Posts Tagged ‘BPO’

Sequoia Capital to Invest rupees 28 crore in SirionLabs

April 24th, 2014

Venture investor Sequoia Capital is backing enterprise software maker SirionLabs, which develops technology aimed at improving the efficiency of outsourcing contracts. outsourcing9

The deal will see Sequoia invest about Rs 28 crore in the Gurgaon-based company, cofounded by Ajay Agarwal, who sold his stake in an earlier venture UnitedLex, a legal processing outsourcing firm in 2011, before starting out a second time. “We help very large enterprises manage their supplier lifecycle after a contract is signed. This is one of the last major white spaces in the world of enterprise software,” said Agarwal, the chief executive officer of SirionLabs who has made a personal investment of about Rs 12 crore in the company. This latest round of funding will be used to deepen research and increase market and product development plans.

Agarwal founded the company in November 2012 along with Claude Marais, who pioneered the development of supplier governance solutions at Nasdaq-listed information services group ISG. Marias earlier worked at General Motors and Coca-Cola, where he oversaw the outsourcing function for the beverage maker.

According to Gartner, worldwide spending on IT services reached $922 billion in 2013. The market is expected to grow by 1.8% in 2014. The initial focus for SirionLabs will be the IT and BPO outsourcing contracts, where it has already bagged 3-4 clients in sectors like financial services.

The company expects to reach revenues of $7-10 million (Rs 42-60 crore) by 2016. “They (Ajay and Claude) are arguably among the most qualified professionals in the world who could be pursuing this opportunity,” said Shailendra Singh, a managing director at Sequoia Capital who will join the board of Sirion-Labs. “We believe SirionLabs can become a very large company in the vendor governance and vendor management space,” he added.

The company’s flagship product Sirion is able to read agreements automatically and decide focus areas in multiple functions from contract to performance, finance, risk, relationship and consumption management. SirionLabs, which has 70 employees, is registered in Singapore with subsidiaries in India and USA.

The company , according to Agarwal, will target the strategic outsourcing market which includes IT, BPO, facilities management and logistics. “Traditional procurement and service delivery products are simply not geared to bring all the key disciplines of post-signature supplier management into a single platform,’ said Agarwal, 47, who earned a return of about Rs 75 crore by selling his stake in UnitedLex Software as a Service, popularly abbreviated as SaaS, has been on the radar of venture capital investors with companies like Freshdesk and Eka Software raising large financing rounds

According to Sharad Sharma, cofounder of product think tank iSpirt, large enterprises are willing to adapt to SaaS due to cost savings. “Big companies are also happy to buy SaaS products on the premise that implementation cost is much lower,” he said.


The Future of BPO: How Human Cloud and Infrastructure Cloud Are Changing the Game

April 23rd, 2014

The Cloud is fast evolving and empowering small enterprises with remote workforces to compete on par with larger businesses. Global collaboration and resource pooling is overcoming traditional constraints of geography and infrastructure, while the Cloud has created a level playing field for all businesses irrespective of size and location. Entrepreneurs are finding ways to collaborate and significantly reduce the time to develop and deploy products. An easy access to state-of-the-art development tools and infrastructure is boosting innovation, and adequate bandwidth is diminishing latency to near real-time.outsourcing6

What is the Human Cloud?
Adding the human element to the Cloud has created the Human Cloud, which can be loosely defined as a self-organizing ecosystem that engages a pool of digital workers for a wide variety of on demand and ad hoc services. The Human Cloud is providing a definitive answer to the challenge of analyzing large swathes of data by harnessing the power of distributed computing and the problem solving capacity of an array of human brains. This is providing hitherto unattainable flexibility, cost saving, speed of execution and transparency, all instrumental in an age of ubiquitous business where immediacy is the first and most important metric and expediency trumps accuracy. In conjunction with Cloud Infrastructure, the Human Cloud is making location irrelevant and virtualization of work a reality.

Business process as a Service (BPaaS) is delivered via a Cloud-based platform using a combination of process automation and dedicated labor for a client. The pricing models are usually consumption or subscription based. Crowdsourcing is the practice of obtaining business process services, creative services, content or data management services by soliciting contributions from a large and distributed group of independent workers, rather than from traditional employees or suppliers. The pricing model is usually task-oriented and output-based. Combining the two creates a potent combination of a largely scalable and partially automated alternative service model that is throwing up new opportunities as well as challenges – the Human Cloud. The Human Cloud is essentially an augmented intelligence ecosystem, almost a symbiotic form of self-correcting and persisting service delivery fabric.

