Course name: MIS and Decision Making Techniques

Course code: MIS5122

Title of the Report

Business process outsourcing

Title of the Report

Business process outsourcing

Prepared by:
Name: Md. Ariful Islam
ID: 2015210004083
Name: Kazi Shahinur Rahman
ID: 2015210004082
Section: 3
Department: MBA
School of Business Studies
Southeast University

Prepared to:
Teacher Name: Rashedul Hasan
Designation: Lecturer
Department: MBA
School of Business Studies
Southeast University

Date of Submission: 19-01-2016

Letter of Transmittal
January 19th, 2016
To
Rashedul Hasan
Lecturer
School of Business Studies
Southeast University
Subject: Submission of the report on Business process outsourcing.
Dear Sir.
Here is a report on Business process outsourcing. This assignment was assigned to me for
the purpose of fulfillment of MIS and Decision Making Techniques Course. I have tried to
collect the information to make my respect specific. Through the user of preparing this report
i have developed a clear understanding about MIS and Decision Making Techniques. I tried
my level best to make this report as reflective as possible. I appreciate to provide any
information or classification if necessary. Each aspect is considered and studied as required
and as per direction of this course instructor.
I would like to thank for assigning me such a responsibility and helping me on different
aspects of the assignment.

Sincerely,
Md. Ariful Islam - 2015210004083
Section: 3 Program: MBA (1 Year)
School of Business Studies
Southeast University

Acknowledgement:
First of all i would like to thank the Almighty for giving me the time, patience, energy and
will power to finish this assignment. Then i would like to thank my course lecturer Rashedul
Hasan for making us do this assignment. While doing this assignment my gained quite some
knowledge in this field. Next i also like to thank who bore the pain of finishing this
assignment. Last but not the least i would like to thank my family members who have
suffered my late night nuisance while finishing this assignment. Thank you all.

Executive Summary:
Business process outsourcing (BPO) is the buzzing word now-a-days;
means subcontracting of works to aired third party service provider. Its
becoming more & more popular day by day because it is offering less cost & high quality
service and many other operational, technological & financial benefits. And Information
Technology Outsourcing (ITO) is the most booming area of outsourcing which is precisely
three forth of the total outsourcing industry.
All the research organizations, specialists & futurists are sure about the fast forward move of
the Information Technology Outsourcing. Most of the fortune 1,000 companies are tending to
go for outsourcing. In developed world nearly half of all businesses use offshore providers,
and two-thirds plan to send work overseas in the near future. So, the future of this business is
very bright.
IT Outsourcing is very much advantageous as a small business than many other businesses.
Its easy to finance. It has advantage on tariff, transportation, infrastructure & location,
availability of workforce, HR hiring & training cost, and legal requirements. Besides, it gets
tax exemption, govt. incentives & stable government support. Moreover, it can use the
women workforce rapidly & has a high success rate. So, it is the perfect time for our
entrepreneurs to grab this business which costs little but earns a lot.

Contents
Letter of Transmittal....................................................................................................................i
Acknowledgement:....................................................................................................................ii
Executive Summary:.................................................................................................................iii
Chapter 1: Introduction..............................................................................................................1
1.1 Business Process Outsourcing:........................................................................................1
1.2 Objective:.........................................................................................................................3
1.3 Methodology:...................................................................................................................4
Chapter 2: Body of the Assignment...........................................................................................6
2.1 What is outsourcing?........................................................................................................6
2.2 Benefits of Outsourcing:..................................................................................................6
1. Get access to skilled expertise........................................................................................7
2. Focus on core activities..................................................................................................7
3. Better Risk Management................................................................................................7
4. Increasing in-house efficiency.......................................................................................7
5. Run your business 24X7................................................................................................8
6. Staffing Flexibility.........................................................................................................8
7. Improve service and delight the customer......................................................................8
8. Cut costs and save BIG..................................................................................................8
9. See an overall increase in your business........................................................................8
2.3 BPO is the process of hiring another company to handle business activities:.................9
2.4 BPO Service Examples:.................................................................................................11
1. Customer Support Services..........................................................................................11
2. Technical Support Services..........................................................................................11
3. Telemarketing Services................................................................................................11
4. Employee IT Help-desk Services.................................................................................12
5. Insurance Processing....................................................................................................12
6. Data Entry Services / Data Processing Services..........................................................13
7. Book Keeping and Accounting Services......................................................................13
8. Internet / Online / Web Research.................................................................................13
2.5 BPO Almost Everywhere:..............................................................................................14
1. BPO appears to be an all inclusive term that covers everything..................................14
2. BPO- Industry Segment:..............................................................................................14
2.6 Disadvantages of Outsourcing:......................................................................................14
1. Loss of Managerial Control..........................................................................................14

