Charlie Mullins argues that unpaid internships may exclude talented people without the means to support themselves through a period without pay.

As the saying goes, “a good day’s pay for a good day’s work.”  That is, of course, unless you are working for some companies as an intern.

Research by campaign group Intern Aware has led to the government referring 100 companies for investigation by HM Revenue and Customs, suggesting that these firms might be breaking the law through their use of unpaid interns.

Like a lot of things in our society – the benefits system for one – what starts out as a good idea designed to help people is continually taken advantage of until it no longer resembles its initial form.

Internships are in danger of falling into the same category. While we in the UK have always been partial to work experience or work placements, our American cousins really pioneered the internship as a way to find the most hungry and capable candidates for positions on offer.

This was personified in popular culture by Will Smith’s character in the movie, The Pursuit of Happyness where he slept in public toilets while on his internship for a lack of money to support himself.

This is an extreme example, but does highlight the role of employers in making sure they reward the people who work for them with the wage they are entitled to.

Of course, aside from any illegality there may be using unpaid interns, offering long-term unpaid positions as an entry point into a company’s workforce can exclude those without well-off parents or any way of supporting themselves.

Don’t get me wrong; there is a place for unpaid work to get a flavour for the working environment. Work experience has been a staple of British business and educational culture for many decades and it has served students and employers well.

Not everyone knows what they want to do when they are at school and work experience can give students an insight into professions they may not have considered. At the same time it may also make those who know what they want to do more hungry for that job once they’ve had a taste of the career they want to pursue.

As I’ve said, in some ways, that’s also supposed to be the reason behind internships: to see who really wants the job whether there’s money on offer or not from the outset or someway down the line.

However, it appears, for some companies, interns are used as a way to get their pound of flesh from employees without having to hand over any cash in return.

Aside from the legal argument that a worker under National Minimum Wage legislation is entitled to that level of income, it is also highlights the importance of helping people realise the value of what they do at work.

As the debate rages around getting those on benefits to realise that working is better for them, the same should be considered by employers using unpaid interns.

These interns will gain even greater motivation and deliver even better results if they are rewarded for their efforts – even if it is only the minimum they are entitled to!

Charlie Mullins is founder and CEO of Pimlico Plumbers.

By Katherine Rushton

TalkTalk has been fined £750,000 for bothering thousands of would-be customers with nuisance calls, but has ruled out paying any compensation to the individuals affected.

The telecoms company, which has spent the past three years battling to shake off a reputation for poor service, made around 9,000 silent and so-called “abandoned” calls to prospective customers, as part of a drive to drum up new business in 2011.

The calls were made through two of its call-centre operators, who relied upon automatic dialling systems to contact people but did not always have anyone to speak when the call was connected. Although it is legal to make a certain number of these silent calls, or abandoned ones – where people are greeted with a recorded message rather than a human – TalkTalk far exceeded the limits set by Ofcom.

The telecoms regulator said it was coming down hard on TalkTalk to send a “strong message” to companies that they have to stick to the rules about nuisance calls, “or face the consequences”. “Silent and abandoned calls can cause annoyance and distress to consumers,” said Claudio Pollack, Ofcom’s consumer group director.

The £750,000 fine will be handed to the Treasury. TalkTalk has already sacked Teleperformance and McAlpine Marketing, the call centres that landed it in hot water, and has vowed to recover the funds from them.

However, on Thursday the company faced calls to go further and compensate the people who had to deal with the nuisance calls in the first place.

“It’s not enough just to pay a fine to the Treasury,” said Gillian Guy, chief executive of Citizens Advice. “Silent and abandoned calls can be very distressing. The elderly often bear the brunt as they are at home more often and it can be particularly unsettling for people waiting for an urgent call from family or friends.”

Other companies guilty of silent calls, such as Homeserve, have put their hands in their pockets to compensate the people affected. However, TalkTalk ruled out following suit because the individuals being bothered are not customers.

Homeserve, which offers repair insurance for home appliances, was fined £750,000 last year – setting a new record at the time.

However, TalkTalk scoops the prize for the largest ever fine from Ofcom. In 2011, it was forced to pay £3m for billing errors at its subsidiary Tiscali UK. TalkTalk has since focussed its attention on improving customer service, and has made considerable headway.