Traditional BPO firms are process-oriented companies and specialize in understanding client processes, transition them to their own centers, optimize them and deliver services on an ongoing basis with predictable costs, quality and reliability. The processes typically suited for such a delivery model are finance and accounting, HR, procurement, supply chain management etc. BPaaS has largely embraced these same service areas and offered additional efficiencies and cost savings.
Is this the Future?

With ever-growing digital content, a new service line has emerged which requires a new breed of services providers that can leverage Technology, BPaaS and the Human Cloud. All of this sounds very exciting but is the future of BPO the Human Cloud? Our answer would be a yes and a no.

The Human Cloud, backed by the Infrastructure Cloud, will at best be an alternative to outsourcing certain task oriented activities that are very repeatable and easily dis-aggregated. This is well suited to services where there is a fluctuating and cyclical demand (ie unpredictable and asynchronous work load), or projects that are output-based or require diverse skill sets such as multilingual capabilities etc. Traditional outsourcing of business functions such as finance and accounting, HR etc. will still require a traditional or BPaaS-based delivery model with structured processes, adequate data security and a stable or dedicated workforce.

Some of the biggest advantages of the Human Cloud are standardized processes, labor on demand, diverse skill sets and low investment from clients. This growing wave of outsourcing is creating waves in the outsourcing world and opening new vistas of opportunities for buyers as well as suppliers. The Human Cloud has the potential to change the global labor market.

Advantages of Human Cloud
Low Cost

The cost saving is attributed to low wages, lack of benefits, absence of facilities or support costs, and low administrative and overhead costs, no training, supervision or turnover costs.

Scalability and on-demand labor
The human cloud is typically not constrained by capacity, location or time zone as a traditional BPO would. Labor is virtually on demand.
Managed Crowd Sourcing

Intermediaries and third parties acting as brokers to service can provide a governance layer and ensure quality and data security
Standardized processes

The cost of optimizing processes is hugely reduced as the model follows standardized processes which are already optimized
Higher Social Impact

The concept of micro work and engaging human capital from the socially vulnerable sections of the society is one of the spillover benefits of the Human Cloud
Operating Models and Impact

The evolving nature of the Human Cloud has seen various operating models with each having its own risks and rewards. The Facilitator model has been able to reduce the risk of anonymity by providing information on their staff. This model pioneered by online freelancing services such as Elance, Guru and oDesk were the first generation Crowdsourcing plays. However this was largely a freelance staffing model with limited process capabilities, moderate scalability and no project management.

This approach has been successful for jobs requiring flexible resources with repeatable tasks such editorial, data cleansing projects etc. The Arbitrator model provides buyers with on-demand access to a specialized community of skilled suppliers who can be engaged on a project via a competition or contest. The buyer can choose from multiple units and pay only for the one it finds most valuable. CrowdSpring and CrowdFlower are examples of this model.

The Aggregator model is one of the most commonly followed models in the Human Cloud. This model is suitable for large repetitive work. This model provides a platform and infrastructure to run the project. Amazon Mechanical Turk, Clickworker, Microtask are good examples. They have also started providing governance and quality control as part of the offering. The Governor model combines human skills with process frameworks and a technology platform to deliver, monitor and evaluate modular tasks. They provide a layer of project management, Business Analyst roles and work towards breaking up and distributing work followed by quality checks. Some of the firms using this model are TopCoder and Samasource.
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Challenges to be Overcome
While the Human Cloud is gathering momentum and redefining the global labor markets, it has its own set of challenges. It still is an evolving model and has inherent risks as providers are tweaking their technologies, processes and management capabilities. The “human” part of the cloud is still not as predictable and efficient as a structured BPO worker typically would be. The evolving nature of this industry and its dynamic behavior are both its strength and weakness.
In a Human Cloud environment, each task or activity needs to be defined each time they need to get it processed. The managed Crowd-sourcing model is trying to address this issue. The Human Cloud has yet to take off and become a mainstream play. Similarly BPaaS in its early years required a strong change in mindset to gain adoption. BPaaS required both a high level of process maturity and readiness to adopt standard processes.

Some of the most commonly outsourced work in the human cloud sphere is task or project based and includes content generation, digitization, map tagging, social media monitoring, sales and marketing support, research and development, document translation services, business analytics and data management. Some of the recent highlights in this area have been Nokia’s Ideas Project focused on consumer-derived collaboration across 210 nations to improve the viability of their products in all markets by drawing on consumer-experiences of participant-innovators to generate new ideas.

