has 77 customer contact centers, three data centers and
other facilities in the United States, Canada, Latin America, Europe, the
Middle East and Asia. In India, Convergys has branches in Bangalore,
Hyderabad, Mumbai, Delhi, Pune and Thane.Convergys is known for high-
value services and client satisfaction. It offers services in Communications,
Financial Services, Healthcare, Government, Manufacturing, Retail,
Insurance, Technology and Transportation. Convergys has both call centre
and blended processes.

27
 BPO COMPETITORS OF INDIA

From the last two decades Business Process Outsourcing is catering various
industries like Retail, Insurance, Mortgage, Banking and Finance, Healthcare,
Telecommunications, Technology, Travel and Hospitality and more. Companies are
consolidating and standardizing operating processes by outsourcing the business
process to third parties that offer economies and focused management expertise. In
the present scenario many UK and USA based companies are resorting to Asian
countries like India, China, Russia and Philippines to outsource their business
processes. Offshore BPO is predicted to grow at a significant rate per year. BPO
within Asia-Pacific market is expected to display a growth rate of about $14 billion
by 2010.
Business Process Outsourcing help companies achieve indomitable position in the
service market and generate high profits by improving their business operations.
Business Process Outsourcing is a tool that allows the companies to survive in the
cut throat competition by retaining their customers and providing high rate of
customer satisfaction. The advancements in technology and infrastructure have
made it easier to carry out BPO services. Countries offering cost advantage by way
of cheap labor along with skilled workforce are ideal destinations for BPO
industry.
Out of the U.S. $35-37 billion offshore BPO market in 2008, India remained the
leading offshore destination with 35% market share. The Philippines, which is
28
barely 1/10th of India’s size, represented 15% of the offshore BPO market. The
Philippines has emerged as a key destination for English-based work especially for
the North American market.
Growing at 46% annually since 2004, the US $6.8 billion Philippines’ offshore
market today employs over 450,000 people. Most of the people employed are for
voice-based services. By virtue of certain advantages India has been able to
maintain its supremacy over its rivals in the BPO industry but there are a number
of other countries, which can give India run for its money in Business Process
Outsourcing. Some of the prominent competitors of BPO India are China,
Philippines, Mexico, Canada, and Malaysia.
Future of BPO in China: China is perhaps the biggest challenge in the future and
the largest threat to India, and with the largest population and fastest economic
growth, the Chinese have at least two advantages in the global outsourcing market
-- manufacturing and IT .
According to sources, the call centre industry in China is expected to grow by 22%
this year and will reach to 28 billion dollar revenue by 2010. This industry will
give employment to around 158,000 people including bank services and technical
support staff for IT companies. Multinational companies are attracted to set up
more BPO firms in China owing to high productivity and cost-effective human
resources. China enjoys a great advantage in terms of large pool of people. China
has certain advantages in offering low manpower costs compared to India, and
being close to Japan, its BPO market is also likely to grow through the Japanese
outsourcing route. As India currently offers no BPO services in Japan, China will
capitalise on its proximity to itbut the Chinese have a great limitation, as they do
not have enough English speaking graduates like India. The main disadvantages of
China are lack of good quality record in software, whereas India has a better image
as quality supplier.
Future of BPO in Philippines: Business process outsourcing or BPO is an
emerging industry in the Philippines. Since 1980s service sector has seen good
growth in Philippines. Employment of labor force has seen a major shift from
agriculture to service sector. Philippines enjoys advantages in being a former
United States colony that helps in emulating US culture and language, well
developed IT skill set, third largest English speaking nation in the world and large
29
scale technical training programme. Philippines has slowly but surely established
itself as the second largest destination for non-voice business process outsourcing
market. This, the country has been able to achieve on the back of successful
offshore delivery of voice-based customer service support. However, even today,
BPO delivery from the Philippines is no longer limited to voice-based services,
and a number of companies are already leveraging the Philippines for delivery of a
wide array of non-voice BPO functions. Philippines business process outsourcing
(BPO) industry is going strong and it has been estimated that by the year 2010 the
BPO industry revenues will be approximately US$12 billion. Also the industry will
generate one billion jobs by 2010. Philippines BPOs are doing greatly in legal and
medical transcription, finance, logistics and accounting.
Future of BPO in Russia: In the present scenario many companies are banking
upon Russia’s outsourcers wish to have a large number of BPO firms. Russian
outsourcing is known for cost effective quality services which gives the clients all
good reasons to hire Russian BPO firms. Russia is emerging as a skilled back
office administration to the world’s leading corporations. Hundreds of companies
are investing in Russia in outsourcing and this market is going to reach a billion
dollars. Large foreign firms have realised that in Russia there are "fantastic
programmers they cant find in the US or India," and are increasingly delegating
projects to Russian companies. People know that a vibrant IT market is developing
in Russia. And you have to be in Russia because its a very fast growing market.
Intel has invested 700 million dollars (515 million euros) in Russia in the last 15
years, while aircraft construction giant Boeing and telecoms equipment firm
Motorola have also set up centres there employing local engineers. Further Google
and HP have also made their intensions clear by announcing their arrival
in Russia. So far things are going perfectly in favour of the Russia thus making it a
better place to invest for other players across the globe.
FUTURE of BPO in Canada and Ireland –
The biggest advantage that these English-speaking countries offer is their
similarity to the US’s in terms of people and culture. They also have good
infrastructure and low economic and political risks. Ireland has a labour force of
30
just 1.8 million and professionals are expensive ($23,000 per year against $2,500-
5,000 in India). Canada’s advantage is low real estate prices and low salaries
compared to the US, but they are high compared to India. Vis-a-vis the US, clients
can save up to 25% in Canada. Canadian villages are also well suited for 200-300-
people operations. In India, savings are higher but US firms feel reduced risk is
worth the extra money.
Canada is suited for complex businesses that require proximity to the US. It has
superior employee retention rates and BPO experience.

Future of BPO in Brazil and Maxico –

Mexico and Brazil have an edge because their time zones are similar to the US and
they are also close to the US. Also, labour costs are low (around $1,300 per
annum). But proficiency in English is poor and skill levels are very low. Thus,
scalability is the major concern. They are, however, ideal for operations like
document management that require proximity to the US.
Brazil’s strengths include huge investments in IT and telecom and a large low-cost
labour pool, which is cheaper than Mexico’s. But Mexico’s forte is Spanish
language skills. US companies have saved 25-40% by outsourcing their work to
Mexico. However, Mexico lacks technical and mathematical skills. But for low-
cost, low-maintenance data-entry type of work, it is the best bet.
Future of BPO in South Africa –
South Africa is emerging as a hot BPO destination because it has a time zone
compatible with Europe and a 17- million strong labour pool (compared to India’s
270 million). The government’s support to BPO activities and a robust English-
based education system are attractive propositions for US firms to move their
operations to this nation. Costs are about 25% lower than in Europe. But skills are
not as easily available.

Hence India still has the leading edge in the BPO industry, but it should keep on
improvising to maintain its stability. Therefore India should be on its guard to
31
maintain its position intact. If India has to maintain its supremacy in BPO and its
software workforce, then BPO India has to learn Spanish, which is spoken in more
than 24 countries. With India already stamping its superiority in the BPO sector
with its knowledge of the English language, it now needs just one other language
that will make the world its market, which is Spanish.
Though countries like Australia, Canada and Ireland are the other players, they are
not serious competitors to India due to a small population base.

COUNTRY USP LIMITATION

Philippines Understands the US More expensive then

market. India.

Voice work. Small Talent Pool.

Low attrition.

Canada, Ireland, Understand the US; High Costs.

Australia high-end skills.

South Africa Time one similar to Skill Shortage.

Europe; 25% cost
savings; good for niche
work.

Russia , Ukraine Technical Skills Poor infrastructure;

corruption; language.

