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Managed
Care Companies, which is more popularly known as Healthcare
payers, are increasingly outsourcing business processes
due to changing and challenging business environment
and technological and legislative changes. BPO vendors
will need to have good domain knowledge, process know-how
and competence with technological solutions to cater
to these Manage Care Companies. Skylawn Technologies
Private Limited is one such Contact Centre.
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Outsourcing
is not new |
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It
has been a popular management tool for decade. One can
safely say outsourcing has evolved :- |
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1960's - time-sharing |
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1970's - parts of IT operations |
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1980's
- entire IT operations |
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1990's
- alliances/tie-ups |
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2000's - IT-enabled services |
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Benefits
derived from BPO can be summarized as follows:
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Productivity Improvements |
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Access to expertise |
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Operational cost control |
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Cost savings |
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Improved accountability |
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Improved HR |
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Opportunity to focus on core business |
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Philosophy
behind BPO! |
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The
philosophy behind BPO is specific, do what you do best
and leave everything else to business process outsourcers.
Companies are moving their non-core business processes
to outsource providers. BPO saves precious management
time and resources and allows focus while building upon
core competencies. The list of functions being outsourced
is getting longer by the day. Call centres apart, functions
outsourced span purchasing and disbursement, order entry,
billing and collection, human resources administration,
cash and investment management, tax compliance, internal
audit, pay roll...the list gets longer every day. BPO
is one way of increasing their profits. If done well,
BPO results in increasing shareholder value. |
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Process
behind BPO! |
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Typically,
a customer calls the call center [usually a toll-free
number]. After pressing numerous numbers [1 for English,
2 for Spanish, 3 for bank balance!] the operator will
answer your query by accessing the database. Call centres
address sales support, airline/hotel reservations, technical
queries, bank accounts, client services, receivables,
tele marketing, market research. |
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Cost
saving behind BPO! |
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If
a bank shifts work of a 1000 people from US to India
it can save about $18 million a year due to lower costs
in India. According to Mckinsey, giant US pharma firms
can reduce the cost of developing a new drug, currently
estimated at between $600 million and $900 million by
as much as $200 million if development work is outsourced
to India. |
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What
would the cost savings for US companies typically be,
if they operated in India? |
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Datamonitor,
a leading UK-based business information company, research
indicates that 67-72% of costs to call centers operating
in the US/UK is directly linked to man power costs.
India, on the other hand spends only 33-40% of costs
on man power. This includes training, benefits and other
incentives for labor. |
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Cost
saving with Captive Centre’s like STPL!
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Build expertise from scratch by redeploying resources.
Latter option more expensive. |
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Unit costs higher. |
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High capital investment. |
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Payback usually between 3 and 5 years. |
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Committed to bringing in economies of scale, hence
the need to establish a sufficiently large centre. |
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Committed resources reduces such flexibility,
else training costs could shoot through the roof.
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No exit possible without incurring high costs.
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May or may not retain decision-making. Possibility
of backlash from senior management personnel. |
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Captive units are usually cost centers. |
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Long-term strategy looks for establishing centers
to first move work as-is, and save costs first.
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Pros
& cons of outsourcing to a captive centre like STPL!
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| Advantages
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Disadvantages
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Securing data is less complicated. |
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Expensive specialist skill in host countries.
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Capture margins that would otherwise go
a Third Party Service Providers. |
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Compliance
and legal restrictions. |
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Decision making authority contained within
the organisation. |
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Unavailability
of skilled manpower due to market stagnation.
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Tighter management control. |
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Requires
considerable effort in terms of management's
time and attention to establish |
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