Outsourcing is fast emerging as a means to improve overall performance by freeing top management from many routine processes for obtaining the benefit of the services offered by outfits which are specialized and hitech. It helps reduce expenses, concentrate on the core areas and outsource the rest, albeit with safeguards built in. HR processes, traditionally held to be an inviolable part of such core areas, are increasingly being outsourced to professional firms with encouraging results. It is no longer the sacred domain of inhouse specialists alone.

The practice of outsourcing noncritical processes to a thirdparty service provider has come to stay. Managements wish to reduce cost, to focus on critical processes and to benefit from the expertise and technical superiority of specialized outfits through this process. We discuss some of the likely trends that one can reasonably expect to see in India, in not so distant a future. First, we take a look at what has transpired till now.

First, we witnessed the advent of voicebased BPOs; while some of these offer medical transcription services, others are providing customer support service through call centers. They have been handling low valueaddition jobs which are offshored to Indiabased units by parent companies operating abroad. Sometimes the job is outsourced to third party service providers. These voicebased services reduce cost and allow the parent companies to concentrate on their core operations. Later we saw the development of the nonvoice BPO segment through the offshoring/outsourcing of backoffice processes, which are more in the nature of routine maintenance functions; yet they call for a much greater degree of understanding of the core job processes involved and also of the regulatory and other environments in which the parent companies function.

Banks handle their customer related work upfront and pass on the rest of the work to a dedicated BPO which takes care of all the follow up and compliance related work. In India too, in the precomputerization days, banks used to outsource their voluminous balancing and reconciliation work to Outside Computer Agencies (OCAs). We also see Certified Public Accountants (CPAs) and Legal Service providers in the US transferring their heavy work load to Indian firms of CAs/Solicitors while they concentrate on local delivery of service. Similarly, pharmaceutical and biotechnology companies have started outsourcing their research and field trials to poorer countries with less stringent regulatory regimes, including India. Knowledge Process Outsourcing (KPO) outlets have started mushrooming in India for the last four years, offering various highend financial and other services, carrying on industry and other research on a dedicated or some other basis, for the benefit of dollar paying principals and customers.

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