China Low costs No English speaking

capability.
32
Czech Republic, European language Small talent pool;
Hungary skills high costs.

Mexico 30% cheaper than the Good only for low-end

US, Spanish speaking jobs.
peoples

Table : The World of BPO-source NASSCOM

India has been the leader in BPO services for a few years now.
But, according to reports, this is going to change with countries
like China and Philippines joining the race and offering BPO
services at much cheaper prices. According to the research firm
Gartner, India is likely to lose market share in offshore business
process outsourcing (BPO), from 80% to about 55%.

India, which was considered to be the hotspot for all BPO related
activities, may soon lose its sheen to other developing countries
like China, Philippines and Srilanka. India was one of the first
countries to see the opportunity and start with BPO operations.
Moreover, it also had the strategic advantages such as skilled
manpower, linguistic capabilities, low labour cost, telecom
connectivity etc…
Right now, India leads the BPO business with a large market share. But all this is
set to change soon as other countries are waking up to the potential of the BPO
business and starting their own BPO firms. Experts forecast that India will remain
one of the top 5 outsourcing destinations but will lose the power that it enjoys now.
33
There are many factors that have lead to this situation. Some of the main reasons
are:

➢ Low manpower cost: One of the main advantages India had over
outsourcing countries was the manpower cost factor. With countries like
China and Philippines jumping into the race, India is fast losing this
advantage. These countries operate at low manpower costs and as such, offer
very low prices to their customers.

➢ Infrastructure: With increasing business and change in client requirements,

the need to update infrastructural facilities has increased. As of now, India
does not have a long-term plan to improve infrastructure whereas other
countries have put strategic thoughts to develop a well defined roadmap and
to ensure that the infrastructure needed to house such BPO firms are in
place. Moreover, India’s poor infrastructure adds to the business cost as
Indian firms require a lot of redundancies such as power and telecom
backups.
➢ Government policies: The Indian government tax policies such as taxes on
ESOPS, rental space etc is making Indian companies less competitive and
costlier when compared to the new players in the field. In countries like
China, Philippines, Srilanka and South Africa governments are offering 10
to 15 year tax breaks and China even offers income-tax holiday to its BPO
employees.

➢ Workforce quality: The lack of government interest in ensuring an

employable workforce leaves a lot of loopholes that have to be filled by
BPO companies through incurring costs on training, which again makes the
Indian BPO firms more expensive than the other developing countries. The
governments of countries like China and Philippines are ready to invest
money to train their workforce and make them employable.

➢ Attrition: Problems like unusual working hours, stress, job insecurity etc
have lead to high attrition rates in the Indian BPO industry. Moreover, more
and more people now do not take a BPO career seriously. For most of the
34
 youngsters today, BPOs are a just a place to earn money during their free
time. As such, the industry is facing a major shortage of manpower. Such
situations force the outsourcing companies to look for better pastures.

Apart from the points mentioned above, there are other problems such as time
difference and distance from the outsourcing countries that India is facing. Most of
the new ventures planned by other countries overcome these shortcomings and
provide a less costly, reliable option to the outsourcers. Unless the Indian
government does something soon to handle the situation, it won’t be long before
we would have lost the position that we hold in the global BPO segment.

REASONS BEHIND JOINING BPO

Business process outsourcing, the most flourishing Indian industry sector has
emerged as India’s most promising sector, and has been growing at a rate of 40-50
per cent since its inception. BPO is a very fast paced and a high momentum
industry which attracts the youth towards it . Today India is fast changing, so is its
youth. The past few years have seen a complete makeover in the urban youth and
the environment they live in. The increase in the number of coffee houses, swanky
malls, multiplexes or automobiles display the spending trend of the young Indians.
And one of the main factors boosting it, is the growth of the BPO sector in India.
The tremendous growth of Indian call centers in the last few years has resulted in
considerable socio-economic and cultural developments in Indian society. Indian
youth ranging from their lifestyle, personality, career, attitude, gender, and
language to their whole identity. This has positively impacted the time, talent and
skills of the Indian youth; no doubt, they are reaching their career milestones and
financial goals much faster and earlier than before.
Some of the reasons as why people prefer to join a BPO -
➢ One can earn a quick buck and lots of it.
➢ Financial Independence : gateway to good pay packages.
➢ Education level doesn't matter : One can join BPO after 12th.
35
 ➢ No investment needed to upgrade you unlike many other professions.
➢ communication skills can be greatly improved.
➢ No technical qualification required but if you have then it would help you
understand the technical part of process quickly.
➢ understanding the culture of different countries.
➢ Did not get a better job.
➢ Find nothing better to do.
➢ Good work environment- truly world class.
➢ Good Benefits .
➢ Flexibility of time .
➢ Attractive life style .
Without doubt, no industry has created so many jobs and sustained so many people
like the BPO industry.
One cannot deny the fact that the BPO industry has benefited Indian youth.

WORK CULTURE OF BPO

The Call Center culture is an inevitable outcome of the unconventional working
hours where time zone difference naturally exist between India and countries like
America. The BPO culture has altered the way Indians have lived for years
permeating their social and personal space. The call center is usually bustling at
night when operations are in full swing thus forcing employees to follow a
nocturnal lifestyle and activities appealing to the youth for its revolutionary style
of functioning. A call center job necessitates that workers adopt the western culture
so as to identify themselves with their customers leading to a gradual percolating
of the western culture in the environment.
The atmosphere in which the workforce effectively works to deliver high quality
performance.

➢ Energetic setting: BPOs have a vibrant environment. Generally the interiors

are also done up in a way that it makes people feel nice and energetic. This
36
 glamorous industry also involves a lot of hard work and specialized skills to
deal with all kind of customers.
➢ 24X7 work environment: BPOs have a round the clock working culture
and people work in day and night shifts. This is because International BPOs
offer services to countries like US and UK that have different time zones.
➢ Perfect amalgamation: The work culture in quality BPOs is a blend of
professionalism and friendliness. Humans are not treated like machines but
are given equal opportunities of growth in every sphere of learning. BPOs
create a friendly working atmosphere so that the employees don’t feel
suffocated.
➢ Rejuvenation channels: Long working hours and pressure to meet
deadlines and achieve targets takes its toll on the well being of the
employees. Quality BPOs offer world class channels to de-stress employees
and to motivate them. Entertaining events and parties are organized at
regular intervals so that the employees are relieved and invigorated to take
the challenges head on. World-class BPOs also have gym, sports and café
facilities.

➢ Pep up the energy levels: BPO employees work hard to meet deadlines and
targets. Motivation is a great booster when it comes to delivering high end
results. So to ensure that the team is motivated, team leads and managers
keep the morale of the employees high through encouraging words. Good
and outstanding work is always recognized and rewarded in the form of
perks, incentives, gift certificates, etc. in the BPO sector. At no point in time
the employees feel the dearth of guidance and warmth of encouraging
words.
➢ Rich culture ties and exchange: People from every nook and corner of the
world are lured by the state-of-the-art facilities and hefty pay packages.
Apart from the culture shock there is a gold mine prospect of rubbing
shoulders with people from different educational, professional and cultural
backgrounds.
➢ Increase In knowledge – A lot of vendors provide the management with
flexible as well as scalable services to meet the customers’ changing
37
 requirements, along with supporting company acquisitions, consolidations,
in addition to joint ventures.