Facebook has also used the Human Cloud to create different language versions of its site, which are more compatible with local cultures, while it is common knowledge that Google and Yahoo use this to tag their maps and provide location based content. uses it extensively for digitization and indexing of genealogical records.

A Robotic Future
Adding to this mix is a new wave of innovation driven through Robotic Process Automation (RPA). RPA refers to automation of functions where computer software drives, follows and completes operating processes in the same way that a human user would. RPA is a tool or platform that operates and controls other application software through the existing application’s user interface as a human agent would do. It has been estimated that building a virtual back office with robotic “agents” to complete rules-based processes would cost almost a third of an offshore agent.

Of course, it’s a given that RPA would maximize productivity (robots can work 24/7!) and always perform with 100% accuracy. Understandably, not all processes can be automated but RPA is definitely gathering attention of service providers that are keen to differentiate and offer more innovative solutions to their clients. A common and simple example of RPA is the intelligent IVR that is being deployed to manage inbound calls and replacing human CSRs. One of the emerging RPA companies is Blue Prism which currently has some 1,000 virtual robots performing about 150 processes for a roster of 30 clients.

The Human Cloud and the Cloud infrastructure are defining a new alternative to the traditional BPO services in various key segments of work. It is fast changing the dynamics of how the BPO industry has been operating. Mature functions such as FAO, HRO etc. that require deeper understanding of the institutional knowledge, relatively stable workforce and governance from a service provider will continue to remain in the realm of traditional BPO or BPaaS.

However, new and emerging service offerings in the realm of Digital and Content management will shift to the Human Cloud. Traditional service providers, in order to differentiate, compete with smaller, nimbler players and avoid the commoditization penalty, will need to invest in this transformative model. Buyers would need to think differently and re-organize their service strategies to be able to benefit from this new paradigm. The Human cloud services are only going to grow more sophisticated and will become a significant subset of the BPO industry and change the way the current industry operates.

European IT and BPO outsourcing deals grow at fastest rate since 2010

April 17th, 2014

According to a recent article published by, the latest figures from market-watcher ISG show that the number and value of IT and BPO outsourcing contracts signed in Europe over the past three months have grown at their fastest rate in over four years. outsourcing59

The total value of contracts signed over the quarter year period are reportedly worth €2.4bn, which is a 29% increase from the same period last year, alongside a 21% increase in the number of contracts signed, reaching 165 in 2014.

€2bn of the total value was made up of the 127 IT outsourcing deals that took place during the first three months of the year, which is an 18% increase from last year.

It is of interest, then, that in contrast with the rising value of IT outsourcing contracts, ISG report that BPO value has decreased in 2014 to just €370m.

Nevertheless, in the UK alone, 59 contracts were recorded at a cost of €1bn, representing a 66% increase in value and the highest number of contracts in a single quarter for three years.

According to John Keppel, president of ISG North Europe, outsourcing activity remains high and it was the return of large relationship awards that can be seen to have positively affected the market. The future, however, will see an increasing number of customers move towards smaller contracts.

“Although these larger contracts have a strong role to play in the market”, Keppel explains, “the smaller deal size brackets will continue to grow more sharply as enterprises opt for greater flexibility and more specialised services from a greater number of providers. Multi-sourcing, increasing competition among providers and lower technology costs will continue to be the factors that drive the market for the foreseeable future.”

Keppel said global IT and BPO outsourcing is expected to grow 15% in the first half of the year and a “high single digit” figure for the full year.


Business Process Outsourcing Services in the US Industry Market Research Report from IBISWorld Has Been Updated

April 15th, 2014

Business Process Outsourcing (BPO) is a form of subcontracting that involves the delegation of specific business functions to third-party service providers. “It is the process of hiring another company to handle certain business activities in order to achieve maximum savings, increased efficiency and a greater return on investment,” according to IBISWorld Industry Analyst Stephen Morea. BPO services is distinct from information technology (IT) outsourcing, which hires a third party business to conduct IT- related activities, such as application management and data center operations. Moreover, BPO is often divided into two main categories: back office outsourcing, which includes internal business functions such as billing or purchasing, and front office outsourcing, which includes customer-related services like marketing or tech support.outsourcing56

The Business Process Outsourcing Services industry fared well over the five years to 2014, supported by an improving overall economy and rising revenue in the human resource, finance and accounting, customer relations management and insurance sectors, which provide a large portion of BPO business. “Additionally, rising wages and increased operating costs associated with the passage of Patient Protection and Affordable Care Act (PPACA) helped drive employers to BPO companies as a method of cost control,” says Morea. As a result, in the five years through 2014, BPO Services industry revenue is expected to increase at an annualized 4.1% to reach $127.4 billion and includes a 4.5% increase in 2014 alone.

