IndoBase Business Process Outsourcing

This section throws light on cost savings and cost cuttings through BPOs and outsourcing.

BPO : BPO Benefits : Cost Savings

Cost Savings

One of the most important benefits and advantages of outsourcing the business processes is in terms of cost savings. The companies that outsource their work have the access to the best of talent and expertise in the BPO field and that too at very low wages. Various studies have indicated that for every one dollar invested in BPOs across India, the value derived by the US economy is between $12-14. This is what makes the outsourcing to India an irreversible process. It is a reality that the companies which have shifted their BPO work to India have garnered savings of around 40-50% till now.

American BFSI (Banking & Financial Services Industry) companies have saved more than $6 billion in the last four years by outsourcing their business to India. It is a simple fact that if a bank shifts work of 1000 people from US to India it can save about $18 million a year due to lower costs in India. Similarly, in the field of pharma research and development, firms can reduce the cost of developing a new drug, currently estimated at between $600 million and $900 million by as much as $200 million if development work is outsourced to India. In the US/UK 67-72% of costs incurred by call centers are directly linked to man power costs whereas call centers in India spend only 33-40% of costs on man power. This includes spending on training, benefits and other incentives for labor.

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