Regulators are cracking down on nuisance calls after the government called on them to take tougher action and increase the maximum fine they could levy from £50,000 to £2m.

By Katherine Rushton, Media, Telecoms and Technology Editor

UK Telegraph

By Deepti Krishnan

2013 looks to be a slow growth year for Legal Process Outsourcing (LPO). 45% of the buy-side enterprises surveyed in the “State of Outsourcing 2013 Study” said that they had no plans to outsource or were going to decrease the scope of their LPO projects in the next 12 months. Only 19% plan to venture into a new LPO partnership or increase the scope of their ongoing LPO relationship.

LPO providers are also facing increased competition from new entrants that are reaping the benefits of onshoring and nearshoring. Carillion, a construction company, had a deal with CPA Global to outsource legal work. But now, it uses its own LPO venture: Carillion Advisory Services (CAS). CAS operates out of Newcastle in the United Kingdom, and is staffed by 60 paralegals. Another big entrant into the already crowded LPO provider space is Capita, an outsourcing giant, which recently added LPO to its service portfolio. It signed its first major deal with Pinsents in 2011. Capita’s 550-seat LPO center is located in Poland.

While law firms and corporate counsels are still outsourcing legal processes, the type of work is low-value. In Association of Corporate Counsel’s 2013 survey of Chief Legal Officers, eDiscovery is one function, which is primarily outsourced. This process forms the bulk of legal work outsourced, however, most eDiscovery firms are not traditional LPOs. For instance, Kroll, an investigation firm, has a suite of products, which includes the eDiscovery software “Verve”.

Discovery costs are directly proportional to the number of documents, where typically clients are charged USD 1 per document. If a case has 5 million documents for review, then the client will have to pony up USD 5 mn. eDiscovery technology that incorporates predictive analytics brings down the cost significantly, thus increasing the technology’s attractiveness to law firms and corporations with tight budgets.

The method by which predictive coding is used to determine whether a document is relevant to the case at hand is by developing algorithms to look for specific phrases and text in the document. For the legal industry, predictive coding enables a program to predict whether documents should be classified as responsive or non-responsive to a discovery request, relying on input by attorney reviewers on a sample set. Predictive coding reduces the cost of eDiscovery as the pricing is no longer linear. Most of the expense is incurred when grading the sample set and the cost increases marginally with an increase in the size of the document set. A 2011 study, “Technology-Assisted Review in E-discovery Can Be More Effective and More Efficient than Exhaustive Manual Review”, found that technology-assisted review can achieve at least as high recall as manual review, and higher precision, at a fraction of the review effort, and hence, a fraction of the cost.

Vice Chancellor J. Travis Laster of the Delaware Court of Chancery recently ruled that predictive analytics should be used in document review. This will help reduce costs as time taken to review legal documents for relevance will decrease. However, predictive coding only works in cases where the documents are text-heavy, not in patent review where documents have graphics. It also does not work in needle in the haystack investigations, as predictive coding is in its infancy, and privileged documents may slip through the cracks.

LPO providers that offer eDiscovery solutions need to incorporate predictive coding into their technology. Not doing so might sound the death knell of this line of business as new eDiscovery software with prediction algorithms come on the market. eDiscovery customers will migrate to the provider that offers the most cost-effective solution and adoption of predictive coding will ensure lower costs for both parties.

- Deepti Krishan, Research Analyst, Value Notes

By Nidhi Purohit

Law firms and corporate legal departments have been outsourcing to LPO service providers for more than a decade now, though it mostly comprises routine and labor-intensive tasks, such as document review. A key benefit of outsourcing to LPO service providers is that it costs a fraction of that charged by third party law firms. As a result, law firms in the US and UK have been quick to embrace LPO. Corporations, such as GE, Cisco, Oracle, and Dupont to name a few, have all outsourced legal work to Indian shores.

While the practice of LPO is growing, many in the legal profession remain wary. Client confidentiality is a major concern and some law firms are reluctant to send work overseas. Attorney–client confidentiality is a crucial part of litigation support services; Security breaches, and data security issues have prevented many organizations from offshoring legal work. Additionally, they are nervous about the quality of the work that will be delivered. As a result, only low-value work is offshored to low-cost providers in India. Lack of skilled manpower, with fresh graduates unaware of American or British legalese, exacerbates the situation.

