Tweet

Growth of BPO Exports

Guest post by: Ivana Lewis

Article Overview: The article gives a vivid report of the growth that is being experienced by the exports of the global BPO industry.

Growth of BPO Exports

Technology is getting advanced with the changing times thereby, inclining more businesses towards information technology and business process outsourcing. Despite, the slow recovery of the global economy, these industries are on a high. The recession that hit the floor a couple of years ago, has greatly affected most industries other than that of the BPO and the IT. The sudden economic downfall caused most of the businesses to reduce their operational costs, as a result of which they narrowed down their level of recruitment. They began to get their work done by the call center employees instead of hiring employees for their organization. The call center services turned out to be very cost-effective to them. This is how the demand for BPO solutions began to increase, and gradually reached to the current status. The revenues generated from the exports of the global call center industry, have amounted to about fifty billion dollar in the present year i.e. 2010. The United States rules the markets that are in need of BPO exports, thereby, bringing in the highest profit to the call center industry. Recent studies suggest that the export revenues are about to grow by thirteen to fifteen percent, thereby reaching an amount of fifty seven billion dollars.

The annual performance report of NASSCOM, has indicated that the domestic BPO market is about to grow by twelve percent and hit a revenue collection of sixty six thousand and two hundred core rupees. In the next year, the growth will increase by fifteen to seventeen percent, thereby amounting to 76,100 – 77,500 crore rupees. Another report on the industry suggests that, the call center job vacancies, both direct and indirect, will exceed 23 and 82 lakhs respectively. The industry is expanding at a rapid pace in the tier II towns and cities, with a sizeable population entering into the call center firms.

The initiation of remote call center has contributed to the revenue generation of the BPO firms. The flexibility of working from home has caused many people to join the call center agencies, thereby, equipping them with abundant human resources. The availability of cheap and skilled labor is motivating the industry in serving more powerful and competent clients. Consequently, the outsourcing firms are experiencing a rapid increase in the generation of their revenues. The call center agencies are catering to a multiple industrial sectors, many of which entrust them with highly complicated tasks. But no matter how complex an operation might be, the call center executives solve them magically.

The market of both the domestic and global BPO industries is experiencing rapid growth in terms of their export revenues. They are constantly re-inventing themselves by enhancing their utilization rates and cost effectiveness. They are formulating new business models that will help in improving their profit margins in the long run. The call center agencies have made great contributions in recuperating the business from the economic slowdown. In the days to come, it is expected that the industry will experience significant growth in its business sales.

Related Articles
  5.2 Growth, productivity and diversification: Economic Report on Africa 2007
  Why Africa’s oil riches don’t make Africans richer
  3.1 Developments in trade negotiations: Economic Report on Africa 2007
  II.a Merchandise Trade: TRADE AND CAPITAL FLOWS BETWEEN CHINA AND AFRICA
  2.2 Sectoral performance III: Economic Report on Africa 2007
  The Swiss Flex their Muscles by Intervening in their Currency Again!
  5.2 Africa’s diversification regimes revisited: Economic Report on Africa 2007
  2.2 Sectoral performance I: Economic Report on Africa 2007
  Wanted: jobs for Africa’s youth - Diversification
  Removal of Barriers and Enhancement of Market Access: Barriers to African External Trade
  4.1 Case studies on export diversification for selected African countries: Economic Report on Africa 2007
  International Sales
  2.1 Growth performance II: Economic Report on Africa 2007
  Concluding Remarks: Enhancing Africa’s Trade: From Marginalization to an Export-Led Approach to Development
  Uganda - Africa's Newest Investment Darling?
  Learning to love the high dollar
  4.2 Diversification regimes in Africa: Economic Report on Africa 2007
  1.5 Globalization trends and implications: Economic Report on Africa 2007
  1.3 World macroeconomic imbalances: Economic Report on Africa 2007
  Export Business Tips: How to Build Your Export Business

Article Tags: billion dollars, bpo, business process outsourcing, call center job, call center services, crore rupees, economic downfall, export revenues, global call, global economy, job vacancies, lakhs, nasscom, operational costs, performance report, rapid pace, revenue generation, sizeable population, tier ii, towns and cities