In the next five years, wages will continue to rise with federal legislation presently in the pipeline to increase the federal minimum wage to $10.10 per hour. Also, the healthcare industry will encounter an upsurge in costs due to the burgeoning number of new individuals slated to receive health insurance. In response, companies will continue to pursue outsourcing to reduce personnel expenditures and offset escalating back office costs.
For more information, visit IBISWorld’s Business Process Outsourcing Services in the US industry report page.


Open Access BPO Fortifies Multilingual Call Center Services with Four More Asian Languages

April 14th, 2014

Leading outsourced business solutions provider Open Access BPO now offers voice-based customer service in Vietnamese, Thai, Bahasa Malaysia, and Bahasa Indonesia.outsourcing52

The four Asian languages will bolster the outsourcing firm’s multilingual call center unit, which originally offered its services in other Asian tongues namely Chinese, Japanese, Korean, and Tagalog, as well as Western languages including English, French, German, Italian, Portuguese, and Spanish.

As one of the few firms offering a wide range of foreign language services under one roof, Open Access BPO leads the niche of multilingual call centers in the Philippines, where the company operates. The firm’s venture also answers the demand for customer service representatives (CSR) and technical support agents (TSA) who will communicate using the languages spoken by the growing Vietnamese, Thai, Malaysian, and Indonesian markets.

Similar to the delivery method of the initial lineup, the four new voice-based services will be handled by native-speakers to provide customers with the type of genuine cultural affinity that eliminates contextual differences that hinder customers from fully understanding second-language agents.

Open Access BPO provides training for its agents on the culture of the customers they will be attending to. This is in addition to the training for proper call etiquette, articulation, and problem-solving, among other benchmark skills necessary for voice work.

The strategic location of the company’s operational sites also makes Open Access an ideal choice for multilingual call center services. The Philippines is reportedly the most lucrative multilingual outsourcing hub in the Southeast Asian region, as the country is situated at the heart of the Asia-Pacific. Multinational businesses catering to culturally diverse customers have been centralizing operations in the Philippines instead of spreading offices across the continent.


BPOs: The road best not taken

April 9th, 2014

If there is one activity that is reshaping the fortunes of a city like Pune, it is Information Technology. All over what is called the “fringes” of the old town with its cantonment and the “native” city, the screech of drills has shattered the tranquillity for which the city was once famous; iron rebars shooting up into a sooty sky obliterate the green cover that almost justified old timers calling Pune a hill station.outsourcing47

Pune has become a vast construction site, the frenetic pace of disruptive construction blotting out its history and re-inventing its geography. Rivers are asphyxiated, old wadas give way to malls, the city yearns to be known as the state’s ‘Bangalore’, a global IT hub.

In every direction are visible the icons of the new economy: glass-fronted facades of angular buildings, cement roads and plastic trees planted at regular distances on sidewalks to give off an aura of de-culturised globalisation as the city’s destiny.

But the economic slowdown has had its impact on the ebullience of construction activity. New townships planned to cater to the “IT sector” exude a sense of listlessness, of fading hopes as demand for new office space wilts.


Not many can clarify what they mean by IT if they do not mean BPO. It is not the arrival of IT global research centres Verizon, Symantec or brick-and-mortar manufacturing that excites local business instincts as much as outsourcing. For this is an employment intensive activity; it carries upscale connotations unlike blue-collar manufacturing. There are “economies of scale”, economic “externalities” that spell profit for ‘lifestyle’ builders peddling an urban dream for first generation home-owners with paychecks fatter than the workers of a previous generation huddled in shantytowns along the old Bombay-Poona highway.

The city’s hillsides, once verdant and roads once lined with ancient trees now conjure a meta-reality in giant hoardings promising personalised fantasies at “Euthania” or “Balmoral” or “Capriccio.”

But the wheel is turning. Other nations compete for the same enchantments. BPO centres have been sprouting in other developing countries for years.

For western firms seeking back-end support at the lowest cost, India is becoming high wage country — particularly Bangalore, Pune and Delhi.

The choice now is between the Philippines and Patna, and the lowest wage rate counts.