Some LPO providers have taken effective measures to overcome the concerns of existing and potential buyers by taking a few steps such as:

•    Investment in Training:  Training and development programs remain at the core of any outsourcing endeavor and it is a continual effort. A higher standard of writing, corporate communication, and organization is essential to enable a smooth delivery. Even practicing lawyers need to be trained in the minute aspects of legal writing. Even if the legal codes of the outsourcing country may be similar to the service providers’, the interpretation of legal terms, statutes, and procedures will differ. Training employees to correctly parse through legal documents ensures that the workforce is equipped with the necessary skill set required to cater to clients from diverse geographical locations, and working within different specializations of the law. Most service providers are aware of this deficiency in new workers and have training programs to address these needs.

•    Quality Check: Companies are investing in stringent quality check protocols to ensure that the content delivered to the client is adheres to the Service Level Agreement (SLA). If the buyer-side vendor manager spends less time reviewing the work delivered, the cost savings of the outsourcing project increases. Many companies apply for quality management system certifications like ISO 9001:2008. This guarantees to the client both the quality check protocols implemented, and of work delivered.

•    Data Security: Companies carry out background checks for employees and apply for information security certifications (ISO/IEC 27001 Certification, ISO 9001:2008). The employees of these companies are required to sign non-disclosure agreements (NDA), and are not permitted to bring any personal data recording devices to the workplace. To further protect the confidentially of their clients, service providers also erect ‘Chinese Walls’ so that data from one team in the organization cannot be accessed by other teams in the same organization.

Educating and training employees in the various nuances of this industry and exacting legal writing skills will improve the quality of work submitted, and consequently, customer satisfaction. This needs to be augmented with both, exceptional quality control and stringent data security measures. Thus, buyers of LPO will be more willing to outsource higher quality of work to India. After all, ensuring customer satisfaction is the key to forging long-term relationships with clients.

- Nidhi Purohit, Analyst, ValueNotes

By Sameer Murdeshwar

Across the world, especially in urban regions and cities, crime has been rising for the past few years. A cursory search online reveals terrifying statistics such as a rise in violent crimes in more than half the cities that have the highest crime rates in the US, and a staggering hike of 10% for muggings and robberies in the UK.

The increase in crime has been exacerbated by the 2008 global financial crisis, which has led to fewer jobs leading to higher unemployment. The solution to tackle this problem is simple – more cops on the beat to patrol the streets. The irony is that the same issue causing the problem is also hurting the solution. Budget cuts have reduced the number of patrol officers. Slashing police funding leading to planned attrition among local law enforcement over the past two years has contributed to a rise in street crime.

To effectively solve this problem, a new kind of technology known as “predictive policing” based on predictive analytics has been developed. How it works is based on the following premise – Criminals follow patterns, and with analytics, law enforcement agencies can help determine where the next crime will occur and sometimes prevent it.

In the past, this has been used effectively in other areas such as retail to predict consumer behaviour. Pattern detection works best with large amount of historical data dealing with places and times of previous detected and solved crime. Using this data, a model can be built to factor in all attributes related to specific types of crime such as auto theft, murder and robberies.

A forerunner in this space is IBM. As part of its “Smarter Cities” programme, IBM has been helping agencies such as London’s Metropolitan Police, the Polish National Police and a number of US and Canadian cities detect crime. Their program known as CRUSH – Criminal Reduction Utilizing Statistical History, targets high probability crime areas in cities to allow police to deploy troops more efficiently.

IBM acquired i2, a Cambridge based crime analytics company last year to help build capabilities in this field. Other companies who have jumped on the predictive crime analytics bandwagon through organic and inorganic means include PredPol and HP. PredPol is a company formed after tests and programs were run successfully on crime analytics by scientists at the University of California – Los Angeles, and Santa Clara University. HP acquired Autonomy for USD 11 bn to build its investigative analytics service to help analyse historical crimes and predict and prevent new crimes.

The results from the use of this service has been very encouraging – In Memphis, serious crime has fallen by 30% and violent crimes declined by 15% in the past five years. In New York City, case closings are 25% higher than the national average and crime has decreased by 20% in spite of a decrease of 3,000 officers. However, predictive analytics does not promise to replace the effectiveness of police patrolling, but it certainly helps law enforcement agencies with tightened budgets and reduced payrolls.

