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News Items - ISO & BPO

Support builds up for BPO

TIMES NEWS NETWORK[ SUNDAY, APRIL 25, 2004 12:43:16 AM ]
This week there was a flood of releases — of studies and analyses — backing offshore outsourcing. From the US market came news that financial services companies in that country plan to transfer around 500,000 jobs or 8% of total industry employment, to foreign countries in the next five years. According to studies conducted by Cutting Edge Information, a US-based business consulting firm, the tendency for banking call centres to draw on skilled, cost effective overseas workforce shows no sign of changing. The report, tilted ‘Managing Financial Services Call Centres’, states that offshoring continues to play an increasingly significant role in financial services call centre operations. The report cites the example of Bank of America, which in a move to reallocate financial and human resources, outsourced some of its back office jobs to India. The bank’s recent merger with FleetBoston formed a subsidiary in India to employ up to 1,000 people. Meanwhile, according to a CapGemini-IDC survey of more than 200 participants, HR and Finance and Accounting ( F&A ) outsourcing is expected to eclipse IT outsourcing over the next five years, as businesses move beyond cost reduction towards a growth agenda in 2004. The survey points out that though 59% of the respondents said the current US political and regulatory debate over offshore outsourcing has had some impact on their company’s long term interest in BPO , nearly three-quarters of respondents have already outsourced some of their IT functions. The survey also found that over the next five years, IT outsourcing will slip to the third most popular business function outsourced, behind HR outsourcing and F&A outsourcing, but still in front of global procurement and customer care outsourcing. The US Chamber of Commerce brought out a report which went all out to support offshore outsourcing. “Increases in productivity, the recent economic downturn, domestic business impediments, and continued uncertainty are the primary reasons for recent job losses and the slow pace of hiring — not the movement of work offshore. To create jobs, it is critical that America remains open to the worldwide economy — where 95% of our potential customers live. Isolationist measures designed to restrict trade and punish companies for sourcing must be defeated,” it said. Last but not the least, the World Bank has strongly favoured outsourcing of jobs and free movement of temporary workers in the mutual interest of high income countries like US and developing countries like India and China. In a paper, titled ‘Global Monitoring Report’ assessing the progress in achieving the Millennium Development Goals, the bank said that countries like India, Philippines, China and South Africa have vast capabilities in IT. The report has asked countries for commitments to ensure free cross border trade in services delivered via telecommunications networks, complemented by actions to liberalise the temporary movement of service providers.

Source: http://www1.timesofindia.indiatimes.com

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