2. Hidden Costs................................................................................................................15
3. Threat to Security and Confidentiality.........................................................................15
4. Quality Problems..........................................................................................................15
5. Tied to the Financial Well-Being of another Company................................................15
6. Bad Publicity and Ill-Will............................................................................................15
2.7 Business Process Outsourcing in Bangladesh:...............................................................16
2.8 The Future of Outsourcing in Bangladesh:....................................................................17
1. Bangladesh role in the outsourcing industry................................................................18
2. Opportunities for the Bangladeshi Outsourcing Industry............................................19
3. Opportunities for Bangladesh in terms of outsourcing are:.........................................19
4. Bangladesh will face some new emerging challenges, such as:..................................20
2.9 Top ten Strategic Recommendations for Negotiating an Outsourcing Transaction:......21
1. State Your Expectations Clearly...................................................................................21
2. Get Negotiating Leverage as Early as Possible............................................................21
3. Nail down Your Performance Metrics Clearly Up Front.............................................22
4. Understand What Service Level Agreements (SLAs) Really Are................................22
5. Often Ignored Transition services: Entrance and Exit of a service provider...............22
6. Defining Services Precisely to Avoid Loopholes.........................................................22
7. Dont Ignore the Importance of Service Provider Personnel.......................................23
8. Give Due Attention to Relationship Management.......................................................23
9. Fees and Expenses Plug Up Back Door Expense Gouging......................................23
10. Termination of Relationship.......................................................................................23
2.10 SWOT Analysis for BPO:............................................................................................24
Chapter 3: Termination.............................................................................................................25
3.1 Conclusion:....................................................................................................................25
3.2 Bibliography.......................................................................................................................26

Chapter 1: Introduction
1.1 Business Process Outsourcing:
It is the delegation of one or more of IT intensive business processes to an external provider,
which in turn owns, manages, and administers the selected processes based on defined and
measurable performance criteria. (Saha, 2013)
Business Process Outsourcing (BPO) is defined as the delegation of one or more business
processes to an external provider who, in turn, owns administrate and manages the selected
processes based upon defined and measureable performance matrices.
BPO as per the work performed can be classified as VOICE BASED, which includes
customer related services such as technical support, marketing etc. and NON-VOICE, which
includes internal business operations. And as per the location involved it can be classified as:
ON-SHORE: BPO that is contracted inside a companys country.
NEAR-SHORE: BPO that is contracted to a companys neighboring country.
OFF-SHORE: BPO that is contracted outside a companys country.
The trend in outsourcing continues to grow both in the number and value of outsourcing
transactions and in the variety of services which are outsourced.

The pressures which lead organizations to outsource show no signs of slackening and cost
savings remains a major incentive. However, other factors are increasingly influencing the
decision to outsource access to innovation, increased speed to market, and service quality
are proving equally as important as cost savings.

As the value of transactions has increased, so too has the range of outsourced services. Most
non-core services which organizations have traditionally provided internally IT, finance and
accounting, HR and property management - are now commonly outsourced. The locations
from which services are provided have also changed the attraction in outsourcing to
offshore locations such as India has soared.
Reports show that the fastest growing sectors are business process outsourcing and business
process management. For many large IT suppliers outsourcing and process management are
one of the few areas to have flourished in the difficult market of recent years. (Saha, 2013)

1.2 Objective:
Business process outsourcing (BPO) is the act of assigning part of a business process to a
third party on a repeated basis. It differs yet is similar from Proper Employment and Outtasking.
The outsourcing process has the aspect of employing a third party to perform an assigned task
without the liabilities from "labor laws." This third party may be within the same country as
you or be from a country a thousand or tens of thousand miles away from you. With this, you
can easily terminate your relationship with such party without immediate legal precautions
from the "labor laws" if they fail to meet your standards. If they meet your standards or if you
are satisfied with their performance, you can again engage a contract with them to do another
assigned task, preferably of similar nature.
The outsourcing process enables to enjoy having a reliable "regular employee" without the
hassle of answering to the boundaries and rules set by the "labor laws." You can continuously
assign tasks to this third party and expect results from them as you would be expecting from
one of your regular employees. However, if you feel that they are not able to perform such
assigned tasks and meet your standards, you can easily terminate your relationship with them.
Outsourcing therefore has two primary objectives:
To get better results for the same or slightly higher cost.
To get labor at reduced cost but get the same or slightly better results.

