ITES stands for Information Technology Enabled Services.

  What does ITES stand for? What does it mean?

  ITES stands for IT-enabled services. IT-enabled outsourcing can be defined as,

• Those outsourcing services that use information technology in the processing and delivery of the service.
• Services are typically delivered through a telecommunications or data network, or other electronic media

Outsourcing takes place when an organization transfers the ownership of a business process to a supplier. The key to this definition is the aspect of transfer of control. This definition differentiates outsourcing from business relationships in which the buyer retains control of the process or, in other words, tells the supplier how to do the work. It is the transfer of ownership that defines outsourcing and often makes it such a challenging, painful process. In outsourcing, the buyer does not instruct the supplier how to perform its task but, instead, focuses on communicating what results it wants to buy; it leaves the process of accomplishing those results to the supplier.

BPO is a term that has evolved over the years, and each time it evolves further, its definition has changed. Some people have not kept up with its evolution and, therefore, refer from time to time to old definitions or descriptions of BPO. It is not simply another term for outsourcing. Every business unit has one core business process; to execute this business process the business unit performs numerous non-core processes. In BPO, strategic value through outsourcing is created by creatively examining the process and changing the way it is actually performed. It is more than just changing who is performing the process. In BPO, the supplier not only takes on the responsibility to take over the function or business process, but it also reengineers the way it is done. That will include either putting in new technology to accomplish the process, or applying the existing technology in a new way to improve the process. In BPO, something about the way the process is currently being done gets fundamentally changed. Often it involves taking into consideration how a particular process in the buyer's company affects and interacts with other departments and functions in the company.

To compete in today's information age, Corporate must re-evaluate the way they do business in light of rapid, unrelenting change in the market place. The need to improve productivity, quality and flexibility while delivering products, services to the customer has led companies to examine their organization structures - and to realize that creating the greatest value does not require them to own, manage and directly control all their assets and resources. Rather, strategic alliances and partnerships with those who provide expertise in particular areas may be the most efficient way to gain results quickly.

In years to come it will be important for big companies to focus on their core competencies and leverage available options for delivering non-core but critical activities. For example aircraft manufacturing can outsource its accounts payable, vendor management etc. as this will not be their core activities but critical to success. BPO represents one of the most important management trends in our time. In the near future, half of the budget of a typical corporate will be outsourced.

It is important to note that while cost is obviously important, BPO engagements are not purely cost driven. Rather, companies deploy BPO solutions for the promise of increased productivity, controllership, improved quality and profits. The emphasis is not only on saving money, but also on making a business grow - an offensive rather than defensive strategy.

Thus, BPO is not just a cost-saving tool but also a strategic tool that provides a competitive advantage. The cost savings come from the sharing of same infrastructure for multiple clients, which leads to economies of scale.

Since the vendors are specialists experienced in particular areas, the company has access to expertise to achieve its goals in areas where it lacks these competencies. Accountability is built in the system since the external vendor operates a profit center and not as a cost center.

• Globalization of Markets
• Increasing price pressures, deregulation and competition
• Traditional reasons - "better, faster, cheaper"
• Realization that it all matters - even non-core processes
• Emergence of the virtual corporation business model
• Size and social organization of modern companies
• Focus on speed of execution
• Need to keep pace with change (especially technological)
• Acceptance of strategic, in addition to tactical, outsourcing
• Increased acceptance of shared service centers

The following trends are anticipated for the finance and accounting outsourcing market:

• The Fortune 100 bunch is expected to use both Tier One providers and niche players for financial systems BPO contracts
• IBM is expected to become a big BPO player and will bring to profitability the PricewaterhouseCoopers BPO unit which it purchased in 2002
• According to analysts, new outsourcing firms will open their doors in India as Indian players are eager to enter the finance and accounting space
• Companies will look to BPO for business process transformation
• Transaction engines and offshore labor arbitrage will be crucial elements to growth

The success of any entity, which provides BPO services, depends on the level of service
delivery it maintains.

This is influenced by the factors such as…

• Technology and Telecom infrastructure
• Quality rigor
• Training initiatives
• H R skills
  

Not true. It really depends upon what is the kind of job you are doing for your client. There are comanies in India who are doing the R&D work for their client. Is that low skilled labor?

• Skilled Manpower Base
  Largest English speaking trained manpower after the US Outsourced offshore software development center of choice today
• Established Credentials
  3 out of every 5 Fortune 500 company outsources software development to India MNCs like GE, Citibank, American Express, Swissair, British Airways outsource their BackOffice operations to India
• Favorable Govt. Policies
  Exemption of Income Tax on Exports of IT Enabled Services Zero Import Duty on IT products 100 % FDI & Dividend Repatriation Allowed
• Cost Advantages
  Cost of manpower in India is a fraction of developed countries India has one of the lowest cost of real estate of comparable countries (Richard Ellis Jan 2001) Telecom costs in India have fallen substantially, expected to fall further with the elimination of all government monopolies by 2002
• Quality Infrastructure
  12 Software Technology Parks (STPs) and Technoparks nationwide With High Speed Data Links Access to facilities of international standards Reduced lead times to set up shop.

• American Express processes internal financial transactions for all of Asia within India and employs 600 people.
• GE Capital employs over 4,000 people and is expected to have 8,000 people by the end of 2003 managing global payroll, call centres, mortgage and insurance claims. The call centre handles inbound and outbound calls for credit card collections and responds to customer queries.
• British Airways employs around 1500 people in its WNS Division to handle an array of back office applications.
• Brigade Solutions runs two contact centres out of India, employing about 500 people that cater to clients like Compaq & Palm.
• Daksh has established a contact centre in Delhi, catering to clients like Amazon, Intuit and PayPal/X.com.
• Spectramind is a Delhi-based company in the CRM and business process outsourcing space, employing about 500 people and catering to some Global 200 clients.
• Compaq Computers India has a tele-support centre at Delhi to provide online technical assistance and support for users of the Compaq Presario range of home computers. Called `Compaq on Call', this is the first such call centre in India catering to the home PC segment.
• The Indian subsidiary of Dell Computer Corp is setting up a call centre in the southern city of Bangalore to service other English speaking countries.
• Bechtel's remote processing centre in Gurgaon provides real-time 24-hour support to other Bechtel employees working on ground infrastructure projects around the globe
  

• Quote from Bill Gates from an April 1999 issue of Time.
  "As a business manager, you need to take a hard look at your core competencies. Revisit the areas of your company that aren't directly involved in those competencies, and consider whether Web technologies can enable you to spin off those tasks. Let another company take over the management responsibilities for that work, and use modern communication technology to work closely with the people - now partners instead of employees are doing the work. In the Web work style, employees can push the freedom the Web provides to its limits.
• " Quote from Inc. magazine January 1999.
  In their book Unleashing the Killer App: Digital Strategies for Market Dominance (Harvard Business Press), Mui and co-author Larry Downes urge companies to perform internally only those activities that can't be performed more cheaply in the open marketplace. When the marketplace in question is the Internet, where vendors with only "dot com" over their head can operate at very low costs, the savings from pushing out business tasks is considerable.
• SOURCE: "Business World", MARCH 20,2000.
  The world's most revered chief executive Jack Welch has introduced a new rule. It is called the 70:70:70 rule. Apparently, it has also been e-mailed to GE employees across the world. Welch has decided that 70% of GE's work will be outsourced. Out of this, 70% will be done from offshore development centers. And out of this, about 70% will have to be done here in India. This ultimately boils down to about 30% of GE's work being outsourced to India.