Related Forum Posts
It's not easy - Evan, It's not easy to franchise a business! Franchising requires a strong business model, significant capital resources, and very talented people to be successful. There are over 3000 franchise opportunities out there, most (80%) don't have the three criteria I listed above. The biggest benefit to using franchising to grow your business is that you bring in someone else's capital and human resource. What you are giving up is control in operating that business. I have seen successful companies get in trouble attempting to franchise their business, franchising requires a different skill set than simply operating units. Growth would have been much easier if they had just opened their own units and sought grown from within.
Different Hats - CEO Sales & Marketing & Leadership Development Company Strategic Vision 10 Alliances & Growth Strategies 10 Hiring & Managing People 8 Mentoring 8-9 Strategic Planning for Clients 10 Execution of Marketing Campaigns 9-10 (i have great people who do the nitty gritty) Financial Management 9 Bookkeeping 3 (outsourced as I really hate the fine details like GST0 Administrative Follow Up 6-7 (again have great staff) Writing & Publishing 9 (getting better all the time!) Speaking 10 (so I have been told) Self Promotion 9-10 Web development & Promotion 6-7 (learning more and have brought on players who are 10+) Babysitting Employees (1 - wont do it, that's why I work so hard to hire and motivate the people I have) Great topic Kevin!! Jude
Sports is queen! - About four years ago I started a webzine called The Thunder Child, devoted to science fiction and fantasy in all media. Growth was verrrrrrrrrrrrry slow at first, but has gradually picked up so that now I'm making a respectable income from my amazon.com and google adsense. (Well, from adsense, anyway. Amazon is a drop in the bucket compared to what adsense brings in.) Last year I put together a website showcasing the Tennessee Lady Vols (who won the NCAA championships last year), and just two weeks ago I put together a small website for Jacoby Ellsbury, a rookie outfielder for the Boston Red Sox - called a "phenom" and already very popular. The Lady Vols site has about 20 pages...the Ellsbury site has 5. Compared with The Thunder Child that, started out with about 20, and is now at about 1,000 and growing. Well, the hits on those two sports sites are more than three times what the hits on my Thunder Child site was during the first year of its existence. Since I've been a sports fan all my life, I reaaaaally wish that I'd started a sports webzine four years ago instead of this sci fi one, because I think my income now would be treble what it is. No doubt about it, sports rules!
$3000 per mo Site for Sale: $65,000 OBO - $3000 per mo Site for Sale: $65,000 OBO Content and Community Driven Pet Websites ________________________________________ Profile: Two Pet Related Websites Price: $65,000 OBO Age of sites: 2 years 4 months Monthly revenue: $3300 (plus or minus a couple hundred) Key details: Growth Year over Year: 641% Uniques: 200,000 per Month Page Views: 1 mil + per Month Referrers: 10,000+ Monthly Search Engine Traffic: 61% Members: 7500+/- Articles: 318 Blog Posts: 189+ Forum Posts: 256,000+ Topics: 19,000+ Adsense Revenue: $1500-$1700 per month Kontera Revenue: $900+ per month Direct Advertisers: $90 - $300 per month Monthly Server Costs: $100 Monthly Advertising Costs: $0 Total Profit Per Month $2500 - $3000 Organic Growth Month over Month: 10% +/- (Zero spent on advertising – all word of mouth and search engine) Software Licenses: All Open source and thus free: Linux, Apache, MySQL, Zen Cart, PHPLIST, WordPress, SMF, and the rest Custom Programming. Software Editions: All software running latest releases. Uniques Last Month: 200,000 Page Views Last Month: *2,000,000+ per month Referring Sources: 1,000 different referrers Referring Keywords: 60,000 Search Terms First Page Results: Thousands of keywords and keyword combinations Indexed pages (Google): 65,000+ Indexed pages (Yahoo): 26,000+ Google page rank: 5-6 (Lots of 3’s and 4’s throughout the sites) Pages of Content: 60,000+/- Alexa site rank: 124,000 (way off the mark due to audience profile) Compete Site Rank: Much closer but still off.. See image Brand Value: All Original Creative and Content including Logo, Forum Template, Front-end, CSS, Code, Images etc. Extremely well made to render fast as well as accessible, to both humans and search engines. Search optimized throughout. Description: I actually posted this for sale almost 11 months ago but didn’t take any offers. Since then traffic has increased almost 650% and revenue has increase by almost as much, closer to 600%. Revenue comes from direct advertising ($150-$350 per mo) but primarily Google Adsense ($1500 - $1750 per mo) and Kontera Links ($700-$900 per mo). Letting go as I’m working full time and just started Business School… I just don’t have the time. However, these sites are ripe for one to build a better business direction. I started these sites as the pet industry happens to be exploding, exponentially and almost parabolically. Google “pet spending” to find a glimpse. Some articles you’ll find: “The Growing Pet Industry Is One Trend You Can Bank On” "In the past 10 years, pet spending has more than doubled to an estimated $38.4 billion for 2006." "According to the U.S. Census Bureau, the pet industry is now the seventh largest retail segment in the country." “We have only begun to see the tip of the spending iceberg" “Pet Spending at All Time High” "Pet ownership is on the increase in the US, and the amount of money spent on pets is dramatically increasing too." The two sites are content and community driven websites with 350+ health related articles on pets, a pet blog that discusses current issues, and a very active message board and community. They compliment each other perfectly and as such are being sold together as a package. The templates are completely custom designed and CSS powered. They would be XHTML Strict Compliant however we’ve included a couple of things that just wouldn’t let it pass. There are almost 8000 members between the two sites. Several hundred more between the blog subscribers and the email list subscribers. At one time we had a store (its all still there however it’s been shut off) and we had about 200 customers. The store lasted only about a month and a half as our careers just didn’t allow us to provide the customer service this site deserves. We also had a drop ship company that worked out really well, (and we still do if we want them). Much more work than our careers had time for. The logos are custom. I’ve got the logo in vector version for Signs and tee shirts. The Design is custom. All software front-ends are custom and running clean - open source applications. Runs extremely well. The entire 2 sites run on a dedicated server that runs about $100 a month.. The sites run on a LAMP environment, meaning Linux, Apache, MySQL and PHP. All of the software is open source and requires no fees. We run PHPLIST, Zen Cart, and SMF Simple Machines Forum. The blog is Word Press. The article system is completely custom however the back end panel is ran simple from phpMyAdmin – straight to the database. I think there is enormous potential with the two sites as the brands have a very loyal following and is growing by leaps and bounds. It has been mentioned in 10 or so online and offline newspapers (that I am aware of) as well as a magazine – all of which will be provided. The site was featured as Yahoo’s Site of the Week. The site was forever (and perhaps still is) the number one pet site viewed on StumbleUpon.com. The blog also has 177 links from 56 sites according to Technorati.com and ranks 52,000. The database is huge. It’s full of fully owned content, images, customer data, subscriber data, members etc etc. The brand really sells when it comes to tee shirts and calendars. We have a drop shipper when needed that we buy tee’s at 4 dollars a shirt. Each shirt sold for $20 so there was a great margin. The two sites have a solid existence and are trenched well into all the major search engines with perhaps thousands of first place results for keywords and keyword combinations. The majority of traffic is all organic from Google, Yahoo and MSN and it will stay that way forever. The site was built solidly by SEO pros with Search Engine Spiders in mind as every part of the site is search friendly. All pages have been correctly and lightly coded. The database powers the meta tags, title tags, h1’s, h2’s, image titles and bold tags. The site has tens of thousands of dollars put into the design and functionality. petsite4sale@gmail.com
How about discussing Costco's biz model?? And CEO - Here's a recent article that covers both.............. Costco: The 'anti-Wal-Mart' The warehouse-club retailer 'has figured out the big, simple things': Hold down expenses and prices, treat employees well, make discount shopping fashionable and keep shareholders happy. By Barron's "Membership has its privileges." That slogan belongs to American Express, but it might better apply to Costco Wholesale, the leading warehouse-club operator in the U.S., whose determination to deliver value and innovative products to its 23 million members has made it one of the country's top retailers. Costco (COST, news, msgs) has succeeded by flouting industry norms. The big-box retailer charges customers a base yearly fee, now $50, to shop in its sprawling stores, which offer quality goods at low markups. Consequently, its margins are among the