1.3 Methodology:
Business process outsourcing methodology is very structured and helps us to arrive at the
optimal solution for our clients. It is a loose collection of business process models. These
process models can either be applied to entire project or any one phase of the project. The
major advantage of our BPO process models is easy to understand as well as apply and
maintain. It is very flexible as it can be adapted for an IT project as well as other business
processes. It provides a focused and common language for both customers and suppliers.
Our transition management support model has been tested and updated with the required
formats, tools and guidelines so that the risks involved in customer process transition is
reduced as much as possible. The project management system is well coordinated and
documented so that all critical client information is incorporated to assist the transition team
in all important business processes.
Broadly speaking, there are four main steps involved in our BPO methodology. They are:

ASSESSMENT- Our team of experts analyzes the business process that is outsourced to
us. We identify the exact processes that are outsourced, calculate the risks for these
projects and develop the business process for the client.
TRANSITION- This again consists of several steps. The first and foremost is knowledge
transfer. Here operating procedures, documents and in some cases executives are prepared
for process execution. The next step is technology transfer. This tests if the existing
4

infrastructure is adequate for the project and adds any new ones that are required for the
project. Finally in order to start operations, process executives are recruited or trained as
need be.
PARALLEL RUN- Here the successful migration of the business process to offshore
location is tested. While doing this however, care should be taken that no interdependent
process is disturbed.
STEADY STATE OPERATIONS- This is the part where the flow of BPO services is
maintained without interruption. The second aspect of this step is to update the business
process outsourcing services as per and in collaboration with client requirements.
(BPO-methodology)

Chapter 2: Body of the Assignment

2.1 What is outsourcing?
Outsourcing is an arrangement in which one company provides services for another company
that could also be or usually have been provided in-house. Outsourcing is a trend that is
becoming more common in information technology and other industries for services that have
usually been regarded as intrinsic to managing a business. In some cases, the entire
information management of a company is outsourced, including planning and business
analysis as well as the installation, management, and servicing of the network and
workstations. Outsourcing can range from the large contract in which a company like IBM
manages IT services for a company like Xerox to the practice of hiring contractors and
temporary office workers on an individual basis.

Outsourcing is often characterized as having 3 distinct phases:

The customer transfers the existing service to the service provider
The services are provided by the service provider
Termination/expiry, which may involve either. (earchcio)

2.2 Benefits of Outsourcing:

Outsourcing, in its early days, seemed possible only by larger companies which farmed out
many low-end business processes. Since then, outsourcing has become more of a norm than
an option. Apart from the cost savings, outsourcing is seen as a strategic move that can allow
businesses to gain a competitive advantage.
It certainly has opened up opportunities for organizations to utilize skill sets and expertise
that they normally would not be able to access without large investments. It has also become
a savior to startups and small businesses which have to work with modest capital.
At the lower end of the spectrum, outsourcing back-end jobs such as data entry/ processing,
customer support, payroll processing etc. have helped organizations save a staggering amount
of money. Now, there are service providers across the globe who specialize in simple backoffice services to high-end services like manufacturing design and legal outsourcing, to name
a few.
1. Get access to skilled expertise
One of the primary reasons why a business may want to outsource a task is when it requires
skilled expertise. This skill set may not be a core competency of its business. To allow you to
focus on your core mission in providing a high quality product and service to your customer
what makes sense is off shoring the task to people can perform it better. Moreover, as a
double whammy, you not only spend less on employee trainings and save precious man-hours
but cut costs as well. Outsource has dedicated teams to provide wide range of outsourcing
services, which help us offer specialized business process outsourcing solutions to clients
7

globally. We leverage on our multi-domain expertise and skills across variegated industry
verticals and technologies to achieve superior quality and unmatched proficiency in the
outsourced process.
2. Focus on core activities
Workload increases with additional non-core functions and the quality of your core activities
suffers as your business grows. Outsourcing in such scenario to a third party plays an
important role by allowing your key resources to focus on primary business tasks.
3. Better Risk Management
Outsourcing will allow you to share any associated risks with your outsourcing partners there
by reducing your burden. For example - by outsourcing to a competent outsourcing partner
you reduce the risk involved in having the same task done in-house by staff that may not be
as competent in that field.
4. Increasing in-house efficiency
After you allocate tasks to your outsourcing partner, they share the workload of your
employees. This allows you to develop your internal task force and use them more efficiently.

