Business Process Outsourcing (BPO)
In the BPO model, a third-party outsourcer assumes management of business processes, operations and enabling technology. In the United States,
BPO has been an established business practice for decades for human resources, accounting, payroll, advertising and travel. BPO’s core benefit is
enabling organizations to succeed by focusing internal resources on the organization’s core competencies — the functions that directly provide
revenue generation, competitive advantage and/or overall success of their mission. Noncritical, noncore functions are handed over to specialists —
the outsourcing provider — who invests in best practices, processes and technology to guarantee the greatest return on investment. BPO is about
delegating highly transactional, administrative processes that are essential to a plan’s survival but do not contribute to strategic and competitive
positioning. Where ITO focuses on technology improvements and savings, BPO concentrates on solving business problems; hence, primary drivers for
BPO are cost reduction, focus on core business and improved competitive advantage. Generally, outsourcing offers customers these added benefits:
1. Fixed IT and administrative costs, and service level guarantees for improved performance predictability.
2. Reduced risk of technology obsolescence and minimized upfront capital resources.
3. Seamless management of fluctuating workloads without investing in a fixed infrastructure.
4. Availability of a highly skilled workforce applying best business practices.
Understanding the Benefits
Although executives often understand outsourcing advantages, fears persist around loss of control. Many outsourcing advocates counter that
opinion by describing the critical role played by senior management in controlling and directing the outsourcing solution. The Sourcing Interests Group
explains it best: “In outsourcing, an organization’s leadership turns over the ‘how’ aspect of business processes — systems, infrastructure,
administration and execution — to the BPO provider but r etains the ‘what’ aspects — governance, strategy and decision-making.” Thus,
outsourcing offers maximum control over noncritical yet important business processes through accurate definition, monitoring and management
oversight of predefined goals and service levels. Additionally, the fixed Per Member, Per Month (PMPM) pricing offers predictable expense forecasting
of historically spiraling cost categories.
Prospective outsourcing buyers also wonder if the outsourcer can really manage business processes better and more cost-effectively than the
prospect can on their own. To avoid lengthy banter around current and “future outsourced” costs, most outsourcers welcome independent baseline
audits. Specialized consulting and audit agencies provide this service, enabling a fair, comparative evaluation of an outsourced service and price
proposal.
An Outsourcing Success Story - Scope International
Scope International, a wholly owned subsidiary of Standard Chartered Bank, UK, is an integral part of the Bank's strategy to consolidate operations
into Shared Services Centres - the plan is to ultimately have a significant part of the global processing hubbed out of Scope International. The
facility in Chennai is one of two hubs that the bank has set up, the other being in Kuala Lumpur. Despite being a relative late entrant in the BPO
business as compared to GE, Amex, Citibank, HSBC, ABN Amro, and others, Scope International has today emerged as one of the top five back
offices in India for international companies.
Currently, Scope International in Chennai services most countries in the Standard Chartered Group. Processes have migrated from 35 countries and is
spread around 23 different processing units. The operations are very diverse ranging from banking operations to supporting global HR processes,
financial services, software development and maintenance, support for global treasury operations and providing IT helpdesk support. Scope
International has adopted Six Sigma as the Quality methodology in the organization to create a highly effective metrics driven performance culture.
To date, over 400 people have been trained in Six Sigma.
Scope has grown to over 3000 employees in a short span of about twenty - four months - perhaps making it one of the fastest growing BPO centres
in India. Talented professionals from various backgrounds have joined Scope enriching the skill mix of the company. The average age in Scope is 26
with a male to female ratio of 67% to 33%. The skill profile of the employees is impressive - 30% of the people are professionals with degrees like
MBA and CA, 10% are postgraduates and 60% are college graduates. Scope Centre has been created as a world-class custom designed facility with
a built up area of about half a million square feet. The organization is young, motivated and totally committed to the development of its people.
Scope has a flat structure with only four reporting levels; its HR policies are innovative and very employee friendly.
The Scope culture promotes Customer Focus, Teamwork, Excellence, Openness and Trust. Scope embraces the Bank's values and the employees are
encouraged and rewarded for living the values at work.
Our Solutions to Scope :
Our due presence at Scope International is largely to provide efficient solutions and support them for their Management Information Solutions. With
regards to same, we have developed cost effective solutions for the Consumer Banking division (Cost Matrix application) and Operations division (Ops
MIS).
CMIS Matrix at a Glance : The Group CB Reporting team responsible for management reporting at group level and providing / consolidating information
/ data to group consumer banking finance. The team has initiated a process to track the operating costs of consumer banking products / processes /
FTE by activity and by function at cost center level for all the segmented countries. The data has to be collated from various locations in the form
of excel, based on which cost allocation is performed with a aim to produce different reports along with graphical representation of data in order to
make critical business decisions.
The above exercise seem to be tedious and internal managers need to spend enormous time in collection, collation, and generation of data, which
need to be performed on a monthly basis. This instigates the inspiration of having a MIS application, which consolidate the gathered inputs and
automatic allocation of cost by predefined system parameters and generation of adhoc reports.
Ops MIS at a Glance : A complete solution which will provide an effective and efficient MIS Tool for tracking cost by Activity drill drowned to level II
for TOM Owners Operations. OMIS application supports the following processes Configuration Management, Data Import, Transactions and Reports.
This following are the list of standard reports that are generated by the system.
a. Overall summary report - A cross-country report for a period of one month for which data must be grouped based on TOM Product details.
b. TOM – MIS Productwise report - A monthly cross country report to present details like Cycle Time, Volume, Total Direct Cost (Spoke & HUB),
Derived Unit Cost, FTE, Productivity Cost and SLA details.
c. TOM – MIS - A monthly TOM based report to present details like Cycle Time, Volume, Total Direct Cost (Spoke & HUB), Derived Unit Cost, FTE,
Productivity Cost and SLA details in a country.