SPOILSPORTS IN BPO’s INDUSTRY

BPOs have proved a grand success. Business process outsourcing, the most
flourishing Indian industry sector has emerged as India’s most promising sector,
and has been growing at a rate of 40-50 per cent since its inception. BPO is a very
fast paced and a high momentum industry. BPO industry is expected to generate
one million jobs by the year 2008. Taking advantage form the abundant skills and
low cost benefits, large number of BPO companies have mushroomed in India in
recent years, many of the well established IT companies have also started their
BPO divisions. But, there is another side of the BPO picture too. The side that has
already brought the BPO industry in limelight many times. This picture is
concerned with the non viability of the BPO and the fact that the young generation
of India is actually loosing out in the BPO.
It is true that now day’s employees are not working for salary because they want to
relaxation in job. Most youngsters do not like joining the business process
outsourcing (BPO) due to stress and health issue. BPO employees are quitting
BPO job’s to get rid of the stress and strain at work place.
38
Following are the key spoilsports that have their huge impact on the fastest
growing industry :
Stress: Growing stress levels of call center agents led us to delve deeper and find
out the factors that play spoilsport in the otherwise rewarding BPO job. Employees
are facing stress problem in BPO due to that their health is down. If customers are
not getting comfort and the full relaxation in BPO companies then they quit the
company.
Long working hours: Any call center agent works for 12 hours on any given day
with only three 15 minute breaks through the day. This becomes difficult to
manage as the body and mind tires out after a point of time.
Business process outsourcing organisations, commonly known as call centres –
work when rest of the India sleeps! Most of the BPO organisations work according
to the international (US and UK) timings, therefore most of the BPO employees
work in might shifts starting anywhere from 10 p.m. to 2 a.m. and ending at 6 a.m.
to 10 a.m. There is also a graveyard shift starting at 4 a.m. working in such shifts
having odd timings have started showing hazardous results on the health of the
Indian youth.
Travel time: Most BPOs are set away from the bustle of cities and it takes more
than an hour or two for cabs to reach their destination.
Repetitive nature of work: A call center job gives little room for innovations and
individual work. A day's work is defined for everyone in the same manner. The
same script, same kind of calls and customers make the job monotonous and
stressful on a day-to-day job.

Overtime: Although this is not one of the larger concerns, call center executive
feel stressed by the factor; with 16% of the respondents admitting the same. Most
companies adequately compensate for working overtime especially if one works on
weekends.

Health issues: Factors like long night shifts, stress, pressure to perform on metrics,
high call volumes and irate customers invariably take a toll on the health of the
39
BPO executive. Common ailments that emerge are insomnia, depression, visual
and hearing problems, and digestive problems. An increasing number of BPO
executives are seeking counseling from psychiatrists and psychologists today.
Prolonged working in shifts of odd hour’s can have major implications on the
physical and mental health of the employees. The physical strains like sleep
disorders, depression, odd working shifts, learning foreign accents, constantly
handling abusive calls and high stress levels are making the BPO employees more
prone to hypertension and heart attacks.
Depression is the most common problem faced by BPO employees. Frequent
headaches, feeling of fatigue, sleeping disorders and frustration have become
regular problems .

Pressure to perform on metrics: Efforts to attain the desired balance between the
quantity and quality of calls remains a perennial challenge. The above factors are a
sticky aspect of a career in a BPO. However, innovative HR policies aimed at
relieving stress at all major BPO's have definitely initiated the process for a stress
free work culture for the BPO work force.

40
 AREA OF CONCERN IN BPO

➢ Working in a BPO, many feel is a job that does not require much skill. Any
body possessing a basic education, good communication skills is
employable after some training. Companies do not mind taking in people
who are middle aged, and homemakers. There is no sense of
accomplishment among the employees.

➢ Financial desperation on the part of some people leads them to take up jobs
in BPOs- People out of college join BPOs to earn money to finance their
higher education, some as a way of improving their life styles. Some others
join because they could not find anything else. In short, very few people take
up employment in BPOs for the love of it.

➢ The tasks that BPOs perform are diverse: telemarketing, technical support
service, customer support service, insurance processing, data entry and
conversion services, bookkeeping and accounting and online researching,
and form processing. The problem that this creates is that there can be no
standardized training program suitable to all the BPOs that can be given to
the prospective employees before they are actually absorbed into the
company.

➢ High expectations from the outsourcing companies tend to de-motivate the

workers. In many cases, the outsourcers think only of achieving targets.
41
 They are obsessed with quality work, business continuity, time frame,
security of information. However, satisfying them is not always possible.
The expectations should be realistic taking into account the work ethics of
the region of the service provider, as well as, its culture and polity.

➢ Attrition in BPOs :- The single largest worry of the BPO industry is attrition.
In the outsourcing context, ‘attrition' means a gradual reduction in the
number of people working in a company due to retirement, resignation, or
death. The rate of attrition in the BPO industry in India is currently nearly
50%. Attrition in individual firms varies from 15% in the larger firms to up
to 40% in the smaller ones. Analysts believed that if this left unchecked,
there would be a shortage of professionals.

ATTRITION RATES (%)

US - 42%
Australia - 29%
Europe - 24%
India - 18%
Global Average - 24%

Fig. Attrition rates at BPO in different countries. (Source-Times News New York)

➢ Control - By using BPO services many firms loosing managerial control,

because it is not easy to manage outside service providers than managing
one’s own staff working possibly in the same edifice.

➢ Security – The main disadvantage of BPO or outsourcing is its security and

secrecy. In case, if in a firm who operates in services like MT, bank
accounts, then in these kind of circumstances firm must be very careful in
selecting which services it wants to outsource and to which provider.
Top challenges faced by BPO Companies

42
The major challenges to the BPO companies in present scenario are as follows –
1. No clear strategy -
There are numerous good reasons to outsource, but the worst is not to have a
reason. Some companies suffer with the “us too” complex. This arises when a
competitor is successfully outsourcing, so it must be good for your company too.
BPO should create added value for the company and shareholders by releasing
resources from spending time on accounts payable, invoicing and general ledger
processing to focus on strategic analysis, finance mission development and policy
setting and approval. BPO can also add value by integrating different functions
within your organisation that otherwise could not be cost-justified, and, at the same
time, provide the necessary resources to maintain the integration. Some companies
even take it a step further and partner up with the service provider to develop new
tools and processes. The risk and rewards are then shared between then two,
including revenue created from offering the tools and processes to other
organisations.

2. Selecting the right service provider -

When evaluating a BPO service provider, the three key criteria to look for are: a
proven track record, technical excellence and the ability to deliver improvement.
When evaluating any potential service provider, these are some of the essential
questions to ask:
○ Is the supplier aligned to the strategic goals of the business?
○ Does the supplier understand the business today and will they have the ability
to in the future?
○ Is the supplier being innovative in solving long-term business issues?
○ Does the relationship add any value to core business operations?
The most effective method of answering these questions is to talk to existing
clients, preferably within the same industry as your organisation. Learn from their
experience – identify the issues they encountered and their method of resolution.
3. Contract negotiation -
Service level agreements (SLAs) lie at the core of the BPO contract. These identify
the service deliverables and expectations of your service provider. Good contracts
will also describe the reporting methods for service levels measurement, how,
when and the level of attainment required. This will include any potential penalties
or benefits.
43
An important issue that is often missed from the contract is the termination or exit
strategy. Legally, both parties should have an agreement for how to terminate the
contract at any point in time, should it be necessary. Be aware that in contrast to
traditional IT, outsourcing BPO SLAs are business-based, not IT-based. Therefore,
you will need to focus on handling processes, business outcomes and people.
4. Creating a successful relationship -
On this point, traditional IT outsourcing and BPO are no different. It is essential
that you have a good relationship with your service provider to achieve a
successful outsourcing contract. IT service providers have recognised the
importance of a strong cultural match. However, many BPO service providers do
not yet appreciate the importance of this. It is imperative that the client and service
provider trust each other. If there is no trust, there will be mistrust. This will
create issues for each party. The relationship will become ineffectual, the service
will suffer and communication will break down.