With outsourcing analytics service providers working furiously in this area to bring out newer and more accurate iterations of this service, the accuracy of results in reducing crime is only going to improve. With agencies in Europe and North America having partnered with outsourcing service providers, it is now time for their Asian counterparts to do the same. This will bring in a new wave of public-private partnerships and will lead to safer cities worldwide.

- Sameer Murdeshwar, Analyst, ValueNotes

By Sameer Murdeshwar

The global mining industry has been facing major challenges over the past three years, but the factors affecting the industry are moving to a new level of extremity. A study from Deloitte revealed that these challenges run from the usual such as:

•    Bringing costs down
•    Managing commodity price volatility
•    Enhancing corporate social responsibility

to newer ones such as:

•    improving capital project management
•    attracting financing
•    bridging the talent gap with older workers retiring and filling in younger employees
•    mitigating the risks of diversification and planning for unforeseeable events in the global economy

These issues are acting as a roadblock for mining companies to improve collaboration and streamline operations globally, comply with international regulations and enhance government and community relations.

In the past, mining companies have outsourced traditional BPO and ITO services to help address some of their challenges. These services include procure to pay and order to cash within finance and accounting, payroll and learning services within human resources, back office contact support, industrial automation, software and embedded development, and general IT support services. These services have helped automate a lot of the processes in the mining value chain. In spite of these investments, the earlier challenges as described in this article persist.

This is where outsourcing of knowledge driven services comes in the picture – traditional IT/BPO services help consolidate processes and save costs to an extent, but their ability to provide any value beyond the stated objectives remain limited. The industry, led by major player such as Rio Tinto have begun outsourcing key high value services such as sourcing new talent for specific functions, automating bid management, market research specific to the mining supply chain, financial research monitoring global indices tracking prices, master data management through analytics and a centralized expediting system.

Their outsourcing partner for these services is Infosys BPO. Infosys had a strategy to expand beyond the usual buyer markets of the US and UK and foray into the APAC region. They helped set up these processes for Rio Tinto, and through this partnership, they were able to integrate IT and BPO services as well such as SAP implementation and FAO services. Another strategic relationship from Rio Tinto, this time, with iGate Patni for data mining and analytics services, has resulted in the opening of an innovation centre, titled Rio Tinto Innovation Center, in Pune, India. This allows further collaboration between resources in both companies, Rio Tinto and iGate-Patni.

Taking a leaf from these outsourcing partnerships, other service providers focusing on KPO services to fuel their new wave of growth, must consider the mining industry as their next big untapped opportunity. The industry offers attractive benefit such as long-term sustainability, scalability across geographies and processes, and an integrated outsourcing framework with KPO as the main service offering, backed by the supporting base of IT and BPO.

-    Sameer Murdeshwar, Analyst, ValueNotes Sourcing Practice

[1] http://www.plunkettresearch.com/outsourcing-offshoring-bpo-market-research/industry-trends

Consistent with the findings from the Australian BPO Report 2012 this new report from KPMG suggests that the market is taking a more considered view about outsourcing drivers.

Cost cutting is diminishing in importance as a reason to outsource IT, according to research of 630 contracts worth £14bn carried out by KPMG.

In its 2012 UK Service Provider Performance and Satisfaction study, the KPMG found 70% of businesses are influenced by cost when making their outsourcing decisions. This compares with 83% in the last survey two years ago.

The results, from over 200 participants from user businesses, showed 46% said the need for better quality services was their reason for outsourcing, while 51% said it was due to a lack of in-house skills.

Lee Ayling, partner in KPMG’s Shared Services and Outsourcing unit, said the need for better services combined with a lack of in-house expertise is driving outsourcing.

“Just going for a low-cost option isn’t the de facto reason to outsource anymore. Companies are now looking at how outsourcing helps improve the quality of service they can offer to customers,” said Ayling.

“At the same time a thirst for quality improvement means they want access to the skills that may be missing in house and the ability to respond rapidly to change.”

Mark Lewis, head of outsourcing at law firm Berwin Leighton Paisner, said the figures look about right from what he is seeing from his clients.

“These figures stack up but I would expect the figure for cost as driver to be in the mid eighties,” said Lewis.

“It also makes sense that a lack of skills drives outsourcing because if you are implementing new technologies it is unlikely you will have the skills in-house.”

