Benefits To Sri Lanka From Business Process Outsourcing Management Essay

Business Procedure Outsourcing is the act of reassigning some of an organisation ‘s repeated non-core and nucleus concern processes to an outside supplier to accomplish cost decreases while bettering service quality. Because the procedures are repeated and a long-run contract is used, outsourcing goes far beyond the usage of advisers. If done good, BPO consequences in increasing stockholder value. The chief difference between BPO and more other outsourcing is that BPO offers companies a manner of accomplishing transformational results much more rapidly. In a typical BPO contract, a service supplier takes over a specific corporate map. Effective BPO encompasses much more than merely altering who is responsible for executing the procedure. In BPO, the outside supplier non merely takes on the duty to pull off the map or concern procedure, but besides re-engineers the manner the procedure has been traditionally done.

Back office outsourcing includes internal concern procedures such as paysheet, Human Resources, charge or purchase while front office outsourcing comprises of customer-facing maps such as proficient support or selling. Largely, BPO maps are contracted non merely outside a company to a 3rd party, but are besides contracted outside one ‘s state to cut down costs, which are besides referred to as offshoring. The BPO industry has emerged as one of the biggest industries offering a overplus of chances worldwide. The advantage outsourcing has to offer easy outshines the drawbacks.

This paper will analyze and see the benefits that can be achieved to Sri Lanka by presenting Business Process Outsourcing. Since the 30-year-old separationist terrorist act has wholly been wiped out, and there are many locations for BPO investing in Sri Lanka which precisely reflects the concern potency since it has achieved a great success in footings of stock market capitalisation.


The purpose of this paper is to analyze ways of presenting the Business Process Outsourcing and the benefits which can be achieved to Sri Lanka from it.



Sri Lanka sets about reinventing its economic system unit of ammunition Business Process Outsourcing. As a preliminary, top Indian BPO companies have already made their presence in Sri Lanka. The Genpact, biggest BPO industry in India, is about to establish its operations in Sri Lanka. Sri Lanka precisely reflects the concern potency where Tata Consultancy, Infosys and Wipro, one time the top 10 globally in footings of stock market capitalisation, have achieved great success. Sri Lankan BPO sector can be grown to go an exciting market topographic point in the part every bit good as internationally.

In the BPO sector, the chief services presently provided in Sri Lanka include back office information processing and administrative work, medical informations written text, insurance claims processing, accounting services, revenue enhancement services, legal papers processing and e-commerce services. Legal services outsourcing is going a strong capableness country. A recent PricewaterhouseCoopers study has highlighted the fact that Sri Lanka and the Philippines together supply up to 20 % of the sum outsourced legal services worldwide. Financial and Accounting services outsourcing sector has had a important growing in Sri Lanka.

Sri Lanka is ranked among the Top 50 Global Outsourcing finishs by AT Kearney. In 16th place in 2009 on this list and it has improved from 2007 where stood at 29th place. The 1st in the list is evidently India. However, there are no other South Asiatic states in front of Sri Lanka except India. Colombo is ranked among the Top 20 Emerging Cities by Global Services Magazine as good. It was in 17th place as of 2009. However, sri lanka has moved down a spot on this list, as in 7th topographic point in 2007.

There are over 300 BPO companies that operate in Sri Lanka. There is a high population of little and average companies. Leading planetary BPO companies that have operations in Sri Lanka include HSBC, WNS Global Services, Aviva, Microsoft, Motorola, IFS, Amba Research, Quattro, Virtusa, eCollge, Valista, Millennium Information Technology and Innodata Isogen.

The taking consumer of Sri Lanka BPO services are the US and the UK while others comprise Australia, Sweden, New Zealand, Hong Kong, Singapore and Japan.


Business Procedure Outsourcing is advantageous as it links to stockholder value. BPO is about optimising concern public presentation to achieve value creative activity.


An of import fact of concern procedure outsourcing is its ability to liberate corporate executives from some of their daily procedure direction duties. Conventionally, executives spend 80 per centum of their clip in direction of inside informations and merely 20 per centum on explicating schemes. But the scenario is unusually different when the concern procedure is outsourced. Once a procedure is successfully outsourced, the ratio can be easy reversed. In such state of affairss, executives get more clip. This saved clip helps them enormously to research new gross countries, speed up other undertakings and concentrate on their clients. This, beyond uncertainty, leads to productiveness betterments.