Various other challenges are -

➢ US economy slowing down - particularly the Banking and Insurance

segments.
➢ Lack of Incentives from the Government - sunset cluase for STPI units.
➢ Failure to attract and retain top talent at all levels - Executive, Middle and
Senior Management.
➢ Bad media publicity - always showing the ill affects of working.
➢ Failure by the Companies to project 'careers' instead of 'jobs'.
➢ Poor perception by the job seekers.
SWOT ANALYSIS OF BPO INDUSTRY
STRENGTHS WEAKNESS

• Large number of talented graduates • Scarce foreign language skills other

than English.
• Affordable and quality education as
compared to developed countries • Lack of customer service culture

• English language benefit • Expensive and poor quality telecom

infrastructure
• Well-developed IT industry
• Failure to attract and retain top talent
44
 • Strong customer base of well known at all levels.
companies
• Bad publicity.
• Powerful venture capital interest in
investing in growth opportunity • Cultural differences

• High attrition rates, therefore less no.

of people with extensive call centre
experience

OPPORTUNITIES THREATS

• Horizontal and vertical expansion of • High Billing rates

existing customer base into new
markets. • Political instability

• Time zone difference between India • Government policies

and target markets,
• India's competitors in Eastern Europe,
• Increasing awareness of outsourcing Latin America and the Asia Pacific
services . regions offering cheap BPO services

• Increasing technology automation.

SWOT : Strengths, Weakness, Opportunities and Threats of the subject.

45
 CHAPTER 3.
BPO AND INDIAN ECONOMY

INTRODUCTION

BPO AND INDIAN ECONOMY

BPO Role in India’s Economic Growth has been tremendous, especially in the
last few years, when the demand for outsourcing work to India has been significant
among western companies.

The role played by BPOs in boosting India’s economy shows that the IT and ITeS
sector have been contributing largely to the economic growth of India. The growth
in the contribution of BPOs to Gross Domestic Product has shown a steady rise
from 1.2% to 5.4%. It is hence evident that the BPO industry is making an impact
on the Indian economy. BPOs are aiming at contributing towards bringing in more
earnings to the country and IP creation.
BPO Role in India’s economic growth is set towards making a significant impact
in the time to come as well. The driving forces that account for the increase in
foreign investments through the BPOs in India are:
• Emphasis on quality services
• Skilled sets and workers
• Cost effectiveness
• Quality products
• English speaking manpower
46
These features of the Indian BPO industry attract long-term contracts and as a
result, there are high earnings which in turn result in major contribution to
economic growth. As a matter of fact, the Indian BPO industry is leading in the
market and is improving in the area of training professionals in learning foreign
languages and increasing the number of skilled workers. This will give India the
ability to sustain its global leadership and probably generate export revenues of
USD 10 billion by 2010.

The setting up of more BPOs is also bringing in more job opportunities for the
Indian youth. BPO role in India’s economic growth will even facilitate great
maneuvering in the country’s balance of payments.

BPO role in India’s economic growth is definitely at the growth stage but is all set
for a major contribution to the Indian economy, especially if the government
supports the sector in terms of financial growth, openness to trade, rural-urban
migration, and education.
RECESSION /SLOW-DOWN
A recession is a decline in a country's gross domestic product (GDP) growth for
two or more consecutive quarters of a year. A recession is also preceded by several
quarters of slowing down. A recession normally takes place when consumers lose
confidence in the growth of the economy and spend less.
This leads to a decreased demand for goods and services, which in turn leads to a
decrease in production, lay-offs and a sharp rise in unemployment. Investors spend
less as they fear stocks values will fall and thus stock markets fall on negative
sentiment.
The defaults on sub-prime mortgages (home loan defaults) have led to a major
crisis in the US. Sub-prime is a high risk debt offered to people with poor credit
worthiness or unstable incomes. Major banks have landed in trouble after people
could not pay back loans. The housing market soared on the back of easy
availability of loans. The realty sector boomed but could not sustain the
momentum for long, and it collapsed under the gargantuan weight of crippling loan
defaults. Foreclosures spread like wildfire putting the US economy on shaky
ground. This, coupled with rising oil prices at $100 a barrel, slowed down the
growth of the economy.
US economy is facing a downturn period. The economy that has been the driving
force for the economies of other developing nations is in its slump time. The

47
calculations say that this downfall of US will affect the IT industries and other
sectors of the most nations.
The analysts are calculating the effect of US recession on Indian Economy and its
various sectors. They are reckoning the effects of this downfall period on Indian
Exports, IT developments, growth in Software sector and BPO sector .
The fear of a recession looms over the United States. And as the cliche goes,
whenever the US sneezes, the world catches a cold. This is evident from the way
the Indian markets crashed taking a cue from a probable recession in the US and a
global economic slowdown.
Weakening of the American economy is bad news, not just for India, but for the
rest of the world too. There is news that expose US call centers are not much
involved in proactive customer service.
The experts are foreseeing these factors as the opportunities for Indian BPO
industry. They are advising that Indian BPO sector should place itself in the US
BPO shoes to reinvent the services of the customers that otherwise use the US
services.
The BPO sector will keep on booming as it is an essential service. The fact that
besides many promises, Indian IT industry is slowing down and the effects could
be seen in its current policies. There have been shrinking absorption of labor and
decline of many other services can not be argued. But the reports clarify that this
will not be same for the BPO sector.
The reports state that Indian BPO sector has the potential of reaching US $1.6
billion by 2008 and US $50 billion by 2012, with this recession continuing. This
sector will add 2.5% to India’s GDP growth. It will provide employment to about
two million people.
But achieving all the success depends on the way BPO players will take the
change. They have to remain focused to grab the opportunities that US recession
has offered them. This growth factor is dedicated to the arising prospects in
domestic sector. The BPO industry can turn to the evolving break in domestic
market.
(Source of Article : Rediffmail.com, Business)
The current economic meltdown in the United States and other developed
countries is likely to benefit the Indian BPO industry as it would compel more
companies in these markets to look at outsourcing as a way to cut costs and
enhance efficiencies.

48
 Rupee impact and the challenges for BPO Industry

The sharp appreciation of the rupee in relation to the dollar and, to a lesser extent,
the euro, the pound and the yen has naturally affected the booming software
exports and the BPO industry. The biggest challenge is the appreciation of rupee
against dollar. All the billings for BPO are done in dollar where as the expenditures
are maintained in rupee.

The outsourcing businesses operating in India are feeling the pinch in their profit
margins due to appreciation of rupee as against the dollar. A one percent rise in the
rupee against the dollar has around 75-80 basis points impact on the operating
margins for BPO companies.

While it is true that the INR has appreciated against the dollar to record levels over
the past one year, and now hovers at INR 40 to a USD, the fact is: so have most
other currencies, including the Euro, gained against the US dollar. Little googling
reveals something not so startling. The INR may have gone up in comparison to
the USD, but so have most others. Thus, effectively, the INR has maintained its
level against most other currencies (that have let market forces determine the rate).
Hence, the real issue is not that the INR is appreciating, but that the USD is
depreciating .To track the Dollar that has been falling against all currencies .Thus
to be quite honest, it certainly is not strengthening of the Rupee but rather the
weakening of the Dollar.

The world adopted dollar as the reserve currency because of its ability to withstand
any kind of onslaught.

49
The main reason behind falling of dollar against rupee and various other currencies
is that’s because the US is running a historically high trade deficit (it imports more
than what it exports). It’s simple — bigger the trade deficit faster will be the
dollar’s decline.” The average US consumer has become a buyer instead of a seller.
This acted as a double-whammy. While, on the one hand, the US wealth was
getting transferred to other countries in the form of imports (when the US imports,
exporting countries earn foreign exchange), financial speculation was slowly
giving way to bubbles in the stock markets and the realty sector.
There is rising concern over the steep appreciation in the rupee, was putting a
strain on BPOs. the impact is more severe in the case of BPOs as most of their
expenses are in rupee . The Information Technology (IT) and Business Process
Outsourcing (BPO) companies in India felt the pinch as 70 percent of the payment
by the clients was done in dollars resulting in losses for companies in this sector.