The survey revealed 56% of end users were satisfied and very satisfied with their IT service, 31% somewhat satisfied, while 13% were unsatisfied.

Ayling said the increased take-up of multi-sourcing meant suppliers couldn’t take customers for granted and are being forced to re-invent their service offerings.

“The survey highlights that buyers are now using multiple service providers where they didn’t before – hence service providers have to respond to shifting preferences for how IT is delivered if the current trend is set to continue,” he said.

Other key findings revealed that customers are unhappy about service provider performance. A large 45% believe service providers are failing to actively identify opportunities for innovation and three in 10 claim that some agreements are not met on time or to budget.

Source: ComputerWeekly

More than £4bn of outsourcing tenders is currently under negotiation, according to a study of contracts the Official Journal of the European Union.

According to the Financial Times, this has led to many City investment analysts – who have conducted research into outsourcing companies’ bid pipelines – predicting an outsourcing boom. 
Martyn Hart, Chairman of the UK’s National Outsourcing Association said:

“Pressure on the public sector to make cost reductions has made for a healthy pipeline for many outsourcing suppliers, particularly now that tender costs have been reduced through ‘de-formalisation’ of the bid process. Having learned to engage suppliers earlier in the process, expect more business process outsourcing, as the public sector learns how to get itself a better deal.”

“Commoditised IT can save around 10% annually, but only accounts for 5-6% of government spend   – BPO can offer savings on a much grander scale. Expect those companies that offer both ITO and BPO services to be most coveted by City investors. And, to ensure Outsourcing Works, the government must invest the time to up-skill its people. Only through proficiency, experience and knowledge-sharing can the public sector maximise the cost and service benefits of this growth.”

Organisations are continuing to expand the services they outsource, according to KPMG’s latest global survey. Based on the views of respondents across North America, the UK, Asia and Europe, the quarterly study indicates that the growth in businesses using ‘shared service centres’ continues to outpace the number of organisations who favour traditional outsourcing.

Shared services, which refers to centralising admin functions once performed in separate divisions of a business, was cited as the strongest area of growth by over half (52 percent) of the respondents polled in the first quarter 2012 survey. In comparison, just 37 percent said they have seen growth in demand for traditional information technology outsourcing and just 27 percent for traditional business process outsourcing.

More than two-third (68 percent) of the service providers polled were also cautiously optimistic about pipeline growth for the next quarter – a figure that has risen by 7 percent since January. Asked to identify the key areas of interest, 50 percent suggested that they expect customer demand for IT services to increase between now and the end of Q2. Some also suggested growth would come from bundled business and IT outsourcing (21 percent), finance & accounting (11 percent) and HR (11 percent).

The survey goes on to suggest that while traditional outsourcing remains a valuable component of business’ efforts to reduce overheads, relative growth of its use has slowed. This is especially the case with business process outsourcing (BPO), which only 27 percent of the advisers polled cited as the strongest growth area.

“It appears that the trend towards focusing on more specialised outsourcing is a consequence of the expanding number of quality global sourcing locations with highly skilled resources, the ability of Indian services providers to diversify delivery capabilities beyond their home markets, and the growing sophistication of skill sets becoming available,” said Shamus Rae, partner in KPMG’s Shared Services and Outsourcing Advisory team.

“Clearly, the relatively weak BPO growth expectations are a reflection of diminished demand for more traditional, generic, transaction-oriented outsourcing arrangements, such as in finance and accounting, in contrast to the greater demand for more specialised BPO,” he added.

The findings also highlight that while many businesses are re-examining their use of domestic outsourcing, the use of near and offshore shared services and outsourcing continues to grow – especially buyer interest in offshore services delivered from locations other than India. For example, asked whether they agreed that buyers are looking beyond India for outsourced services, respondents scored 3.53 on a 5-point scale.

The survey found that respondents are seeing an increase in usage of Cloud services to complement, extend and in some cases replace traditional approaches to outsourcing, with 50 percent of service providers indicating that clients have one or more “live” cloud services deployments at the business unit level. They anticipate that this percentage will rise to 92 percent in 12 months.