Losing to neighbours

Outsourcing began in the early part of the new millennium as a novelty and has now become a necessity. Its benefits hinge on locating the lowest cost outsourcing hubs. A study by industry body Assocham and consultancy KPMG on India’s information and communication technology ICT sector felt India could lose 70 per cent of all incremental voice and call business to the Philippines, among other competitors.

English language skills are fairly developed and wages are lower, so far. It’s not surprising that Indian firms too have been making a beeline for lower cost destinations to outsource operations.

As far back as 2007, Indian majors such as Infosys, Wipro and TCS were scouting around in Poland, Romania in east Europe and Mexico and the Philippines to not just exploit the advantages of low cost but also to get closer to their clients.

The study estimates something like $30 billion in revenues could be lost to India in the coming decade unless something is done to retain the outsourcing business.

What can be done?

India enjoys the advantages of backwardness, low employment and a demographic dividend most investors in the BPO space find tempting. Wages are climbing but the spike is the highest in and around Tier-1 cities.

So the study recommends the development of BPO business to small towns and urban spaces that mirror Tier-1 cities at an earlier stage of their growth with high educational levels but low employment. The biggest advantages, of course, are the low levels of wages and cost of living in non-Tier-1 cities.

The logic of this kind of industrialisation is its basic transitoriness. Nothing stays; if wages rise firms look for other areas of low wage to pitch their tents. Perhaps urbanisation is an unintended benefit but if Pune is any example to go by then it is possible that the urbanisation will be hollow within; new glass fronted buildings hiding empty opportunities.

The Assocham-KPMG study’s recommendations of creating opportunities in non-Tier cities appear expedients to a rather dubious employment generating urbanisation.

Outsourcing of voice and call centre operations may sound similar to the subcontracting in manufacturing.

Multinational companies in the pre-digitalised world of manufacturing in the 1950s and 1960s sub-contracted operations to developing countries with an eye on low- cost labour and skills. They still do.

Hidden advantages

But the process of shifting parts of the manufacturing processes over time benefit host countries because of the spin offs in ancillary development. Technologies could be repeated, copied, operations require supply chains, feeder units. A labour force acquires skills that given enabling conditions could create entrepreneurship.

The bulk of outsourced operations — voice and call centres, medical and legal transcriptions other back-end transactions do not carry any such externalities. There is no skill development in transcribing or answering calls in fake accents.

The attrition rate as the Assocham study notes is high among employees because rootlessness is the abiding condition of the work. No job in modern times is as alienating as one at a call centre and the only redeeming quality is the paycheck that, after a while does not compensate enough for the banality of the work.

But the rate of attrition is not high among the workers alone. It is also high among outsourcers that come looking for low cost workers and leave once costs rise.

In this sense, they are not very different from portfolio capital, “fair-weather” friends looking in this case, not for high returns in a host country but low wage levels.


IRR Strategies Launches BPO, LPO Offshore Outsourcing Services Specially Designed to Improve Ebitda, Valuation of Private Equity, Vc and Hedge Fund Portfolio Companies

April 8th, 2014

IRR Strategies, a Miami-based BPO and LPO company specializing in outsourcing solutions for underserved SMEs and private equity investors, recently launched BPO and LPO offshore outsourcing services specially designed to help hedge funds, private equity and venture capital funds improve the financial performance of their portfolio companies.outsourcing44

“We can dramatically improve the financial performance of portfolio companies using our extensive long-term understanding of the BPO business on a global basis,” said Hector Botero, IRR Strategies president and CEO. “Our offering is very straightforward: whether in the acquisition or investment evaluation period, the management and growth period or the investment exit process, we can add substantial value.”

IRR Strategies provides global solutions for underserved small and medium-sized enterprises (SMEs), as well as small and mid-level private equity groups, serving their strategic BPO, LPO and/or shared services needs through nearshore, onshore and offshore business and legal process outsourcing, subcontracting to suppliers all over the world.

“With an extensive global network of best-in-class operators, IRR Strategies is at home implementing programs designed to bring more efficient processes, applying the latest technology and, at the same time, providing a two thirds reduction on HR costs.”

IRR strategies is comprised of an exceptional management team covering most industries and a very well-established outsourcing network of companies in Asia-Pacific, India, Central and South America. Botero, in particular, spent the last 15 years of his career implementing outsourcing programs for Business Wire, a Berkshire Hathaway company, and Marketwired, an OMERS private equity company. During his tenure at both Berkshire Hathaway and OMERS private equity portfolio companies, Botero successfully implemented offshore outsourcing projects that provided increased EBITDA and valuation for the portfolio companies.


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