In this connection NASSCOM president Kiran Karnik, said, "There will be no

impact of the rupee appreciation on the top lines of companies. As far as
profitability goes, the impact will be less on the bottom lines of big (top-tier IT
companies) companies and for small IT companies, the impact will be big as they
have little lever to safeguard their earnings due to rupee appreciation through
hedging, moving more work onsite.

The rupee’s strong performance is expected to force the pace of consolidation

among these but a shift to lower cost destinations is also likely. On the positive
side, marketing and other promotional costs will come down. The bigger
companies, some of them with iconic status, have a special responsibility in
continuing to boost productivity, innovate and improve on their already successful
global delivery models. For the top companies, a rising rupee need not be a threat;
it could spur a move towards greater innovation and efficiency.

This time is the major sustainability test for BPO sector. At the concluding note,
Indian BPO sector will continue to boom in the adverse conditions also. It will
have the significant growth in coming years and will bring large revenues for
Indian Economy. It will polish the shine that India is having in BPO sector.

50
 CHAPTER 4.
RESEARCH DESIGN

INTRODUCTION

51
 RESEARCH DESIGN

Title of the project : “To study and analysis of Indian BPO(Business Process
Outsourcing) Industry and to promote the corporate Gifting culture in BPO’s with
reference to company store. in”.

Statement of the problem : The Business process outsourcing,

the most flourishing Indian industry sector has emerged as India’s
most promising sector, and has been growing at a constant rate.
Due to the extensive work pressure and stress-full work culture the employees
sometimes get de-motivated.
The company named “Hour Glass Essentials Pvt. Ltd.” has one of its vertical
called Company Store.in basically a web store that deals with corporate gifting.
The company wants to increase the awareness about the web stores and different
gifting products portfolio as well as helping out the corporate to settle down their
own web store for their employees.
The present study has been undertaken to analyze the BPO Industry particular,
conducted on behalf of “company store.in ”.

Objective of the study :

52
 ➢ To study and analysis of Indian BPO industry.
➢ Identifying the factors that have made India the #1 choice for BPO to locate
in.
➢ Effect of recession/ slowdown on BPO sector.
➢ To generate the awareness/culture for corporate gifting.
➢ To develop strategies, loyalty programs for BPO’s workforce and to provide
first hand information to the company.

Scope of the study : The marketing research in this context is concerned with one
of its several functions, marketing research that deals with the study of BPO sector
for analyzing the employees attitudes towards corporate gifts, that are used to
appreciate them for their hard work and motivates them to repeat the same.

53
 RESEARCH METHODOLOGY

Sampling Plan :
This study being expectation around 50 respondents ,basically employees those
work for the top BPO’s located in Bangalore, the IT city using stratified sampling
method.

Sources of data :

Primary data is collected for the research.

Questionnaire :

A structured questionnaire is prepared for the data collection and the survey is
conducted through the questionnaire in Electronic City, Bangalore. The
questionnaire was filled by 50 respondents. It is the only primary source used in
this study and based on the questionnaire only the study has been conducted.

Fieldwork :

54
This study involved a field work in electronic city, Bangalore in the form of
administration of questionnaire, collection of responses and other related
field activities.

Limitation of the study :

➢ Time is the major constrains.

➢ The study is restricted to the Electronic city, Bangalore only.
➢ The study is based on the assumptions that all the responses given are true.
➢ Sample size is small; hence the out come cannot be applicable to the
universe.
➢ Respondent provides data from their own intuitions and perception, which
may be rough estimates.
➢ Since this study is time specified, the study findings are valid only for this
study only.

55
 CHAPTER 5.
COMPONY PROFILE

INTRODUCTION

56
 COMPONY PROFILE

CompanyStore-

Company Store is a logo merchandise company that blends creativity, technology

and committed professionals, into an organization that supports the branding and
marketing initiatives of our corporate customers. We provide our customers with
the highest quality business solutions that further brand loyalty with their clients,
prospects and employees. Our business operates consistent with our Core Values
and in an environment where individuals are respected, encouraged and held
accountable.
State-of-the-art technology coupled with personalised service - this is the
company store forte. Your requirements are interpreted in the context of
budget, target and motivation and translated into the perfect gifting strategy -
evoking just the right reaction.
Leading with insights from our in-house research and experience, it assist many of
the world’s largest companies in meeting their most important business goals. It
help the clients understand, enable and motivate their employees, customers and
partners.
With decade of experience in the Corporate Gifting business, CompanyStore
now offers you a technology solution to setup your own online Corporate Gift
Store. and to improve brand recognition and awareness.
Company store programs
➢ Branded Merchandise
➢ Online Redemption Programs
➢ Pop-up Brand Store

57
Appreciation programs

➢ Intensive Programs
➢ Motivational Programs
➢ RnR Programs
Custom designed programs
➢ Consumer Loyalty
➢ Consumer Promotion
➢ Birthday, Gift, Anniversary and Long Service Award Programs
➢ Recruit and Refferal Programs
➢ Peer to Peer
➢ Manager to Employee
➢ Performance/Long Service
➢ Call Centre Programs
➢ Special Events/Trade Shows

We believe appreciating people reveals talents, builds confidence, and encourages

contribution. And the most influential way to appreciate people is to provide a
fertile environment where they can grow.

VISION AND MISSION-

The vision is to create customer intimate relationships with the customers with
whom we work, and to deploy our resources to accomplish customers unique
needs with a passion to exceed to expectation.
We desire not to be the biggest, but the best, in the eyes of our customers,
employees and shareholders.

58
 What CompanyStore do for you ?
It match merchandise with messages to make things happen-to motivate actions
and behaviors that meet its clients' business and brand objectives to:

➢ Protect brand identity and trademarks

➢ Enhance employee engagement
➢ Strengthen distribution channel partnerships
➢ Leverage brand sponsorship investments
➢ Reduce costs
➢ Streamline procurement processes
➢ Foster team attitudes and group collaboration
➢ Reduce employee turnover
➢ Improve brand recognition and awareness
➢ Ensure employee safety
➢ Increase productivity
➢ Leverage technology investments
➢ Drive purchasing compliance
➢ Improve organizational communications

Gifting Clients, Rewarding Distributors, Employees’ Schemes, Promotional

Schemes for enhancement of sales, each of these require Excellent Ideas, which
should be perceived by the beneficiary as Important. An ideal corporate gift is one
which the receiver would like to keep and cherish for a long time.

59
We help companies to appreciate people who do great work, because celebrating
great work inspires people to invent, to create, to discover. And wgen people are
inspired, companies grow.

Product lines :

 Apparel
 Caps and Hats
 Watches and Timepieces
 Drinkware
 Luxury gifts
 Business gifts
 Bags, Packs and Totes
 Funky gifts
 Eco friendly merchandise (Go Green)
 Writing Instruments
 Fun and games
 Desk and Stationery

60
Clients company store work for !

61
 METHODOLOGY FOLLOWED BY THE COMPONY

Given the range of challenges companystore is asked to tackle for their

clients every day, there is no single approach that works best for every
situation. But companystore bring a big-picture, insight-driven perspective.
And when necessary, they have the people, skills and expertise to go far
deeper than our competition.
The common-sense methodology we bring to every challenge reflects this
way of thinking. This is how we’ve earned the trust of some of the most
successful companies in the world.

62
63
 CHAPTER 6.
CORPORATE GIFTING-Introduction

INTRODUCTION

CORPORATE GIFT- INTRODUCTION

Corporate gifts are an important tool in the marketing communication mix. In the
corporate world, gift giving can be a double-edge sword (Pachter, 1995). If used
properly, they provide the company with a valuable means of strengthening
relationships with its key customers and employees, creating goodwill, fostering
new relationships and promoting the company’s business. A properly timed and
appropriate gift is one of the best ways of conveying the important message that a
relationship matters.