slimmest in retailing. The privileges also extend to employees, who are paid well and enjoy generous health-care benefits. This formula has generated fierce loyalty among both shoppers and workers while rewarding long-term investors. Costco shares, which traded Thursday around $58, are up from a split-adjusted price of $1.67 when the company went public in 1985. True, they no longer are dirt-cheap, but in view of the company's superior management and opportunities for growth, neither are they rich. Small businesses are big customers at Costco, but the company also has managed to make discount shopping fashionable for affluent Americans by offering fine wines, books and big-screen televisions at low prices, and staples such as paper towels and razor blades in bulk. By offering one-time specials like discounted Prada bags or Callaway golf clubs at individual outlets, Costco has created what it calls a "treasure-hunt" atmosphere in its stores. Not the Wal-Mart way Costco is among a handful of retailers that has flourished despite Wal-Mart Stores' (WMT, news, msgs) onslaught; Wal-Mart's more downscale Sam's Club chain runs second to Costco. With its strong labor relations, low employee turnover and liberal benefits, Costco has been called the "anti-Wal-Mart." Its approach has paid dividends because Costco, based in Issaquah, Wash., hasn't encountered the same community resistance as Wal-Mart when it has sought to open stores. "Retailing isn't rocket science. Costco has figured out the big, simple things and executed with total fanaticism," says Charles Munger, a Costco director for the past 10 years. The outspoken Munger, 82, is better known as Warren Buffett's longtime partner at Berkshire Hathaway (BRK.A, news, msgs), where he serves as vice chairman.Crucial to the chain's success is CEO Jim Sinegal, who co-founded Costco in 1983 with Jeff Brotman, the company's chairman. "Jim would be on any intelligent list of the top 10 retailers of the past century," Munger says. Sinegal, 70, also is one of the biggest bargains among big-company CEOs: In an era of seven- and eight-figure pay packages for CEOs, Sinegal earned a salary of $350,000 in Costco's latest fiscal year, which ended in August. He garnered other compensation of about $100,000. What's more, Sinegal got no bonus last year, after the company determined that it had failed to measure properly the appropriate date for certain option grants from 1996 to 2002, although no evidence of fraud or falsification of records was found. "Jim wouldn't let the board give him a bonus. His view was that the option glitch happened on his watch," Munger says. "How many people behave like that? No wonder everyone loves him." Unlike Buffett, who draws a salary of just $100,000 as the CEO of Berkshire, Sinegal isn't a billionaire. He owns Costco stock worth about $135 million and has options on 1.2 million shares. Sinegal's compensation and demeanor offer a welcome contrast to former Home Depot (HD, news, msgs) CEO Robert Nardelli, who alienated employees with his autocratic style and whose gargantuan exit package of $210 million didn't sit well with shareholders. Video: Behind the scenes at Costco None of this has been lost on the investment community. At nearly $58, Costco trades for 22 times fiscal 2007 projected earnings of $2.58 a share. It has one of the highest price-earnings ratios among major retailers. Target (TGT, news, msgs) shares, at nearly $63, trade for 17 times estimated 2007 earnings, while Wal-Mart, at $48, commands 15 times projected 2007 profits. Though some retailing analysts deem Costco shares expensive, the company seems to qualify under one of Buffett's investment dictums. Buffett has said he'd rather buy a good business at fair price than a fair business at a good price. Berkshire owned 5 million Costco shares at the end of September. Growth and more growth This is a genuine growth story. Earnings per share have increased at a 12% annualized rate in the past five years. Neil Currie, a retailing analyst at UBS Securities, believes the company is capable of generating 13% growth in earnings per share in the next few years and an even higher rate if it gets more aggressive in repurchasing shares. The bullish Currie carries a 12-month price target of $66. With large annual buybacks, Costco could earn more than $4 a share in fiscal 2010, Currie estimates. That could support a stock price of $80. The company plans to open 36 to 40 stores in the current fiscal year and about 35 annually in subsequent years. The store base totaled 474 on Dec. 31, including 371 in the United States. Costco says domestic and international markets ultimately can support more than 1,000 stores. Outside the U.S. and Canada, the most promising markets are likely Mexico, the United Kingdom and Japan. Costco's