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If BPO and KPO could not help transform businesses of Fortune 500 companies, BTO --- Business Transformation Outsourcing --- promises to do just that. Welcome to the latest in the alphabet soup of outsourcing strategies.
Vendors that started with call centres have tried hard to change that business to either BPO or a niche KPO. They now want to do BTO. Never mind that over 50% of the work still relates to handling overseas calls ranging from customer care to answering IT help desk queries.
The industry is making this shift to a BTO model now as clients are asking for value adds, want more bang for their buck and want to know what else can their outsourcing vendors do. So, for companies such as Wipro BPO, Satyam Computer Systems' Nipuna Services or IBM Daksh the latest mantra is transformation of client businesses. IBM and several others call it BTO, while HP says it's an integrated services offering --- doing both the IT and BPO piece for clients.
When asked about the shift to BTO, Randy Walker, general manager, Asia Pacific BTO, IBM told, "BPO was based on labour arbitrage. But now clients want business performance improvement and not just savings on wage difference due to shifting work to India. BTO is the answer for that."
In India IBM-Daksh has over 10,000 staff many of whom are now engaged in offering BTO services. IBM has 24 BTO units worldwide, 17 in Asia and 12 in India. At the India centres customer relationship management and finance and accounts practices are the core areas, which it delivers to clients globally.
IBM's BTO clients include Bharti Tele-Ventures, Pioneer Corp, Johnson Controls, Kodak, Mitsui Life Insurance and Dun & Bradstreet. While out of Nipuna Services' 26 clients about 22 are common with parent Satyam Computer Systems. For these it does BTO.
Says Venkatesh Roddam, CEO, Nipuna Services, "Few years back companies were looking solely at cost pressures and the concern for the CIOs and CEOs was how many heads can they move to India. Now the business strategy has shifted to end-to-end sourcing or BTO."
Wipro BPO, that started reducing focus on voice-related tasks last year, does BTO for four of its 38 clients. Says Mythily Ramesh, vice president, customer acquisition, Wipro BPO, "The process outsourcing game has now changed to continuous improvements that vendors can give to clients. Instead of just doing a single process like finance and accounts or HR the client is looking at both IT and BPO, that is a business transformation from vendors."
For a Fortune 500 oil and gas major Wipro Technologies is doing the SAP rollout, while the BPO arm is executing the HR, finance and accounts and procurement processes. For another US-based oil retailer Wipro BPO developed a business model to cut down distribution loses and also executed the processes.
As the traditional BPO tasks become commodity businesses, more companies will be looking at doing BTO, the next stop for both clients and vendors.
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