‘Outsourcing’ is the catch word today in business circles. The swift and rapid proliferation of globalization and liberalization has revolutionalized global business as it is conducted today. There are some explicit reasons why Business Process Outsourcing (BPO) is the answer for many companies venturing into international business. The first objective obviously is to increase revenue. Volume of sales made from international jobs doubles or even triples the normal revenue collected from local clients.
In India, a fresher who joins a BPO company earns a minimum of Rs 9,000. Most BPOs train their employees for atleast two months but starts paying an employee from the date of joining. However, In Bhutan there has been cases where the candidates need to sign bonds at the time of joining with an average of Nu 1,500 per month as training allowances which normally is for 12 months.
There is also a need for specialization so that companies are able to offer specific services more effectively.
BPO has the ability to increase the target market of a company providing it with a wider international market within which it can offer its services. This therefore fulfils the need to position the company as an international service provider with no geographical barriers.
With my personal experience of more than three years in various fields and with various dominant BPO companies in India, I am of the opinion that Bhutan has the literate youth population, competent enough to cater to the needs of outsourcing companies but lacks in other important aspects which makes it difficult for foreign investors.
While Bhutan’s internet connectivity and reliability are still questionable despite having two internet gateways, call centres rely heavily on cheaper, faster and better telecommunications, relayed via satellite or fibre optic cables.
Companies in developed countries outsource business processes to developing countries which reduces huge cost since it is much cheaper to operate the business from developing countries where the outsourcing company has a comparative advantage over the currency exchange rate.
India, China, Malaysia, The Philippines, Russia, Eastern European countries and a few Latin American countries are considered as ideal targets for outsourcing locations by more developed economies. India with its wealth of English speaking, skilled and talented unemployed youth became the most sought after destination for business process outsourcing during the mid and late 90’s when the outsourcing industry was gaining pace globally.
Today, India still rules the BPO world with ease owing to their cheap but efficient services. Success of any business is determined by its cost competitiveness.Companies identified outsourcing a part of their business functions to cheaper locations overseas that have an abundance of skilled labor and necessary infrastructure, aided in significantly reducing their operational expenses and in improving their return on investments. It also resulted in a faster turnaround time as the outsourcing arrangement resulted in a round-the-clock, 24/7 business model.
In Bhutan, BPO has been misunderstood by more many including people in the industry with little knowledge of the viability, success and nature of such business.
BPOs are frequently mistaken for call centers because the most common business process that gets outsourced is customer care centers. Other BPO services include Finance, Payment Services, Administration, Human Resources and Content Development.
The Indian BPO industry achieved a significant milestone in 2011, earning more than USD 15bn in revenue and now directly employs more than a million young people.
However, the image of BPOs and call centres in Bhutan has been literally ruined by our private sectors trying to venture into this business. There were cases where employees were not paid owing to management issues and poor international business relationships.
Bhutan business solutions (BBS), a medical transcription BPO, established in Thimphu in 2007, mandates its new trainees to sign an agreement paper which entails that the candidate shall undergo training for 12 months and will be paid Nu 1,500 a month. The candidates are subject to five years of employment with the company post training. Candidates resigning from the company since the date of joining will have to refund double the expenses made by the company except if it is on medical grounds. Failing to comply with the agreement leads to losing their original documents to the company which means they will be stripped off their original academic transcripts and other documents.
The ministry of labour and human resources (MoLHR) often try to encourage Bhutanese youth to take up BPO jobs by providing trainings free of cost in collaboration with the Indian BPO and IT giants like Infosys, Wipro and Genpact. However, it elicited little response because the terms and conditions were not very much in favor of the candidates. In one of MoIC’s announcements earlier this year, an individual who wishes to apply for the training is subject to a year’s employment with Infosys post training. The only advantage is better opportunity once Bhutan has huge BPOs set up. A person who knows the trade would never recommend a candidate to take up the offer.
This is because, in India, a person who has been in the industry for at least six months including the training period is subject to increase in salary and other benefits. However, the industry is hugely dependant on performance and so does one’s growth in the fraternity. There are graduates with just a year’s experience who earn more than Rs 60,000 in a month which can be also because of authentic company policies and incentive plans.
For BPOs to flourish in Bhutan, apart from advanced technology and company policies, the government has the responsibility to bring certain regulations in place to enhance the BPO business and protect individuals in the process.
Challenges encountered by BPOs will differ depending on the kind of service that is being outsourced. The current telecommunication infrastructure setup in developing countries like ours does a lot of injustice to the IT and communications fields. For instance, the puffed-up internet costs accompanied by low bandwidths greatly hinders the growth of BPO in a country. Furthermore making international calls is difficult due to high telephone charges.
Language barrier is also a big challenge especially with clients whose origin is from non English speaking countries. Clients here refer to the end user of the service offered by the outsourcing company. This is one area where we can bank on considering the populous number of educated and literate youth.
(Minjur Dorji is a reporter with The Bhutanese)