5. Run your business 24X7

Offshore outsourcing to a country like India, which is on a different time zone, gives you the
added advantage of making full use of your 24 hour day. Since your night is their day, your
outsourcing partner can take over and continue your work even after your employees go
home and to bed. They can complete critical tasks and send it back for your review the next
day. So the benefit of outsourcing here is that you get more work done in a day, increasing
your overall productivity. A 24X7 customer support is a dream come true for your customers
and this can be fully realized through offshore outsourcing.
6. Staffing Flexibility
Outsourcing certain independent tasks, allows your business to maintain a financial flexibility
when there is an uncertainty in demand. You can scale up or down comfortably. At a much
lower cost, offshore outsourcing provides additional benefit of running your business in full
throttle even during off season and holiday months.
7. Improve service and delight the customer
Your outsourcing partner, with their skilled expertise will produce quality deliverables faster,
increasing your turn around time to the customer. With on-time deliveries and high-quality
8

services your customers will be delighted! Outsourcing can help you benefit from increased
customer satisfaction and thus creating a stream of loyal customers.
8. Cut costs and save BIG
All the benefits listed above come with the bonus benefit of lower cost and big savings!
When you outsource services like medical billing, call center and teleradiology, etc. to a lowcost country like India or Philippines, you are getting access to quality services that are
offered at a much lower cost (You can save up to 60% costs)! Read our well researched
article on - Preferred Outsourcing Destination - India or Philippines, to know how India fares
in comparison to Philippines.
9. See an overall increase in your business
Outsourcing shows an increase in your productivity, customer loyalty. level of quality,
business value, profits, and much more. (The Benefits of Outsourcing)

2.3 BPO is the process of hiring another company to handle business activities:
Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting
of the operations and responsibilities of specific business functions (or processes) such as
payroll, customer service, accounting, data recording and much more to a third-party service
provider. (kumawat)
Our talented team provides 24* 7 supports across industries and geographic locations.

BPO factors like economy of scale, business rick mitigation and cost advantage our BPO
services standouts on all these factors. Our strength lies in our people who are talented, smart
9

and multi-lingual & goal oriented who works with extreme dedication and passion under
extreme pressure conditions. Our Subject Matter Experts creates right solution for you and
helps you in find smarter solutions for better operations.
We provide end to end solutions for our clients in the areas across various industries:

Insurance

Health Care

Manufacturing

Banking and Financial Services

Telecom

Media & Publishing

Construction

Few of our BPO offerings are listed below:

Technical Support

Customer Support Services

Back Office & Shared Services

High Tech

Financial Services

Analytics Services

Translation Services (vigyan)

10

2.4 BPO Service Examples:

1. Customer Support Services

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

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.
Customers calling to resolve other problems with their products.

11

3. Telemarketing Services
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.
Outbound calling to sell credit or debit cards etc.

4. Employee IT Help-desk Services

System problem resolutions related to desktop

Notebooks, OS, connectivity etc.
Office productivity tools support including browsers and mail.
New service requests.
IT operational issues.

12

5. Insurance Processing
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, and Customer care service via voice/email etc.

6. Data Entry Services / Data Processing Services

Data entry from Paper/Books with highest accuracy and quick.

Data entry from Image file in any format .
Business Transaction Data entry like sales / purchase / payroll.
Data entry of E-Books / Electronic Books.
Receipt and Bill Data Entry etc.

7. Book Keeping and Accounting Services

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

13

8. Internet / Online / Web Research

Internet Search.
Product Research & Market Research.
Survey, Analysis.
Web and Mailing list research etc. (kumawat)
2.5 BPO Almost Everywhere:
1. BPO appears to be an all inclusive term that covers everything

Medical transcription
Animation
Power point presentations
Equity research
Contract research
Call centres
Collections
IT Help desk
Internet chat
Customer service
Transaction processing
Travel bookings
Accounting
etc. etc. etc. (kumawat)

2. BPO- Industry Segment:

Banks
Insurance
Asset management
Manufacturing
Healthcare and Pharma
IT
Telecom
Travel agencies
Airlines
14

 Governments
2.6 Disadvantages of Outsourcing:
1. Loss of Managerial Control
Whether you sign a contract to have another company perform the function of an entire
department or single task, you are turning the management and control of that function over
to another company. True, you will have a contract, but the managerial control will belong to
another company. Your outsourcing company will not be driven by the same standards and
mission that drives your company. They will be driven to make a profit from the services that
they are providing to you and other businesses like yours.
2. Hidden Costs
You will sign a contract with the outsourcing company that will cover the details of the
service that they will be providing. Anything not covered in the contract will be the basis for
you to pay additional charges. Additionally, you will experience legal fees to retain a lawyer
to review the contacts you will sign. Remember, this is the outsourcing company's business.
They have done this before and they are the ones that write the contract. Therefore, you will
be at a disadvantage when negotiations start.
3. Threat to Security and Confidentiality
The life-blood of any business is the information that keeps it running. If you have payroll,
medical records or any other confidential information that will be transmitted to the
outsourcing company, there is a risk that the confidentiality may be compromised. If the
outsourced function involves sharing proprietary company data or knowledge (e.g. product
drawings, formulas, etc.), this must be taken into account. Evaluate the outsourcing company
carefully to make sure your data is protected and the contract has a penalty clause if an
incident occurs.
4. Quality Problems
The outsourcing company will be motivated by profit. Since the contract will fix the price,
the only way for them to increase profit will be to decrease expenses. As long as they meet
the conditions of the contract, you will pay. In addition, you will lose the ability to rapidly
respond to changes in the business environment. The contract will be very specific and you
will pay extra for changes.