Cost Savings

One of the most of import benefits and advantages of outsourcing the concern processes is in footings of cost nest eggs. The companies that outsource their work have the entree to the best of endowment and expertness in the BPO field and that excessively at really low rewards. BPO provides quantifiable benefits through improved efficiencies, lower operating expense, reduced paysheet and benefit disbursals, and fewer capital investings. Other BPO benefits include confidence of best patterns, accomplishments, and engineering. It is of import to observe that BPO provides entree to proprietary workflow systems, procedure reengineering accomplishments, and advanced staffing and bringing theoretical accounts, coupled with first engineering delivered by experts.

Improved HR

Improved HR is another great advantage of outsourcing concern procedures. Several market surveies have shown that HR outsourcing can take to be nest eggs in the scope of 20-40 per centum for clients. It besides leads to improved HR. The companies all over the universe are acquiring motivated to outsource their HR procedures and minutess to run their HR maps more expeditiously, free the HR map to concentrate on strategic people patterns that drive growing and add to the organisation ‘s long term success and ease their professionals to add value to their concern. Companies today, necessitate complete domestic and planetary HR bringing through systems and processes that can bring forth economic systems of graduated table to cut down or extinguish their demand to do future investings in rapidly outdated engineering. Companies can salvage between 20-40 per centum of their HR costs, depending on their concern precedences and the gait at which they want to travel.


Another great BPO benefit is that it helps companies to concentrate on nucleus countries. Companies by and large outsource procedures to reapportion answerability and control costs. Thus the direction is in a better place to concentrate on nucleus countries, and non maintain itself engrossed in other countries. Outsourcing besides helps companies to avoid capital outgos, which is in peculiar of import in non-core countries that may necessitate new systems and up step.

Business Process Outsourcing gives enormous aid to the companies to concentrate more on the nucleus countries of the concern. The most of import factor behind the growing in the BPO market worldwide today is an addition in the figure of endeavors that are reexamining their internal operations in an effort to to the full understand their true nucleus competences. In the procedure they are able to concentrate more on their nucleus competences. Business Process Outsourcing gives more freedom to the direction to concentrate more clip, energy, and resources on constructing the company ‘s nucleus concerns. It is because the BPOs assume full duty for pull offing the daily back-office operations.

Strengthens competitory place in market

Organizations that leverage the BPO scheme enjoy improved fiscal and competitory places and have a distinguishable advantage over their rivals in footings of increased client satisfaction, increased operational effectivity, entree to planetary capablenesss, increased hard currency flow and faster time-to-market.

Business Procedure Outsourcing is one of the most effectual methods to accomplish new degrees of success, productiveness and profitableness. BPO provides entree to proprietary work flow systems, process re-engineering accomplishments, advanced staffing and bringing theoretical accounts, combined with first engineering delivered by experts. Outsourcing has evolved as one of the biggest steadily turning industries, particularly in the development states with a big human resource pool owing to the multiple advantages and benefits that it offers!


Apart from other advantages, concern procedure outsourcing has another large advantage which leads to increase in capablenesss of the employees and the company. With this know-how increased capablenesss can be seen. In add-on to making things more expeditiously, employees can spread out their ability to present new merchandises and services to their clients. Then there are the factors of scalability and range. Companies that want to turn internationally must continuously put in substructure and happen endowment around the universe and this is possible merely trough concern procedure outsourcing. Many outsourcing suppliers are already established globally and assist in increasing the capablenesss of the companies that are outsourcing their work to these BPOs.


BPOs provide the direction with flexible and scalable services to run into the client ‘s of all time altering demands which provide a distinguishable advantage to the organisation, particularly to back up company acquisitions, consolidations or joint ventures. With the capableness to offer customized services to accommodate the demands of their clients, the organisations that outsource benefit from increased client satisfaction and good will that go a long manner in increasing their trade name value.


Cheaper labor

Sri Lanka ‘s chief attractive force for BPOs is as a low cost finish. Low labor costs is the primary ground for puting up BPOs in Sri Lanka followed by low operating costs. Tax incentives is the 3rd most cited ground for turn uping BPOs in Sri Lanka bespeaking that authorities inducements have been slightly successful in pulling BPO investings, peculiarly foreign investings.

Labor costs are even lower in Sri Lanka than India, doing it potentially attractive to European companies looking to do nest eggs.

Stability OF THE State

BPO companies are besides concerned about the province of jurisprudence and order. The terminal of the civil war is the best thing that has happened to BPO industry merely like for every other facet. Other states who wanted to work with Sri Lanka on other outsourcing undertakings but were n’t able to make so due to the unsure state of affairs. Since that unfortunate period is now over everlastingly, it is great advantage to offer services and endowment to the universe.


Sri Lankan concern community was of the position that political stableness is the key to economic prosperity. They were besides of the position that peace which was achieved after about 30 old ages should non be compromised at any cost.