64
Verbal communication is soon forgotten but gifts with your company’s logo on
them form a reminder of your company to the customers for maintaining long term
relations and to the employees of the company too, to increase the sense of
responsibility and attachment among them.

A corporate gift can be anything from stationary to an all-inclusive Caribbean

holiday for two. The type of gifts used is limited only by the imagination.
A gift is given as a corporate gesture in recognition of business conducted or as
part of business to business promotion while incentives are products or schemes
perceived to be of relatively high value and typically used to reward staff or long
standing business customers. Companies that wish to purchase corporate gifts and
incentives can choose from a seemingly endless range of items, which can be
placed into three broad categories, based on the value of the item and purpose of
the gift –

➢ Give-aways, generally low value, high volume, less personal items that are
used mainly to promote a company’s name.

➢ Standard gifts, which suit most occasions of gift giving and cover a range of
prices, but always achieve a higher perceived value that “give-away” and are
presented in a more personal manner.

➢ Luxury gifts, that are high value, low volume items that address an
individual and carry prestige often based on strong brands.

The clear objectives that the company wants to achieve in gift giving include:
expressing appreciation for customers, creating brand awareness or enhancing the
company’s image, promoting new product or service, and motivating your own
staff. Corporate gifts are a kind of business investment. Business gift giving builds
65
on the foundation of reciprocity theory, which says that giving can lead to a
recipient’s perceived sense of obligation to return the favour.

One important objective to give a business gift is to keep the company’s name
on people’s mind(make the brand visible) .If a gift is “corporate”, it implies that
the company wants its name associated with gift and to use it as a permanent
reminder to the recipient. A truly corporate gift should be given not to an
individual but a company. In most cases a “corporate” gift is in fact a “personal”
gift as the recipient is normally a person.

As the old adage says, it is not the gift -it’s the thought that counts. An inexpensive
but meaningful gift will bear out a lavish but pointless one every time . Corporate
gifts should always be chosen with care and sensitivity. A gift is a very personal
thing but Corporate gifts, by definition, are impersonal.

Corporate gifts can have the personal touch .Today’s successful gifts tend to be
personalised or have a personal touch; they are more creative and more
memorable. people love to see their names in print, especially on something they
use frequently.

66
 WHY GIFTS ?
Every person has different reasons for working. The reasons for working are as
individual as the person. But, we all work because we obtain something that we
need from work. The something we obtain from work impacts our morale and
motivation and the quality of our lives. Some people work for love; others work
for personal fulfillment. Others like to accomplish goals and feel as if they are
contributing to something larger than themselves, something important. Some
people have personal missions they accomplish through meaningful work. Others
truly love what they do or the clients they serve.

Whatever your personal reasons for working, the bottom line, however, is that
almost everyone works for money. Whatever you call it: compensation, salary,
bonuses, benefits or remuneration, money pays the bills.

At a time when employee loyalty is considered as a quality that is increasingly

hard to find, firms are taking extra efforts to reward and recognize people who stay
with them for long.
There was a time when an employee would just be rewarded for a job well done.
And organizations over time have realized that rewarding the employee and
appreciating his/her work for a job well done helps boost one’s morale and helps
them excel on their projects. However, with the changing times and mindset of
India Inc., organizations have now realized that apart from boosting the morale of
the employees, rewarding them could also help in gaining their loyalty which in
turn can help in curbing the rising attrition.
Incentives help create positive emotion in the workplace, which greatly influences
commitment to a work task
➢ Recipients relive the special recognition and appreciate the organization that
honored them

67
 ➢ Items are memorable and reinforce the relationship between the reward
earner and the reward provider
➢ Awards appeal to the employees' higher needs thus increasing the
aspirational and in turn motivational value.
Always remember word of mouth is the best method of advertising. Companies do
not have control over consumers, but they do have access to their own employees.
And that’s why it becomes so important to keep them happy and never
underestimate them at any point and should leverage them to create a positive
impact of the company to the people at large.

CASH AND TANGIBLE AWARD’S

68
There are two ways of rewarding an individual. Some prefer cash rewards since the
bottom line, however, is that almost everyone works for money while some prefer
tangible rewards for their work appreciation as they last for longer period and has
higher recall value.

Cash rewards Tangible rewards

Purely an extrinsic motivator with little
emotional involvement; does not provide
lasting satisfaction and long-term
performance stimulation.
Creates expectations, leads to entitlement
and consequently looses its motivating
value.
A rupee is a rupee; participant attaches no
greater emotional or inspirational value to
cash. Lacks emotional impact of tangible
rewards; thus quickly spent and forgotten.
No "trophy" value to be a constant
reminder and continue to motivate. It is
difficult to show off; thus limits the
lasting impact of the reward.
Difficult to target a particular behavior
because of the lacking association with a
particular achievement.
Recipients often can't recall what they
purchased with cash reward which further
diminished its impact.
Carry a significant trophy value thus
continue to reinforce the good
performance and behaviors.
Provide tangible symbol of achievement
and serve as an encouragement to other
employees.
Reinforce the association with sponsor
company and thus increase loyalty.
Provide guilt-free enjoyment of reward
thus increase the motivating impact.
Both extrinsic and intrinsic motivators;
provide strong emotional appeal to
participants' personal wants and interests.
Carry a higher perceived value because of
the increased emotional attachment;
therefore, stimulate performance better
than cold cash.

Employees Gift Ideas –

69
Employees are considered as the real asset for the company. So it is important to
motivate them from time to time and boost their morale. And the best way to do is
by giving them gifts. Employee gifts are powerful tools that can improve
productivity, decrease employee turnover, and encourage teamwork in the
workplace. Big corporate giants spends a lot of money on employee motivating
programs because they find that the benefits more than pay for themselves.

Some of the gift ideas you can try out are you can gift your employee apparel like
shirt or t-shirt with the company name and logo. You can gift them branded apparel
with the company name. It is a gift they will really appreciate. You can gift them
cash cheque according to their performance but better to gift them something else
other than cash. You can go for apparel, electronics, gift sets or travel items, which
are more valuable and more memorable than cash. Gifts like wristwatches with the
company name engraved on it can also be given. Even wall clocks are also given
as gifts. If some employee has shown very good performance than you can gift him
or her a computer or a laptop. It will be a boosting for their morale. You can even
send them on a trip to some place for relaxation. It will help them to increase their
efficiency level. Other generic gift items you can opt for are pen set, office
stationary items, brief cases, bags, wallets and ladies purse with office name and
logo , diary, pen stand etc….

Among the other gift items and employer can gift are showpieces with office name
and logo. Even according to occasions gifts are given to employer like during any
festivals chocolate boxes, wine bottles, beer bottles, candies, cakes and cookies are
given especially during Christmas. If somebody is getting married that time special
gifts are given from the company side. Sometime for very good performance car
are also given to employees. Special movie shows are also arranged for all the
employees. Gifts in form of feast and party in good hotels are also arranged for the
employees. For good performance some employees are send on a foreign trip. So
there are various ways you can please your employees.

“The gifts should be custom made there by giving the personal touch and making
the employee feel like a part of the family. The company logo should be present but
if the employees name is also present it adds to the gift.”

70
FUNCTIONING OF A WEB STORE

71
 ATTRITION RATE AND CORPORATE GIFTING

At a time when employee loyalty is considered as a quality that is increasingly

hard to find, firms are taking extra efforts to reward and recognize people who stay
with them for long.
There was a time when an employee would just be rewarded for a job well done.
And organizations over time have realized that rewarding the employee and
appreciating his/her work for a job well done helps boost one’s morale and helps
them excel on their projects. However, with the changing times and mindset of
India Inc., organizations have now realized that apart from boosting the morale of
the employees, rewarding them could also help in gaining their loyalty which in
turn can help in curbing the rising attrition.