15

5. Tied to the Financial Well-Being of another Company

Since you will be turning over part of the operations of your business to another company,
you will now be tied to the financial well-being of that company. It wouldn't be the first time
that an outsourcing company could go bankrupt and leave you holding-the-bag.
6. Bad Publicity and Ill-Will
The word "outsourcing" brings to mind different things to different people. If you live in a
community that has an outsourcing company and they employ your friends and neighbors,
outsourcing is good.

2.7 Business Process Outsourcing in Bangladesh:

The country has the potential to create over 200,000 direct and 50,000 indirect jobs and earn
about $5 billion annually through Business Process Outsourcing (BPO) - a way of doing
business through a third party. Some 30,000 freelancers in the country are now working
through micro sourcing platforms like freelancer, oDesk, e-Lancer and Guru. This industry
could have a great economic impact. Almost 70 per cent of the earnings go away for paying
salary alone in the US companies. So they are increasingly becoming interested in BPO deals.
BPO helps increase a companys flexibility and achieve growth targets avoiding various
bottlenecks and ensures cost reduction.

Giant companies of developed countries are

increasingly making business functions through offshore outsourcing in the developing

countries. At present India earns US$ 50 billion and generates two million jobs. Sri Lanka
and the Philippines are also doing sizeable business creating big size local employment. This
outsourcing business started back in 2008 and it is still in infancy in Bangladesh. The cost of
wages is much cheaper in Bangladesh than in many other Asian countries. Average wage is
$30 an hour in the European countries while in India and Philippines it is $20 and $15
respectively, which is only $8 in Bangladesh.
Traditionally, Bangladeshi workforce has quick learning ability and is well known for strong
abilities in mathematical and logical analysis. Bangladeshi students regularly come out as
winners in a number of programming and mathematical competitions globally. Despite
having so much potential, the country is still lagging behind due to the lack of a speedy and
uninterrupted Internet service and other ICT-related infrastructures. The authorities concerned
should take steps to develop world class ICT-relevant IT and communication infrastructures.
But as of rule, the business leadership should come from the private sector and the state
should be the facilitator only. (Rahman, 2015)
16

2.8 The Future of Outsourcing in Bangladesh:

The Bangladesh IT industry, despite being a new industry, represents a tremendous

opportunity to meet various IT needs of international companies around the world. In the last
five years, the IT industry of Bangladesh has shown a considerable growth with an average
yearly growth with an average yearly growth rate of over 40% in Software and ITES sectors.
Due to increased interactions with international IT community, the IT sector of Bangladesh
has already drawn significant attention and has been positively highlighted in different
mediums around the world. For instance, Gartner has listed Bangladesh as one of the top 30
global outsourcing destinations. The European Commission also has recently included
Bangladesh as one of the top IT outsourcing destinations in the world. Odesk Corp. one of the
leading online marketplaces of outsourced works has ranked Dhaka, the capital of
Bangladesh, as the top 3rd city amongst the global cities as an outsourcing destination. The
strong human capital in the IT industry coupled with growing support from the government
and the geographical location of the country, clearly paves the way of Bangladesh to be seen
as a probable it hub in Asia.
Having this success in outsourcing today, with outsourcing being the top business trend, the
biggest question on everyones mind is: what will the future of the outsourcing industry look
like in the next 10 or 20 years? Though Bangladesh has managed to position itself as a major
outsourcing hub, questions about its future in outsourcing continue to surface in industry
circles. The dynamics of global business are changing, and outsourcing is no different.
Buyers will seek more standardized solutions from their outsourcing engagements, so they
will have to differentiate themselves through performance rather than pricing. Hence pricing
17

structures will be stabilized to some extent. Many small alliances, focused on increased
operational efficiencies, better quality control and reduced back-office costs, are being set up.
This trend is going to continue.
Shared and common services were always considered a threat to outsourcing, but the trend is
changing. Sharing critical business and IT services has been proven to cut costs, reduce errors
and improve productivity. Industry experts predict that Latin America and Europe will be the
new outsourcing destinations in the near future. Brazil and Russia will make their presence
felt in the global outsourcing market and China will continue to move ahead. The rising price
of oil will put pressure on companies to take advantage of technology and outsource work to
remain profitable.
According to industry experts, consumption-based technologies that are delivered through the
cloud will grow, as they are cost effective. Some analysts predict that European carmakers
will start outsourcing their business. This would result in cars being developed by other
companies while being sold under their brand names. Big pharmaceutical companies will
launch new drugs in the market at a fraction of the current cost by partnering with India,
China, and Russia in molecular research and clinical testing so Bangladesh could be the next
here.