merchandise sales in its most recent fiscal year rose 14% to $59 billion, while membership fees generated $1.2 billion in revenue. This year, sales are expected to rise more than 10%, reflecting lower prices for gasoline. Sales at stores open at least year, a key gauge of retailing success, were up a healthy 8% in fiscal 2006. Could the company be a candidate for a leveraged buyout? Costco does possess some of the key characteristics that private-equity players seek. It has a strong balance sheet, a predictable cash flow and a durable franchise. Its market value is a hefty $26 billion, but LBOs of that size are doable these days. Costco bought back $1.5 billion of stock in its latest fiscal year and $400 million in the quarter that ended Nov. 30. But it has resisted a large debt-financed buyback like the one under way at Home Depot, and to date it hasn't sought to raise funds through the sale of its real estate. The company takes pride in its impressive financial condition. "Have we gotten to the point in America that balance-sheet strength is a negative?" Munger asks.Currie argues that Costco could keep LBO operators at bay by launching a more aggressive buyback program and taking on a moderate level of debt. "The best way for Costco to protect its independence is to have a high multiple on its stock," the analyst says, adding that an augmented buyback would help achieve that goal. He believes Costco comfortably can repurchase $2 billion or more of stock annually. The dividend yield on the stock is a low 0.9%. Most income from members' fees Its cooperativelike operation makes the retailer's business model unusual. In its latest fiscal year, Costco generated pretax income of $1.75 billion, about 70% of which came from membership fees. An additional $125 million was kicked in by the interest income on the company's cash. Costco earned just $400 million from its stores, for a retailing operating margin of less than 1%. The low margin is intentional and reflects the company's commitment to low prices. As a matter of corporate policy, Costco refuses to mark up any product by more than 15% above its cost. When the company signed a new contract in 2005 with a supplier for Brooks Bros.-style men's cotton and button-down shirts, and got a significant price reduction for a massive two-year order, it immediately cut the price of the shirts to $12.99 from $17.99, notes Richard Galanti, Costco's chief financial officer. Other retailers might have phased in the reduction and captured added profit, but that's not the Costco way. The shirts now cost $14.99 because they are made with better-quality cotton. One attraction in the eyes of a potential buyer would be the opportunity to lift margins. Costco leads Sam's Club in most financial measurements, including total sales, sales per store, sales per square foot of retail space and sales per employee. But Sam's operating profit margin of 3.5% tops Costco's 2.8%. Some complaints on Wall Street If Costco were to raise its margins to Sam's level, it would translate into an additional 65 cents a share of net income -- a large amount relative to the current-year consensus estimate of $2.60 a share. Sinegal has talked in the past about lifting Costco's margins to 4%, but little progress has been made. This has led to some criticism on Wall Street. An analyst report in December, after Costco reported its fiscal-first-quarter profits, was entitled "Still No Margin." Galanti says management has no interest in going private. "The public model has worked for us. We have no plans to change," he says. Video: Behind the scenes at Costco Many Costco shareholders are also happy with the current situation. "Costco refuses to be undersold and thinks so long term that the company will not even remotely degrade the value it gives customers, even if it would fuel a healthy increase in margins and earnings and very few customers would notice," says Ken Charles Feinberg, a co-manager of the Davis New York Venture Fund (NYVTX) and Selected American Shares (SLADX), both run by Davis Selected Advisors. "That's how a great management builds a great business franchise that's built to last." The Davis funds are Costco's largest shareholder, with a 12% stake. Feinberg says that Costco's effective valuation is lower than its stated price-earnings ratio because of the company's conservative approach to depreciation. He recently calculated that Costco trades for about 16 times his projection of calendar "owner earnings." This profit measure adds to operating earnings depreciation expense in excess of what is needed to maintain the existing store base. Feinberg believes Costco is a "compelling bargain" for long-term investors. Sinegal doesn't talk much to Wall Street and wasn't available to speak with Barron's. Even at 70, he