BPO or business process outsourcing is a part of the umbrella term outsourcing, which simply stands for a system where the responsibilities of a particular business process can be contracted to a third party service provider. This system was originally associated with manufacturing firms, but over the years that scenario has changed.
Now, BPO is amongst one of the fastest growing industries and has become an integral part of the ITES industry. Amongst the different South Asian countries, where the BPO industry is making its mark, India is quite a prominent one.
Certain factors such as cost advantage, time factor, large number of English speakers, competency, the economy of scale and help from the government have helped the BPO industry to grow in India and best BPO companies to come into existence.
Bangladesh too has started to join the bandwagon of BPO boom in the past few years and riding on robust IT infrastructure, skilled human resource management and a few government services, the income growth of the business process outsourcing (BPO) sector in Bangladesh has risen significantly, said industry people.
“In 2009, only some 300 people used to work in this industry. Now, after nine years, around 50,000 people are working in some 120 companies in the BPO sector,” Towhid Hossain, secretary-general of the Bangladesh Association of Call Centre and Outsourcing (BACCO), told Fintech.
He noted that in 2012, the earnings were only USD 12 million, but rose to USD 300 million in 2018. The figure has grown by more than 25 times since 2012, he added.
On an average, 20,000 to 25,000 people are employed in this sector every year. In 2017, the earnings were USD 230 million, up from USD 160 million in 2016, Hossain said.
Describing the reasons for such a stellar performance, Hossain said this sector has four pillars: legal documents (including company registration), IT infrastructure, skilled human resource management and international business development. Bangladeshi BPO companies have done well in two of these—legal documents and IT infrastructure. “But we are still working on developing skilled human resources and international business development strategies,” he added.
“Forty thousand new employment opportunities can be created in this sector if the ‘service sector’ and the ‘financial sector’ can be included in the BPO sector. Two to three lakh opportunities can be created if we can capture the international market,” he said.
There are currently three types of BPO jobs in this sector viz. data entry, customer service and information analysis. “But if we can build our human resources to more advanced technology such as Big Data, Artificial Intelligence (AI) machine learning and Internet of Things (IoT), then two to three lakh people can get the opportunity to work in this sector,” he added.
Explaining the challenges associated with this sector, Hossain pointed out that to communicate with international clients, proficiency in English is a must. “So we need to include mandatory English lessons along with IT courses at the vocational institutes at every level,” he said.
“Unfortunately, proficiency in the English language is still a hindrance in taking this sector forward,” he added.
Social awareness is another problem in Bangladesh. Many people do not know that BPO services can be a profession, he added.
The sector can be divided into two parts: voice and non-voice. Describing the non-voice part, he said it is a subsection in which employees sit behind a desk and fulfil duties that may not be visible to the customer.
Citing an example, he said, “Closed-circuit television monitoring can also be outsourced. A team of trained people monitor your premises and your project sites to provide top-quality surveillance you would expect from on-site personnel, but in a more cost-effective manner.”
On being asked about the future prospects of the BPO sector, he replied, “After analyzing the current scenario, we can easily envisage that the sector will create employment for around 1 lakh people and generate earnings of about USD 0.5 billion by 2021.”
Muntaqim BPO Services Ltd, for instance, provides accounting services to small and medium-sized businesses and individual taxpayers.
The managing director (MD) of Muntaqim BPO Services, Mahmud Ullah, told Fintech, “We provide accounting services, such as bookkeeping, maintenance of general ledgers, accounts payable/receivable, bank reconciliation and payroll services.”
“Our local market is huge. The sector needs to grow further and we need to explore it,” said Hossain, who is also a leading entrepreneur in the sector.
Pointing out a few challenges in the sector, he said that a company’s accounting information is profoundly confidential. Therefore, both trustworthiness and confidentiality are important.
Digicon Technologies Ltd is another foremost outsourcing organisation in Bangladesh, leading in BPO and IT solutions.
The owner of Digicon, Wahidur Rahman Sharif, told Fintech, “We started our business in 2010 with only 100 employees. Now, around 1,400 employees are working for Digicon.”
“Our expertise lies in providing customer service through contact centres, telesales, HR outsourcing, payroll processing and a variety of back office and technological support services,” he said.
On being asked about the challenges, Sharif said, “There are ample opportunities in our domestic market, such as banking and government, and we should explore them first.”
“The more we gather local market experience, the easier it would be for us to get more international work,” he added. The international BPO market is worth around USD 500 billion. Hence, there are huge opportunities ahead, he said.
The government has also decided to establish more than 500 BPO centres within a short time, Towhid Hossain said.
What are the challenges?
Talking about the challenges confronting the BPO sector, Razib Ahmed, former president of the e-Commerce Association of Bangladesh (e-CAB), told Fintech that there is a lot of potential in the BPO sector, but there are basically two challenges—and only the government can address them.