1. Bangladesh role in the outsourcing industry

Bangladesh continues to be the major destination for outsourcing because it has been able to
evolve with changing needs. BASIS (Bangladesh Associations for Software and Information
Service) the apex body of Bangladesh IT software and service (IT & BPO) companies , BCC
(Bangladesh Computer Council),BCS(Bangladesh Computer Samity) are working to grow
the sector. BASIS reported that Bangladesh share in the global outsourcing market is rising
day by day.
Bangladesh still stands out for its customer service and efficiency, so its future is bright.
Today, customers are not only looking at cost-effective solutions for their outsourced business
but also for skilled staff, enhanced productivity, service quality and business process
excellence. About 60% of the population of Bangladesh is under the age group of 25 years.
This group is very much responsive towards technological advancement, eager to continue
18

their own persona development in the IT sector for improvement of their lifestyles vis--vis
the nation. with its large population and multiple-skilled people, Bangladesh would continue
to be preferred for both back-end and front-end outsourcing.

2. Opportunities for the Bangladeshi Outsourcing Industry

The growth of Bangladeshi outsourcing industry has been phenomenal. As markets
worldwide are becoming knowledge-intensive, Bangladesh has evolved to become the most
preferred destination for knowledge services.
Knowledge Process Outsourcing may soon be the biggest revenue grosser in Bangladesh. To
make this Bangladesh need to skilled its manpower in language, Programmings, creative
works and others jobs. Though Bangladesh has Chartered Accountants, MBAs, Doctors,
Lawyers, Research Analysts, etc., which may strengthens its position in the knowledge
service industry.

3. Opportunities for Bangladesh in terms of outsourcing are:

In services that require advanced English, like KPO, Content and Medicine, Bangladesh will
continue to excel. Bangladesh has to have a large pool of English-speaking lawyers with
expertise in foreign legal systems who can offer legal support and patent services. It will help
us to be affiliated with American legal firms to capture the American market. Bangladesh is
now the ranked in the web development, software development and programming market
with many Fortune number companies already having their outsourced works in Bangladesh.
Bangladesh has a big market in pharmaceuticals, in terms of clinical research and
manufacturing. Availability of talent for high-quality trials and data management gives it an
edge over competitors. Our pharmaceutical firm has the quality to tie up with world
renowned pharmaceuticals like GlaxoSmithKline. Another vertical that presents great
potential for Bangladesh is Infrastructure Management Services. A wide range of
management services for IT infrastructure, application operations, IT security and
maintenance can be provided. Challenges for the Bangladesh Outsourcing Industry
The industry is undergoing an evolution, and will continue to be driven by changes in
demand. A survey done by Price water house Coopers and Duke Universitys off shoring
Research Network found that the outsourcing industry is transforming as new providers are
19

emerging while existing providers are expanding into new markets. Bangladesh has made
remarkable achievements and has built a strong reputation in the outsourcing industry.

4. Bangladesh will face some new emerging challenges, such as:

The industry is growing rapidly and requires corresponding growth in infrastructure as well,
an area where Bangladeshis lackingthis needs to be addressed. Though Bangladesh has a
position in outsourcing business, it will face tougher challenges in the near future, from
South-east Asian countries like India, Indonesia, Malaysia, the Philippines, Singapore,
Vietnam and Thailand, which are improving their positioning as alternative offshore
locations. Because those countries enter the business before Bangladesh. So to be in the
competition Bangladesh has to move forward to build the young nation to compete the
knowledge fight regionally a well as internationally. Bangladeshs competitiveness is being
challenged by countries like Indonesia, which offer cheaper labor in IT and business process
skills, other hand its an opportunity to know that India is experiencing increased labor costs
and high attrition, which are of concern, and need to be addressed. Internet penetration needs
to address along with the ICT product and services. Language skill need to develop not only
in English but also in France and German Political crises in markets like the US and UK
might result in outsourcing restrictions being put in place. Also need to consider the local
political issues.
((Sohel), 2013)

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2.9 Top ten Strategic Recommendations for Negotiating an Outsourcing Transaction:

Despite the fact that it is often a hot potato in certain quarters at certain times (particularly in
election years), outsourcing, or as the industry prefers to refer to it now global sourcing, is
here to stay and will likely continue to grow exponentially. The economic imperatives of
sourcing are undeniable: under the right circumstances, a business enterprise can engage an
outside service provider to perform an internal business or technical function or process at a
much higher quality level and at a lower cost.
Sourcing transactions are highly complex and should be carefully negotiated. It will take a
good bit of hard work to negotiate the service providers form agreement into a document that
appropriately balances the service providers interests with the buyers interests. Even though
they may not admit this at the beginning of the negotiations, service providers will usually
negotiate with you in good faith. (Alexander P. Woollcott)

1. State Your Expectations Clearly

Never lose sight of the fact that you are sourcing to accomplish two overriding objectives: (i)
to have the sourced functions or processes performed at a higher level of quality by an
experienced service provider that is in the business of performing those functions for many
customers, and (ii) to have those functions performed more cost efficiently because the
service provider has much more scale and leverage (e.g. buying power) than the company
outsourcing the function. Every aspect of a sourcing transaction should use those two
objectives as a touchstone for the service providers obligations. Begin every services
Agreement with a very clear and objective statement of your companys objectives as a buyer
of sourced services.

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2. Get Negotiating Leverage as Early as Possible

As noted above, service providers and their form service agreements tend to be quite onesided favoring the service provider. You should consider using your own form of services
agreement, assuming that it has been prepared by an experienced sourcing lawyer.

3. Nail down Your Performance Metrics Clearly Up Front

There are two broad categories of performance metrics that you should insist your service
provider meet: first, broad, general performance quality standards and, second, specific,
detailed specifications.

4. Understand What Service Level Agreements (SLAs) Really Are

A buyer should always include in the sourcing agreement specific performance levels for the
are known as service level agreements or SLAs. SLAs, and their associated
credits/penalties, are often the most heavily negotiated part of a sourcing deal. Most buyers
of sourcing services, and often non-sourcing lawyers, do not really understand what SLAs are
or what their function is in the sourcing relationship. SLAs are not performance warranties
per se but rather are benchmarks that trigger certain rights or credits to the client if they are
not met, or, increasingly, certain bonuses or service provider credits if they are materially
surpassed. SLA credits are typically more of a slap on the wrist of the service provider than
a severe remedy for poor performance. Their goal is to entice the service provider to do what
is necessary to correct a flagging performance measure.

5. Often Ignored Transition services: Entrance and Exit of a service provider

At the risk of stating the obvious, transitional issues arise at the inception of the sourcing
relationship and at the end of the relationship. These issues, however, are ignored in service
agreements far too often.
The services agreement should contain a detailed description of how the services will be
transitioned to the service provider at the outset of the relationship and the functions the
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service provider and the client are to perform. A detailed transition plan may be appropriate.
You might want to ask that the timeframe for the transition schedule be extended for a certain
period of time (e.g. 45 additional days) without incurring additional charges from service
provider.

6. Defining Services Precisely to Avoid Loopholes

The services should be defined in the agreement very carefully and very precisely. We
estimate that over 75% of executed service agreements do not define the services with
sufficient precision. As self-evident as this sounds, many sourcing relationships run into
trouble because the scope of the services was defined too narrowly, broadly or ambiguously.

7. Dont Ignore the Importance of Service Provider Personnel

Sourcing relationships sometimes involve the movement of employees from the client to the
service provider. The Agreement should specify any of your employees to whom service
provider shall offer employment, if any, and certain required terms and conditions of
employment (e.g. credit for seniority purposes).

8. Give Due Attention to Relationship Management

Many sourcing relationships run into problems simply because the parties communications
lines break down. The Agreement should set up a very well-defined communications and
dispute resolution matrix.
Typically, clients and service providers are usually each required under the services
Agreement to appoint a project executive whose responsibility is to manage the sourcing
relationship created by the Agreement. A management committee comprising an equal
number of client and service provider employees is sometimes formed in order to handle
certain administrative aspects of the relationship and certain disputes that may arise.

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9. Fees and Expenses Plug Up Back Door Expense Gouging

Financial issues are one of the most treacherous aspects of sourcing relationships. Given that
the sourcing relationship is premised on there being cost savings and efficiencies for the
buyer, buyers should look closely for back door costs and other ways in which the service
provider can drive up the cost of the sourcing relationships. This is not because service
providers are somehow nefarious they arent. But they are in the business of maximizing
their profits just like your business so it is only natural that they will seek ways in which to
maximize the fees that they are paid. Having said that, it is perfectly fair and appropriate for a
buyer of sourced services to negotiate to eliminate as many back-door costs as possible.

10. Termination of Relationship

Sourcing relationships sometimes do not work out because of mere bad chemistry between
the client and the service provider. Sometimes this happens without any true breach by the
service provider. A client should not be forced into staying in a bad marriage with a service
provider.

