What Factors Affect the Cost of BPO?

Business process outsourcing (BPO) refers to transferring some or all of the non-core processes in one's business processes to the other. By transferring some or all of the customer's management and operation processes to the service provider, the company's limited resources are freed from non-core business and concentrated on core business, thereby improving the ability of customer process automation.

Business process outsourcing

The main purpose of business process outsourcing is to free the company's limited resources from non-core business

Business process outsourcing not only helps to improve the company's core business capabilities and efficiency. Because most outsourcing usually chooses regions or countries with human resources advantages, this also relatively reduces the cost of this part of business processes. Moreover, operating through a professional outsourcer is also conducive to improving the automation capability of this part of the process.

The most common is the bank's payroll service.

Business process outsourcing (BPO) is to improve the ability of customer process automation by transferring some or all of the customer's management and operation processes to service providers. The expansion of BPO worldwide, especially in developing countries, is due to the development of IT technology in these countries, coupled with the increased demand from companies in developed countries (mainly the United States, Europe and Japan) that want to outsource non-core business functions at lower prices the result of. For example, an American company spends one million US dollars to do a project locally, but only 50,000 US dollars for outsourcing in other regions, so it is the core of BPO logic to give these services to those service providers to complete.

Most software companies in China obtain the first bucket of gold through system integration, but they are weak in all aspects. BPO is an opportunity for software companies in developing countries to grow. It not only brings growth space for software companies, but also promotes engineering and planning of software companies, thereby rapidly improving the competitiveness of enterprises and even industries. The BPO market has huge growth space and is an attractive cake. According to market research company Gartner, since 1999, the global BPO market has grown at an average annual rate of 23%, and has become the fastest growing business in IT outsourcing. In 2004, the total global BPO service market revenue reached $ 300 billion. The IDC report states that the BPO market will grow to $ 682.5 billion by 2008, with a mixed annual growth rate of 11%.

In the US and Europe, if some work is outsourced, cost savings of 60% to 70% can be achieved without compromising quality. The provision of BPO services involves

Business process outsourcing will liberate to focus more on the core business. Outsourcing partners bring knowledge,

The worldwide BPO market has just passed the introduction period. The first 20 years of this century will see the BPO enter a growth period. This period will also determine the size and competitive strength of the BPO industry among developing countries. When expanding the international BPO business in China, in addition to paying attention to perfecting its own conditions, we must avoid realities and formulate different competition strategies for different markets.

Complete domestic BPO receiving conditions

Critical conditions for the success of a BPO business are: the right Internet infrastructure

Have the right internet infrastructure and access

Conditions and access conditions; political stability; strong government support; adequate investment; a well-trained technical labor force; and knowledge of the major languages spoken by customers. Other conditions include cultural and mental coordination between customers and service providers. Geographical proximity is also important because it allows customers to reach service providers on a regular basis.

In order to win BPO services, China needs to ensure that the above-mentioned key conditions are met. Businesses and governments should strive to provide training to meet the requirements for providing BPO services. In order to enter the BPO industry, companies should start with basic, low-risk services, and after accumulating experience and technology, then move to providing more complex services. BPO service providers should have a website on the Internet, an office in the client's country, and gradually establish partnerships with major global outsourcing companies in order to gain a foothold in this industry. Governments in developing countries should conveniently provide appropriate telecommunications infrastructure and the means of using such facilities, establish a supporting legal and regulatory framework, and provide financial incentives to promote the development of BPO services.

BPO personnel come from all walks of life. People in the industry may have large-scale process experience, but often lack the skills to manage multiple customers. They must have the ability to serve different customers in different ways in their daily work. Some consulting staff often lack operating experience, while IT staff lack industry-related process experience. Therefore, BPO suppliers must gather a variety of talents and skills from different sources.

Make full use of geographical and cultural advantages to develop Japan and South Korea BPO market

In recent years, China has been quite competitive in the software outsourcing business with Japan. In terms of software outsourcing business with Japan, in addition to Qingdao, Dalian, Shanghai and other cities, other cities across the country have also developed well. Geographically, China is adjacent to Japan and South Korea, and has a long history in culture and exchanges. China, Japan, and South Korea have language, customs, ways of thinking, and interpersonal communication.

Business process outsourcing

There are a lot of similarities, which are not available to Indian software companies that intend to open up Japanese and Korean markets. Japan and South Korea have been the driving force behind China's software outsourcing. Therefore, China should first stand by the Japanese and Korean BPO markets.