He said first of all, the government has to ensure high-speed internet in all the villages of Bangladesh. Only then can the educated youth in the rural areas join this sector. The government should invest some funds to ensure rural internet connectivity.
“Secondly, if we want to compete with the two powerhouses in the region—India and the Philippines—we need to ensure the availability of a large pool of skilled personnel that is proficient in English. Again, only the government can solve this problem,” he added.
“When it comes to generating employment, we should look at the success story of the Philippines. Currently, around 1.15 million people are employed in the BPO sector of the country,” he noted.
“It may take some time for Bangladesh but there is huge potential for employment. We have to remember that BPO is a sector that will generate employment for highly educated persons,” he added.
The government should invest here heavily and the private universities must come forward as well as it is they who will mostly benefit, he added.
BACCO president Wahidur Rahman Sharif said Bangladesh has all the elements to make its BPO sector a success.
“If you look at both India and the Philippines, you will see that despite poor infrastructure and internet connectivity, the BPO industry is expected to continue to flourish, mainly because of abundant English-speaking labour supplies and BPO-friendly government regulations there,” he said. “In Bangladesh, youths are increasingly turning towards improving their English-speaking skills. The rates of IT and business education have also shot up many times. The government has also pledged to support this industry. All these indicate that we are in a position to take the industry to the next level,” he added.
He said Bangladesh is also evaluating its competitive cost advantage over other emerging countries. “It is located in a geographically advantageous location for BPOs in terms of its time zone. It’s a big plus for us.”
Sharif said initially, qualified professionals should enter this industry. “This is because we would not be able to get contracts from foreign companies unless we can impress them with qualified professionals. Once we get the contracts, we can employ amateur youths and get them trained by the professionals.”
The problem is, he noted, that there are qualified people here but they do not want to take up the jobs because they prefer more secure day jobs, as the BPO sector feels “too temporary”.
“But in the Philippines, there are employees who leave their day jobs for higher wages in BPO jobs,” he observed.
He added that on the closing day of this year’s BPO summit which took place in the capital recently, some 40,000 curriculum vitae (CVs) were submitted by youths wanting to work or train in the sector. “These youths are very enthusiastic and eager to join the BPO industry.”
The trends that are changing the BPO industry
The latest trends in technology have sparkle to the surface created a tremendous change in the outsourcing field. The BPO world has adapted faster to the advanced world of technology and started greeting the change enthusiastically to make operational delivery predictive and standardized.
Growing technology and its impact on the BPO allows having a clear understanding of the working tasks. Use of Big Data and thereby employing the analytic tools give a better business intuition of the type, frequency and toughness of a work which is coming in, and also how well and how it is addressed. This helps in the smooth – running of the operational delivery and meets the demands of the customers efficiently.
Technologies such as cloud computing, website analytics, and social media networks have a big role to play in this transformation. Businesses that have a competitive edge in today’s scenario are the ones that leverage on the power of technology.
Let’s see how technology has changed the face of the BPO industry:
- Cloud Storage:
The world of cloud has made the process of storage increasingly organized, while data retrieval and sharing has become quick and easy. Businesses stay competitive by moving data to cloud, thereby eliminating the need for unnecessary space and storage, while also reducing the huge consumption of energy. Cloud computing has made the process increasingly systematized, while data retrieval & sharing has become easy and fast. Businesses even continuously stay competitive by moving data to the cloud, thus eliminating the need for unnecessary space and storage, while reducing the heavy energy consumption. Cloud will be the biggest facilitator to Next Gen BPO service providers in building industry specific capabilities and solutions, doubling the outsourcing benefits.
- Automated Systems:
Customers in today’s market expect businesses to be technologically advanced and efficient. Growing leading-edge technology and its impact on the BPO allows a clear understanding of the operational challenges and tasks. Usage of Big Data and thus employing the analytic tools give a better business intuition of the frequency and toughness of a work, and also how effective it is addressed. Robotic process automation has also emerged as a new trend in Business process management sector offering high value creation with notable cost savings and fast time-to-value. The outsourcing service providers can dedicate their whole time in enhancing their service quality while automated systems will take the charge of the operations.
- Diverse platforms to reach customers:
Gone are those days, where phone calls and emails were the only medium between the business, service provider and customers. Today, increasingly effective communication channels, such as instant messengers, mobile apps, social networking platforms, and video calls have gained momentum. Mobile apps are one of the most preferred technologies playing a significant role in changing the way customers approach service providers to resolve any challenges. The latest advances in communication technology are rapidly embraced to facilitate easy and quick resolutions to queries.
- Big data and Analytics:
Real time business intelligence is a critical line of business that can demarcate competition and enable companies to reach a desirable position. The Outsourcing service providers are moving forward by offering innovative and most effective business solutions through technology. Data metrics & advanced tools to assimilate and deliver related strategies will continue to emerge, creating further ripples in the world of outsourcing.