maintains a grueling schedule. He aims to visit each Costco store twice a year and is about 70% successful in that goal, Galanti says. This means he's on the road 40 to 45 weeks a year. Costco executives jokingly refer to Sinegal's weekly travels as a "death march" because he usually begins each day at 7 a.m. and finishes at 10 p.m. Dressed in sneakers, khaki pants and Costco's now-$14.99 button-down shirts, Sinegal asks store managers what's selling, what's not and how Costco prices compare with the competition. He has no set plans to retire, although he has talked casually about holding the job for five more years. Because he hasn't set a retirement date, there is no heir apparent. But Costco has a strong group of managers who share Sinegal's passion and vision. Unlike most CEOs, Sinegal has no severance or golden parachute in his contract, which runs less than a page. He insists on one-year contracts, believing the Costco board should have the opportunity to evaluate him annually to determine if he's still up to the job. Sinegal's view is that the restrained terms of his contract send an important message to employees. In the view of Berkshire's Munger, one of Costco's great strengths is that its two founders, Sinegal and Brotman, are still active. Brotman, 64, focuses on real estate. "There is no better site acquisitor in the retailing industry," Munger says. "I'd like to see Jeff get more credit. He deserves it." Costco has chosen to focus on more affluent coastal markets; California alone is home to 30% of its stores. Finding sites for new outlets in densely populated areas is one of Brotman's specialties. The company features products that offer its members large cost savings over what they would pay at traditional retailers. The chain carries just 10% of the items in a typical supermarket, which might stock 40,000 products.The formula works. Costco sold 1.5 million TVs last year and has successfully built what it calls ancillary businesses such as prescription drugs and eyeglasses, filling 26 million prescriptions in 2006. Hungry Costco members bought 63 million hot-dog-and-soda combinations last year at in-store snack bars -- priced at only $1.50 and with free soda refills. The dogs are even kosher. Costco's customer-focused strategy is apparent in its 87% membership-renewal rate. The retailer allows returns on nearly all items at any time, with no questions asked; computers are the lone exception. It doesn't even need to see receipts. This liberal policy has proved costly in the past year because the company is seeing returns of an unusually large number of big-screen TVs. Analysts suspect that many members are taking advantage of the sharp drop in TV prices to return models bought in the past 12 months so they can buy new ones at lower cost. Costco said it is evaluating its TV-return policy but emphasizes that no change will be retroactive and that it still plans to maintain the industry's most generous return policy on electronics. Low turnover among employees Workers get a relatively good deal at Costco -- a point of emphasis for the company, which contends it's also a matter of good business. Despite fewer stores, Costco's sales are about 50% above those of Sam's Clubs, and sales per employee are about $500,000 a year versus $340,000 at the Wal-Mart unit, UBS' Currie calculates. Sinegal was asked in a recent Bloomberg TV interview about the company's health-care benefits. Costco provides health insurance to its 93,000 domestic employees and pays 90% of the cost, which runs about $6,000 annually per employee. Video: Behind the scenes at Costco "We're 100% committed to maintaining this program," Sinegal said. "It works for us, and our people count on it. We think they're entitled to that security." Costco has one of the lowest turnover rates in retailing. Among employees who have been with the company for at least a year, just 6% leave annually. That may be because store employees such as cashiers can earn more than $40,000 a year after only four years on the job. Costco shares aren't a bargain at current levels, but patient investors could be rewarded because the company is an industry leader with top-notch management, a loyal customer base and solid growth prospects in the U.S. and abroad. In Street-speak, Costco may be "under-earning," meaning its profit margins are lower than they need to be. Management is loath to tinker with a successful formula, but margins probably have only one way to go: up. In time, the shares are likely to follow. This article was reported and written by Andrew Bary for Barron's


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Qualities of Leadership Part 1

Setting Goals for your Home Based Business

B2B PR – Planning for Success

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.