“These findings highlight the fact that businesses need to continue to improve their cloud skills and acumen, especially relative to addressing data security, risk and regulatory compliance requirements,” said Rae.

http://inaudit.com/economy/growth-in-use-of-shared-service-centres-outpaces-traditional-outsourcing-as-economy-falters-19837/

By Richard Branson

While out walking in London recently, I passed a group of uniformed schoolchildren moving in an orderly, single-file line, with teachers in front and rear.

Nothing unusual, except for one thing that made me laugh out loud: their identical school ties. Or more accurately, what was left of them. More than half the kids had cut their ties so that only three or four inches remained below the knot.

Intrigued, I asked the teacher who was bringing up the rear, “So what happened to the ties?”

He chuckled and said, “Well, the kids hate wearing them, but school rules say they have to. What the rules fail to specify, however, is how long they have to be — so, snip-snip!”
Why didn’t I come up with such a naughtily innovativesolution when I went to school?

This caught my eye because Virgin just got into the banking business with the acquisition of Northern Rock, a British bank that we are gradually rebranding Virgin Money. In British banking, few things strike terror in the heart of a customer quite as much as the prospect of facing a tie-wearing, three-piece-suited bank manager across a huge mahogany desk. So we redesigned the banks.

Related: Richard Branson on Decision-Making For Entrepreneurs

One of our first changes has been to start to remove the traditional counters and replace them with informal seating areas. We also thought that the staff’s formal business attire was almost as solid a barrier to customer-friendly experiences as those counters were. Our newest group of Virgin employees were told they could dispose of the ties.

This would suit me — I have always hated ties, maybe because I’ve never seen the point. They are uncomfortable and serve no useful purpose. I am lucky to have always worked for myself, and therefore have never been a victim of corporate dress codes. For years, a sweater and corduroy trousers were my standard business attire. Someone once joked, “The day Richard shows up at the bank wearing a suit and tie, you’ll know that we are in serious trouble.”

Lately I have taken to wearing a jacket, which is handy since I encounter many different climates and situations through my business travel, but I will only wear a tie under extreme duress, which usually means some ultraformal official occasion, such as the state dinner at the White House that I was fortunate to attend.

Suits and ties in an office are just another type of uniform, but in an arena where uniforms no longer serve any useful purpose. At one time they probably showed that the wearer was, at the very least, able to purchase and maintain a fairly expensive piece of fabric. Now, however, in an individualized, interconnected culture, your achievements speak for themselves. The suit and tie is an anachronism.

It used to be that the one male in the room with an open neck (which was usually me) would be self-conscious about it (which wasn’t me). Nowadays, however, I am delighted to note that it’s the man wearing the tie who is most likely to be the odd person out.

Related: Richard Branson on Strategies for Success

Probably one of the biggest breakthroughs in the gradual demise of the suit-and-tie dress code came, rather surprisingly, in some lofty political circles. Tony Blair was one of the first British prime ministers — Maggie Thatcher excepted — to frequently appear in public without “proper” neckwear. Now President Obama has carried it to a level where he seems to be tieless almost 50 percent of the time.

I have always prided myself on throwing out the rulebook when something proves a barrier to business — or is just plain silly. And there is no viable argument why “gentlemen” should wear ties. The best anyone can muster is: “It’s expected,” or “Everyone else will be wearing one.” One of the signs that business culture has changed is that when people arrive for a business meeting with me, often the first thing they ask is, “Do you mind if we remove our ties?” They surely never thought, “If we don’t wear our ties we’ll stand a lesser chance of getting the deal done.” So why did they wear them in the first place?

So on behalf of the oppressed tie-wearers of the world, here is my appeal to those corporate despots who still force their male employees to put nooses around their necks every day: Please think again.

GIA announces the release of a comprehensive global report on Business Process Outsourcing (BPO) markets. The global market for Business Process Outsourcing (BPO) is projected to surpass US$322 billion by the year 2018, driven by the growing need among businesses to reduce costs, improve customer services, enhance competitive capabilities, and accelerate speed to market. New segments, such as collections business in mortgages and document review functions in legal outsourcing, and emerging verticals such as healthcare, retail and utility, are expected to fuel market growth.