Since attrition rate among the employees is the main area of concern. So there
arises the need of Retaining quality talent. That might not be possible by
providing, monetary gains alone. It is quite evident that retention of quality is
possible only in organizations where there is strong focus on individual
development and growth opportunities. This is perhaps the primary expectation of
many individuals. They invest careers in organizations were there is significant
professional value appreciation over a period of time.
Many firms have excellent reward and recognition policies to acknowledge the
long tenure of the employee. Various rewards range from personalized gifts and
gift vouchers to dinner at luxury hotels or family holiday packages depending on
the experience with the firm. Experts agree that the most efficient strategy to retain
quality talents in providing an environment which cares about its employees. It
becomes important to strike a balance between fun and work while maintaining the
competitive edge among teams. Small achievements matter a lot both to the
individual and add towards the enhancement of the organization. Benefits have a
great intangible value to demonstrate how caring the organization is.
Rewarding a continued experience with an organization might make job hoppers to
rethink and stay long. Prioritizing employee recognition can ensure a positive,
productive, innovative organizational climate. Provide employee recognition to say
“thank you” and to encourage more of the actions and thinking you believe will
make your organization successful. People who feel appreciated are more positive
about themselves and their ability to contribute.
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 CORPORATE GIFTING – FUTURE IN INDIA
Breaking into the competitive corporate gift industry is easier said than done! It is
all about ideas for giving a great gift and winning over the people who work for
you and whom you work for. No doubt, corporate gifting is a highly competitive
and crowded field.
Every body in India and around the world enjoys receiving a gift. In a vast country
like India, where different festivals are celebrated with great enthusiasm and
fervor, gifting plans need to be ever-evolving and all encompassing. They need to
match the joy and spirit of even an important regional festival. This will largely
depend on the location of any organization. There are so many ways in which
captivating corporate gifts can be designed.
It’s the spirit of the occasion and not the price tag that counts! This is where the
research and knowledge factor comes into play.
An understanding of factors such as budget constraints, timeliness of a gifting plan,
correct choice of occasion, relevant theme for gifting is essential. The success of a
corporate gifting business is not merely about the “art of selling’. It’s more to do
with discovering the ‘joy of gifting’ them.
In today’s tough times, when loyalty and commitment can be a bit too much to ask
for, owing to lack of hazy business prospects; appreciating the employees by gift is
a good choice. Giving impressive and stylish gifts create a favorable impression.
These can create awareness, build goodwill or communicate a message. These
prime benefits of gifting gave rise to the trend of corporate gifting in India.
The Indian gift market is growing vigorously. The trend of gifting is an age old
tradition but earlier gifts were restricted to sweets and chocolates. Today, the
market if flooded with multitude of gift articles. Companies use these gifts articles
as a tool for advertising and promoting their business. Corporate India has beaten
the corporate gift market with an estimate of Rs 100 crore. It has become one of
the dynamic industries that contribute a major share to the country’s economy.
The future of Indian corporate world is shinning bright and the trend of corporate
gifting is expected to beat the western market in the coming years. The main aim
of corporate gifting in India, is brand recognition, brand building and brand
performance. If you want to strengthen your customer /employee base then
corporate gifts are the best solution.

6 Important Keys to Corporate Gifting Success

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➢ It is always best to give a gift that is personalized, but
not too personal as it may create a misunderstanding.

➢ Occasions : Send a gift on an unexpected occasion.

➢ Key Dates : Identify the key dates of your clients. For

example, send gifts to your clients on their birthdays,
anniversaries or some important and special days.

➢ Image Building : Putting a logo on the gift is very important

but it should be done in a scuttle manner making the gift
more presentable.
Corporate gifting is a great way to say thank you and also to
promote business, products or services, to show respect, to
express an apology, over all it helps to enhance companies
image and reputation .

➢ Right Choice : Choose an appropriate gift that suits the

recipient’s taste and preferences and not yours.

➢ Small Note : a personal note or a card to accompany the

corporate gift. Hand written notes are much preferred.

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 CHAPTER 7.
DATA ANALYSIS
&
INTERPRETATION

DATA ANALYSISAND INTERPRETATION

Sample taken = 50
Finding 1.
Preference as reward and recognition –
➢ Cash.
➢ Tangible Goods.

Table 1.
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 Type of Reward Number of Respondents
Cash 34
Tangible Goods 16

Graph 1.

Interpretation.-
From the above table and graph shown it is inferred that among the group of
respondents, more than 70 % preferred cash as an mode of rewarding employees in
comparison to any tangible goods being offered to them.

Finding 2.
Preference among the tangible goods -
➢ Customized Goods.
➢ Off-the-shelf Goods.

Table 2.
Type of Tangible Rewards Number of Respondents
Customized 41
Off-the-shelf 9

Graph 2.

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Interpretation –
From the above table and graph shown it is easily inferred that the customized
products are preferred among the set of respondents as compared to off-the-shelf
products as an reward and recognition.
Finding 3.
Importance of featuring company’s logo/Name in which individual is working
➢ Essential.
➢ Quiet Important.
➢ Not Important.
Table 3.
Logo /Name of the Number of respondents
organization
Essential 35
Quiet Important 12
Not Important 3
Graph 3.

Iterpretation-
Around 70 % respondents preferred company’s Logo/Name to be featured on the
gifts.
24% gives importance to featuring it but not necessary.
6% respondents doesn’t give any importance at all to feature company’s name and
logo.
Finding 4.
What types of goods do you tend to look for as a gift ?
➢ A mixture of gifts to suit the different needs.
➢ Low Value .
➢ High Value.

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Table 4.
Type of Goods Number of respondents % of respondents
Mixture of gifts 42 84%
Low valued - -
High Valued 8 16%

Graph 4.

Interpretation –

From the above interpreted graph and table it is clearly shown that the mixture of
goods that suits the different needs of employees is preferred most rather than high
valued gifts and low value Items.
➢ 84 % respondents favors the gifts that suits different needs.
➢ 16 % go with high value gifts.
➢ No respondents favored low valued gifts.

78
Finding 5.
What is the key role of gifts and incentives ?
➢ Enhancing the company image.
➢ Engender goodwill.
➢ Reate loyalty.
➢ To cement existing business client/employee relation.
➢ Increase brand awareness.

Table 5.
Role of gifts and Incentives Number of respondents
Enhancing company’s image 9
Engender goodwill 7
Create loyalty 10
Cement existing relationship -
Increase brand awareness 24

Graph 5.
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Interpretation – It is clear from the above table and graph shown that the major
role of gifts and incentive is to create brand awareness.

80
Finding 6. Do you feel that corporate gifts and incentives achieve their purpose
and objectives ?
➢ Always
➢ Sometimes
➢ Not very often.

Table 6.
Purpose and objective’s Number of respondents % respondents
Always 15 30%
Sometimes 24 48%
Not very often 11 22%
Graph 6.

Interpretation –
From the above table and graph shown, it is interpreted that around 30 %
respondents think that rewarding fulfills its objective.
Majority of respondents are in state of confusion, whether objective of rewarding
are achieved or not.

81
FINDING 7 . What do you think the main reason behind recession in economy?
➢ Due to US political backlash.
➢ Declining in dollors in comparison to rupee
➢ Credit Crunch.

TABLE 7.
OPTIONS Number of %percentage
Respondents
Due to US political backlash 8 16%
Declining in dollars in 19 38%
comparison to rupee
defaults on sub-prime 23 46%
mortgages(Credit crunch)

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GRAPH 7.

Inference :- From the above table it is clear that 38% of BPO respondents say that
the main reason behind recession in economy is due to declining in dollars in
comparison to rupee and 16% of the respondents say that due to political backlash
and the majority i.e. 46% respondents say it is due to defaults on sub-prime
mortgages(Credit crunch). So from the analysis it is identified that the recession in
economy is due to recent credit crunch.