2.10 SWOT Analysis for BPO:

S = Strengths

Large no. of talented graduates

Affordable and quality education as compared to developed countries

English language benefit

Strong customer base of well known companies

Powerful venture capital interest in investing in growth opportunity

W = Weakness

Scarce foreign language skills other than English.

Lack of customer service culture

Expensive and poor quality telecom infrastructure

Poor electricity supply

Cultural differences
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O = Opportunities

Horizontal and vertical expansion of existing customer base into new markets

Time zone difference between Bangladesh and target markets

T = Threats

High Billing rates

Political instability

Bangladesh's competitors in Eastern Europe, Latin America and the Asia. (kumawat)

Chapter 3: Termination
3.1 Conclusion:
In conclusion, outsourcing is a business strategy used by companies, for reasons such as the
lack of expertise, through the subcontracting of their business functions to outside
organizations. Outsourcing is receiving much response from companies all around the world
these days, with 70% of European companies already using it for reason such as to seek cash
infusion, reduce risk and operating costs, etc.
Companies that offer services at low prices can be easily found. However, due to several
ethical concerns, some companies prefer the costlier route as the price difference could be
deceptive because the variation will only be in the initial cost. Compromise of customer data
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and vendor reliability are one of the main ethical concerns companies tend to face, especially
in offshore outsourcing contracts.

Outsourcing is not the right tool for ever job but it is a good tool for the right job. There are a
couple of typical and traditional problems faced in outsourcing. Poor planning and less-thanexpected results are some of the problems faced by outsourcing players. There are solutions
to these problems however, there is no silver bullet and some situations can never be
predicted.
All in all, the future of outsourcing appears to be fairly bright and positive. The information
technology era enables new outsourcing players to take advantage of the different stages of
an organization's value chain. Besides that, there are also clear signs indicating the
broadening confidence in the outsourcing industry, which would ultimately lead to more
companies adopting the business strategy over an increasingly wide range of business
processes and functions.

3.2 Bibliography
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sa=t&rct=j&q=&esrc=s&source=web&cd=11&cad=rja&uact=8&ved=0ahUKEwj1vrO5wuD
JAhVBS44KHaIxAz4QFghMMAo&url=http%3A%2F%2Fwww.moit.gov.il%2FNR
%2Frdonlyres%2FE815C598-364E-40A8-B1AED76FE5BA7C76%2F0%2FExecutiveSummary.doc&usg=AFQjCNE
(Sohel), S. A. (2013, 7 19). soheljnr. Retrieved 12 18, 2015, from soheljnr.webs.com:
http://soheljnr.webs.com/apps/blog/show/30631613-the-future-of-outsourcing-in-bangladeshAlexander P. Woollcott, E. (n.d.). MMM Tech Law & Business Report. Retrieved 12 18, 2015,
from www.mmmtechlaw.com: http://www.mmmtechlaw.com/top-ten-strategicrecommendations-for-negotiating-an-outsourcing-transaction/
BPO-methodology. (n.d.). Retrieved 12 16, 2015, from www.searchenginegenie.com:
https://www.searchenginegenie.com/bpo-methodology.htm
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earchcio. (n.d.). Retrieved 12 18, 2015, from earchcio.techtarget.com:

http://searchcio.techtarget.com/definition/outsourcing
kumawat, V. (n.d.). slideshare. Retrieved 12 16, 2015, from www.slideshare.net:
http://www.slideshare.net/vk97999/bpo-17109912?qid=e876756a-4f1b-4daf-bb5ca9dab5d53ead&v=qf1&b=&from_search=1
Rahman, A. (2015, 8 1). The daily sun. Retrieved 12 18, 2015, from www.daily-sun.com:
http://www.daily-sun.com/post/63264/Business-Process-Outsourcing-in-Bangladeshnbsp
Saha, V. (2013, 2 14). slideshare. Retrieved 12 16, 2015, from http://www.slideshare.net:
http://www.slideshare.net/chikoovivek/project-on-bpo?related=1
Slideshare. (n.d.). Retrieved 12 16, 2015, from www.slideshare.ne:
http://www.slideshare.net/vk97999/bpo-17109912?qid=e876756a-4f1b-4daf-bb5ca9dab5d53ead&v=qf1&b=&from_search=1
The Benefits of Outsourcing. (n.d.). Retrieved 12 17, 2015, from www.outsource2india.com:
https://www.outsource2india.com/why_outsource/articles/benefit_outsourcing.asp
vigyan. (n.d.). Retrieved 12 18, 2015, from www.mvigyan.com:
http://www.mvigyan.com/bpo-services/

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