Business Process Outsourcing or BPO is among the fastest growing sectors of the overall IT Services/Outsourcing industry. Rapid increase in the size and scope of the BPO industry is attributed to the growing desire of global businesses to rationalize costs and address issues such as shortage of skilled personnel. Globalization and technological advancements are stimulants for the global outsourcing industry. The two factors have played a critical role in lowering overall costs by shifting business processes towards platforms, wherein the talent pool is large and labor costs are less. Globalization has also led to the emergence of developing countries as the new growth centers of the present and the future. Though the US and UK have traditionally generated maximum revenues for the BPO Industry, the scenario is changing with BPO service providers focused on exploring opportunities in the emerging markets of Asia-Pacific, Europe, Australia, and the Middle East.

Such a strategy allows service providers to lower risk associated with dependence on a single geographic market. As a result, BPO vendors are focusing efforts on de-risking business operations by diversifying client base into newer destinations. On the other hand, several BPO providers managed to acquire all-round capabilities, enabling them to operate facilities at multiple locations across the world.

Following the frenetic pace of growth for over a decade, the BPO industry faced tough times due to the global economic downturn. The impact of recession on the outsourcing industry was seen in the form of slower growth rate, although the pace picked up in the year 2010. Contract restructurings dominated the industry deals, whereby the emphasis was on extending existing contractual partnerships, albeit at renegotiated terms and rates. The recession led to a marked shift away from traditional markets of the US and UK, thereby creating a geographically diverse marketplace. Currently, the sovereign debt crisis in Europe is driving investors to become risk averse again. Europe continues to face troubled times in view of the slowdown in GDP growth and large welfare budgets, further complicated by stringent opposition to measures being undertaken to curb entitlements. However, the volatile conditions are resulting in increasing interest among the European companies, particularly in continental Europe and the UK towards outsourcing.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/05/14/prweb9503996.DTL#ixzz1vSF3Yv00

By Mark Atterby – Senior Staff Writer

Today, experienced buyers of BPO expect significantly more from their BPO provider and are far savvier when it comes to evaluating potential providers. A paradigm shift in the provision and pricing of BPO services has occurred, where buyers demand and expect greater value for their outsourcing dollar.

The ‘lift and shift’ approach based on head count contracts and pricing models has given way to more sophisticated models where price is determined by results. Buyers no longer want to move a chunk of their back office somewhere. As well as reducing costs they expect their providers to deliver improved business performance.

Kartik Jayaraman, BPO Practice Head, Infosys Australia and New Zealand, comments, ”We are seeing organisations move beyond outsourcing transactional processes to outsourcing complex, high-end processes that have a higher impact and thus positively impact the bottom-line and create shareholder value faster”. It’s more about driving innovation and creating value rather than reducing costs.

More and more outsourcing projects are incorporating change and business process management principles. This shift in expectations means new models for pricing and contracts, where providers who fail to adapt will lose business. According to a recent whitepaper from Teletech, Outcome-Driven Customer Experience, more and more organisations are turning to outcome-driven contracting to accomplish the same general mission: aligning the goals of the outsourcing provider with the goals of the contracting organisation. Enabled by new real-time analytics and data mining capabilities outsourcing firms are able to provide new, innovative options in outcome-driven contracting.

In earlier outsourcing models contracts were built around SLAs and stipulated headcounts to perform certain functions for certain costs. In the past providers were rewarded on their efforts to reduce cost. Clients were not terribly concerned with the internal operations of the BPO provider as long as they met their contractual arrangements.

According to Rahul Kanodia, CEO of Datamatics, who was quoted in a recent news report, current buyers now expect operational transparency. “Today it’s not about cost. Buyers want value from more complex transactions. Technology and platforms are driving the next generation of BPO, making it possible to outsource and transform a complete process from end-to-end.”

They want to know how the provider is matching the headcount to the workload. They want to understand how much productivity and innovation the BPO provider can deliver.

It means that providers are rewarded based on their capability to transform business processes and deliver results. Instead of buying service by the time slice or the number of transactions handled, clients buy service by the organisational outcome.

At the end of 2010, Intellect, a UK-based outsourcing association, recently held a panel discussion to discuss the future of the business process outsourcing (BPO) industry. At the event, the invited panellists all agreed that “…the time is ripe for a shift in thinking from the traditional to the innovative; from output to outcome…customers are increasingly becoming aware of the fact that they are not getting what they really want. Clients need to become ‘smarter customers’ in terms of understanding what benefits and transformation outsourcing can deliver. Related to this is the need for both sides to understand the behaviour and expectations of each other.”