Political stableness is of paramount importance to the economic prosperity of our state. Given the peaceable environment that has been created for concerns to look to the hereafter with hope and assurance, the following biggest concern is political stableness which is a must for the state to accomplish economic prosperity.

Business community think of long-run political stableness and bank on a campaigner who has a clear long-run vision to develop the state with consistent policies and the right regulative and legislative model. It provides the coveted platform for the concern community to do long-run investing determinations to drive the economic growing of the state.


It is best known factor that the Sri Lanka is one the prima state who has the hospitability from its history. This is besides one of the great advantages for concern environment in the state.


The BPO can be functioned in the undermentioned Fieldss.

Finance and accounting.

Investings and

Human resources



Real estate and

Other Fieldss such as


The taking skill demand in the BPO labor market is for English linguistic communication accomplishments. All BPOs consisting 95 % including companies that are engaged in supplying services other than call Centre services, sing the ability to talk in English the most of import demand for their work while other outstanding demands are accounting accomplishments and proficient cognition.

The deficiency of skilled people is an issue. To get more and more big participants to the industry, it needs to quickly increase the figure of skilled people. The preparation and instruction for ICT has improved over the last few old ages but BPO sector has a serious defect of labor. The Numberss are still non sufficient to make full the demand.

The brain-drain is besides another factor lending to this issue as many professionals move overseas due to higher wages.

The ICT incursion in the state still remains below 5 % and internet use is good under 10 % of the population.


With the Business Process Outsourcing ( BPO ) market turning at a rapid gait the demand has arisen for timely substructure and skilled work force from Sri Lanka to derive entree in the planetary market.

In add-on it was pointed out that the feasibleness of puting up a dedicated BPO zone with enhanced conveyance and telecommunications substructure should besides be considered

It is of import to do certain that all are focused on this sector and note that this is the following moving ridge among the industries in the state.

Sri Lanka excessively is bit by bit emerging as a BPO finish. Acknowledging the sector ‘s possible for the state ‘s economic growing, the Information and Communication Technology Agency ( ICTA ) of Sri Lanka commissioned a survey to carry on a baseline sector analysis of the BPO industry in Sri Lanka to make full the cognition gaps sing this emerging service sector.


It is clear that much demands to be done for Sri Lanka to sit the BPO moving ridge and attract apportion of the immense potency that this industry offers. The BPO industry could be the following large thing for Sri Lanka ; much bigger than the dress trade, if we get our act together. It is of import that all concerned – all countries of authorities, private sector, industry associations, Chamberss of commercialism must come together and make their spot in guaranting this success for the state as a whole.

Sri Lanka may non be at the top of states involved in concern procedure outsourcing but it is progressively going preferred. Having learnt from India ‘s success in this country it is easy opening up to many foreign companies which are opening their operations in this country.A Business procedure outsourcing in Sri LankaA has been favored by fact that the state has opened an outsourcing trade association geared at assisting it go a prima centre for this concern.

For much success to be realize nevertheless, the state need to concentrate in pulling some of the powerful sellers. Like India, A concern procedure outsourcing in Sri LankaA has much possible as the state has all the properties which has made India rather successful. The state has already captured some of the prima sellers like WNS and RR Donnelley, it stand a opportunity of breaking its connexions with other sellers though its potency is still much overshadowed by India ‘s which has already grown to full potency

Sri Lanka has the advantage utilizing India ‘s cardinal hub to suit many sellers who would be looking for multiple locations to put in. Sri Lanka has invested so much in finance and accounting therefore it is going a favourite pick for many sellers who are runing in this country. Though Sri Lanka has a little population of about 20 million citizens, it produces about 50,000 qualified comptrollers yearly who can non be consumed locally therefore the demand to develop concern procedure outsourcing.

For concern procedure outsourcing in Sri Lanka to win there should be an accent on English linguistic communication every bit good as high literacy degrees and much conformity to the western legal system as it is the place of most influential sellers. In add-on to this, Sri Lanka could meanwhile utilize the installations in India to break its entreaty to aliens

However, it has a far smaller pool of qualified English speech production professionals and has a deficiency of big office infinite and a comparatively backward telecoms substructure.

Despite this, Sri Lanka hopes to make up to 30,000 new occupations in the sector over the following 10 old ages.

Mr Tibble said chances in Sri Lanka would appeal to a limited figure of British houses, which wanted to better productiveness while non giving service criterions.

“ The issue for British companies is how they cope with the turning client service demands when the British population is non turning, ” he said.

“ The lone manner for concern to make this realistically is to utilize a combination of domestic and seaward operations. ”

Sri Lanka could execute good in finance and histories back office work and it has the endowment, graduated table and linguistic communication accomplishments to pull work, ”