83
FINDING 8. Why the tax rate is increasing rapidly?
➢ Due to inflation.
➢ Due to economy boom .
➢ Due to government official .
TABLE 8.
Option No. of % Percentage
Respondents
Due to Inflation 26 52%
Due to economy boom 15 30%
Due to government 9 18%
official

GRAPH 8.

Inference :- As many as 52% of the respondents say that due to inflation the tax
rate is increasing rapidly, 30% say due to economy boon, 18% say that it is due to
government officials. So it is identified that most of the respondents say due to
inflation the tax rate in increasing.

FINDING 9. what attracts the most to the youth to join BPO ?

➢ Financial Independence .
➢ Flexibility of Timings .
➢ Attractive lifestyle and culture .
➢ Education level doesn’t matter .
TABLE 9.

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 Option No. of Respondents % Percentage
Financial Independence 24 48%
Flexibility of Timings 4 8%
Attractive lifestyle and 14 28%
culture
Education level doesn’t 8 16%
matter

GRAPH 9.

INFERENCE :-
From the above table it is clear that 48% of the BPO respondents say that the
reason behind joining BPO’s is because of financial independency. They need not
to dependent on someone for their expenditure’s, 28% of them say it is due to
attractive lifestyle and the culture practiced ,16% of them say it is because for
joining the BPO’s education level doesn’t matter at all, one can join BPO just after
12th and 8% says that its flexible timing that attracts them most to join BPO. So it
is identified that most of the respondents say it is due to salary i.e. Financial
Independence.

85
 RECOMMENDATION’s

Recommendations for India's BPO industry :-

1.) A rebranding exercise

India should no longer be presented as a cost-effective destination alone, but one
that is driven by skills and quality. The industry is however, still in its nascent
stages of consolidation and needs to rebrand itself in terms of value addition,
competition and innovation.
2.) A conscious effort towards sound infrastructure
Public and private investment in infrastructure with all concerned bodies adopting
a customised approach to meeting the needs of the BPO industry.
3.) Setting the benchmark for information security
Public and private partnerships need to be developed in strengthening the courts
understanding of security issues.
In addition, a robust and effective mechanism needs to be implemented for
information sharing among industry, government and other interested parties.
Timely dispensation of justice, including concrete alternative dispute resolution
mechanism is also an imperative.

86
Industry and the government must work together to make legally viable standards
of due diligence.
4.) Staying on top of technology
India's scientific and research establishments should be encouraged to devote
greater attention to the new class of technology that is emerging to enable secure
and increase efficiency of remotely delivered services. Private investment should
be encouraged in development and commercialisation of technology.

5.) Availability of risk capital and flexibility in taxation

Credit institutions need to develop customised norms for the BPO industry. The
availability of risk capital needs to be enhanced in early stage ventures.
Third party hosted infrastructure BPO companies should be eligible to favourable
tax treatment afforded to the infrastructure sector.
6.) Raising the bar for education system
Industry in association with management schools should develop BPO specific
graduate level programmes for mid-management and modify curriculum and the
quality of instruction in entry-level educational institutions.
Technical institutions should develop competency around the specialised
technology required for the BPO industry.

Recommendations regarding corporate gifting :-

In spite of more high-end processes being outsourced to India and security issues
being addressed, India's 'sunshine industry' has been going through rough waters. It
has been facing daunting challenges like attrition as high as 20-80 per cent and an
imbalance in the demand and supply of skilled and talented workforce.
There has been started the corporate gifting culture and its gaining importance in
appreciating employees as well as clients for their work which motivates them
towards better results and increased efficiency.
All of the business gifts range can be engraved with your corporate message or
promotional image allowing you to really create a special corporate gift which will
help your company to stand out.
There is no single gift that will serve the purpose across the line. Hence, right like
all other corporate activities are strategised and planned even ’’ Corporate gifts’’
should be well planned. I think that it is crucial to send gifts to your employees
87
and important clients just as a small token to show them that you care and you
appreciate them.
It is very clear from the research, that Tangible gifts i.e. something that is of use
to them on a day to day basis effects the most since, every time they take it out
they will remember that you gave that to them.
Decide on the budget ( the amount you want to spend on the gift) ,the relevance of
occasion and the kind of relationship ( Whether a Business prospect,a senior
employee ,Boss , colleague , a Business visitor,whether a Non-Indian
( nationality ) or is it a relative of direct business accomplice).
Office related things that are mostly given to the office going corporate. So
though expensive I think all good companies have to resort to it.
Try to be creative in your gifts .
In nutshell - Have a separate gifting policy.
Gifts are not the end :-

Gifts are given to make the receiver feel ’made my day’ kind of good feeling. The
longer the gift remains in the other party’s often short-term memory the better for
your business.

But the Gifts themselves are not the end in themselves when it comes to building
lasting business relationships. It is almost like dating a girl. One need to often take
them out for dinner, entertain them in five star hotels & your house. Build a
personal rapport with them etc. etc.

But gifts are a decent way to start with like a red rose on valentines day.

BIBLIOGRAPHY
88
 ➢ Google.com

➢ Bpoindia.org

➢ go4bpo.com

➢ Indianbposolutions.com

➢ Business Today

➢ Daily Newspapers- TOI, HT, DH.

Questionnaire
Dear Sir/Madam,

89
 I am a student of International School of Business and Research undertaking “an
research study on use of corporate gifting culture in BPO/IT Industry”. This
exercise is a part of our curriculum. I would be obliged if you could provide me with
some of your valuable time to answer a few question’ss.

Name - …………………………………………..

Organization - ……………………………………

Designation - ……………………………………..

Email-Id - …………………………………………

Contact No.- ………………………………………

( 1.) What do you think is the main reason behind outsourcing the processes ?

a) Cost Cutting [ ] b.) Improving efficiency and productivity [ ] ,

c.) Tofocus core competencies [ ] d.) Outside expertise [ ].

( 2.) What do you think is the main reason behind India being the #1 BPO
destination ?

a) Pool of human resources [ ] b.) English speaking peoples [ ]

c.) Infrastructure [ ] d.) Cost effectiveness [ ]

( 3.) Who among these countries is the biggest threat to Indian BPO Industry ?

a) Phillippines[ ] b.) China [ ]

c.) Russia [ ] d.) Russia [ ]

( 4.) what attracts the most to the youth to join BPO ?

90
 a) Financial Independence [ ] b.) Flexibility of Timings [ ]

c.) Attractive lifestyle and culture [ ] d.) Education level doesn’t matter [ ]

( 5.) What do you think the main reason behind recession in economy?

a) Due to US political backlash [ ] b) Declining in dollars in comparison to rupee [ ]

c) defaults on sub-prime mortgages(Credit crunch)[ ]

( 6.) Why the tax rate is increasing rapidly?

a) Due to inflation [ ] b) Due to economy boom [ ]

c) Due to government official [ ]

( 7.) What do you prefer as reward and recognition –

a.) Cash [ ] b) Tangible Goods [ ]

( 8.) What do you prefer –

a.) Customized [ ] b) Off-the-shelf [ ]

91
( 9.) How important is it that gifts feature your company’s logo/Name ?

sa.) Essential [ ] b) Quite Important [ ] c.) Not Important [ ]

( 10.) What type of goods do you tend to look for as a gift ?

a.)Amixture of gifts to suit the different needs.[ ] b) Low Value

c) Due to government official [ ]

( 11.) What is the key role of Gifts and Incentives ? (Select One)

a) Enhancing the company Image. [ ]

b) Engender Goodwill. [ ]
c) Create loyalty. [ ]
d) To cement existing business client/employee relationship. [ ]
e) Increase brand awareness. [ ]

(12.) Do you feel that corporate gifts and incentives achieve their purpose/objective ?

a) Always [ ] b.) Sometimes [ ] c.) Not very often [ ]

Thank You again for your time and sharing valuable information, experiences and views.

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