In the international software market, Japan has become the world's second largest software industry and service demand country. The Japanese software industry has rich solutions and operational management capabilities in the fields of finance, telecommunications, traffic management, enterprise management, and e-government. At the same time, promising embedded software forms the core competitiveness of Japanese digital products. The Japanese software BPO market has huge potential. Japanese software companies have a positive attitude towards outsourcing software development overseas. However, due to language and cultural reasons, the entrusted cooperation between Japan and India has not gone smoothly.

Japan's Yasuda Computer Services Corporation Asset Management System Department Changjiang Ze gave an example: Yasuda's business is to change the set of enterprise software from MS-DOS version to WIN-DOWS. Yasuda has been entrusting software development to India. The company, because Yasuda employees do not understand English at all, the company requires Indian developers to use Japanese in the cooperation. In order for Indians to master Japanese, the company had to invite Indian engineers to come to Japan for language training. Originally, the company commissioned Indian companies to develop software in order to reduce development costs. However, due to language training in Japan, the labor cost of Indians has not been reduced much. And although Yasuda trains Indians in Japanese, the language and documentation are exchanged. There are obstacles, so Yasuda thought of China.

In fact, many Japanese companies, like Yasuda, have begun to set their sights on China's huge software talent resources and the cultural commonality of the Chinese character circle. They said that due to the implementation of the software industry revitalization policy, the development of the software industry has made great progress and has been subject to many policies. Moreover, China's accession to the World Trade Organization has improved the investment environment for foreign companies in China. The most important thing is that China has an endless stream of talents in software technology, can work in both China and Japan, and has lower wages than Japan. Therefore, for Japanese companies, the most important partner should be China. Some Japanese companies even said that in addition to low-level development commissions centered on programming, higher-level development commissions and joint research can also become the direction of Sino-Japanese software industry cooperation.

It was pointed out at the China-Korea IT Industry Exchange Conference that in addition to cultural information and games, the development direction of the Korean software industry has begun to shift to the wireless network and mobile communication industry, including visualization of wireless network services, network industry and Fusion visualization and so on. These industries, as well as Korea s developed cultural information and game software fields, lack professional talents and need to cooperate with China, which has huge talent resources. Korean companies have therefore expressed the same idea of cooperation.

In addition, as one of the world's electronic information product manufacturing bases, China produces more and more digital products, and Japan and South Korea share the industrial chain of these products with China. Most of China's outsourcing businesses are software for mobile phones, software for DVDs, software for digital cameras, and software for automotive electronics. A lot of these software are placed in equipment and are embedded, which is good for combining China, Japan, and South Korea. Cooperation advantages in electronic information manufacturing products. And most of the software made in India is application software such as finance and services. This difference is closely related to the status of China's global manufacturing base, and it is also an advantage for China and India to compete.

Overseas expansion through customer IT department

Finding entry points for European and American BPO markets

The main contractor of the European and American BPO market is India. Due to the limitation of English proficiency and corporate knowledge, we cannot repeat the path taken by Indians to explore the European and American market. We should give full play to our advantages and find an entry point into the European and American BPO market.

A large number of domestic software companies strive to maintain customer relationships driven by the market. One of the common forms is to transform their software engineering team into an extension of the domestic customer information technology (IT) department: the customer IT department is responsible for understanding the customer's business process, Customer operators provide services; software companies only need to communicate with customer IT departments and be responsible for the implementation of software projects, and the tasks are relatively simple.

Like Chinese corporate customers, European and American companies generally have IT departments that are engaged in IT technology procurement, installation, maintenance, and some self-development work. Many European and American companies pay attention to the economic benefits of IT investment, and will inevitably "purchase" low-cost software engineering services in the global market. Therefore, the positioning of the Chinese in the European and American markets can also adopt the domestic model of software companies-developing our software export companies (or software export engineering teams) into overseas extensions of European and American customer information technology (IT) departments, so that the software engineering teams Complementary to each other's IT department: Our company is responsible for the main engineering and technical work, and the other IT department is responsible for liaison with other departments and certain technical services. At the same time, it avoids the existence of China and India when there is a direct BPO business with foreign multinational companies The gap between language and corporate knowledge. In this way, during the BPO project, we mainly communicate with software engineering and technical personnel of European and American enterprises, because most of them are software professional languages (which will not involve a large number of business process negotiations), and language difficulties are reduced. After realizing the overseas extension target of European and American customer IT departments, the Chinese will focus on BPO software export naturally. The positioning of "customer IT department overseas extension" of China's software exports will inevitably guarantee the sustained and healthy development of European and American software exports, and ensure that Chinese software companies eventually realize a large number of "large-scale software export projects."