The ACM Report on Globalization and Offshoring of Software  [home]

Annotated Bibliography:   B = Focus on BPO/ITES and call centers

ALPER, M. 2004. New Trends in Healthcare Outsourcing. Employee Benefit Plan Review (Feb.) 14-16.

This article surveys a number of the issues associated with outsourcing generally, not specifically offshore outsourcing, in the healthcare field. Administrative costs in health organizations are typically much higher than in other service organizations, such as in the financial industries, because of the low automation rates. There is a trend towards business process outsourcing in the health industries. It includes transaction processing, member management, provider network management, medical management, financial management and data reporting, capitation administration, and call center management. Some health organizations contract out these services; others subscribe to specialized application service providers who provide applications over the Internet. Key issues for health care organizations when outsourcing include whether the vendor utilizes electronic data interchange, leverages offshore outsourcing, achieves high levels of auto-adjudication, enables the organization to increase Internet connectivity with its key stakeholders, and has a good disaster recovery plan.

CASADIO TARABUSI, C. AND VICKERY, G. 1998. Globalization in the Pharmaceutical Industry. International Journal of Health Services 1, 1, 67-105.

Abstract from the National Library of Medicine PubMed. This report on the pharmaceutical industry will be published in two parts. Part I begins with a summary of the study and its conclusions. The authors then provide an overview of the characteristics of the industry and current trends in its growth and structure: production and consumption, employment, research and development, capital investment, firm and product concentration and product competition, and pricing. A discussion of international trade follows, covering intra- and inter-regional, intra-firm, and intra-industry trade. The report will continue in the next issue of the Journal (Part II) with a look at foreign direct investment, inter-firm networks, and governmental policies.

CASADIO TARABUSI, C. AND VICKERY, G. 1998. Globalization in the Pharmaceutical Industry. International Journal of Health Services 2, 2, 281-303.

See the annotation to Part 1 of the paper.

CHATTERJEE, M. B. 2005. Playing on a New Court. The Hindu: Business Line (Sept. 12 Internet edition).

This article describes the small but growing Indian industry for legal business process outsourcing, especially to the United States. Work consists mainly of legal services work such as paralegal and secretarial support, but there is also some higher value services such as contract review, patent writing, litigation research, and general research and review. Companies such as GE, Oracle, Sun, and Cisco have moved portions of their legal departments to India as have some large multinational law firms such as Schwegman, Lundberg, Woessner and Kluth. Some general purpose service providers such as Evalueserve, Office Tiger, and Manthan Services have divisions for legal services, and there are also some Indian companies focused exclusively on legal services such as Pangea3, Atlas Legal Research, Lexadigm, and Lawwave. Some clients are expressing concerns about data security and service quality and about not having the chance to custom train the employees of the service provider.

DOSSANI, R. AND KENNEY, M. 2003. Went for Cost, Stayed for Quality? Moving the Back Office to India. Unpublished Manuscript (Dec.).

This is one of the best general analysis of the offshoring of business processes. Much of the analysis is general, not specific to India. The paper includes analysis of business processes, their digitization, and their separation into components (each with a requisite skill set to perform the operation); a discussion of enabling technologies for offshoring, including digital technologies, increases in telecommunication bandwidth, scanning technologies, advanced telephone systems, and standardized software platforms; the evolution of the globalization of services, and the factors that a firm must consider in deciding whether to offshore an activity (knowledge component of the activity, interactive components of the process, level of separability of the process, savings from concentrating the activity in one location, reengineering as part of the transfer process, and the time sensitivity of the work). The portion of the paper specifically about India examines the country's advantages for offshoring in low labor costs, project management skills, and technological sophistication. A lengthy section analyzes the structure of the Indian business process industry based in part on whether the firms are Indian-owned and operated or multinational and whether they are captive or undertake outsourced work.

IBM BUSINESS CONSULTING SERVICES 2004. Back-office and Customer Care Centers in Emerging Economies, (Oct.). (Available at http://www-1.ibm.com/services/us/index.wss/ibvstudy/imc/a1004899?cntxt=a1000452")

Although the article is about BPO and call centers, it contains information about human-resource issues in offshoring companies in developing nations. Issues include human capital considerations in selecting a site (cost, labor, business, environment, and local experience), recruitment issues (skill shortages of managers, hiring in bulk), recruitment channels (employment agencies, employee referrals, campus recruitment, advertising, internal transfers), problems with evaluating candidates, challenges to training employees (rapid growth, high attrition, geographic dispersion), problems with employee retention and strategies for retention, and issues of global corporate leadership.

I-FLEX 2005. Home Page. (Available at http://www.iflexsolutions.com/iflex/home/default.aspx Accessed June).

Description from Web site. Driven by its mission to enable financial institutions worldwide to excel through the effective use of information technology, I-flex Solutions provides a comprehensive range of IT solutions to the global financial services industry.

LEVINSON, M. 2004. Life After Outsourcing. CIO Magazine (May 15).

Between 2000 and 2002, Nextel outsourced its billing system to Amdocs (an Israeli outsourcing firm), its desktop and help desk support to EDS, and its call center operation to IBM. The article reports on the way that work life changed for four people at IT: the CIO, the vice president of customer billing services, the senior manager in IT operations for outsource vendor management, and the manager of service delivery for data centers.

NAG, B.2004/05. Business Process Outsourcing: Impact and Implications. Bulletin on Asia-Pacific Perspectives.

This article provides a thorough definition of business process outsourcing and covers its various dimensions. The article also provides an analysis of the reasons behind a company's choice to outsource its BPO processes. The main reasons were found to be cost, quality, and time. The article also discusses the impact of business process outsourcing on developing countries and possible future trends for the BPO market.

NICHOLSON, B., JONES, J., AND ESPENLAUB, S. Transaction Mitigating Strategies: The Case of Offshore Accounting. Manchester School of Accounting and Finance, The University of Manchester.

This article reviews the offshoring to India of accounting and financial functions. The paper considers three kinds of firms: fully owned and operated subsidiaries, vendors serving former parents, and conventional outsourcers. Particular attention is paid to transactional costs including such issues as information asymmetry, opportunism, asset specificity, and uncertainty as well as mitigating strategies such as governance form, use of intermediaries, onshore vendor presence, contractual arrangements, monitoring, standardization, and security. The paper is informed by transaction cost theory and data is provided from qualitative analysis of interviews in the United Kingdom and India in seven outsourcing firms and one client.

NICHOLSON, B., JONES, J., AND ESPENLAUB, S. 2004. Offshore Outsourcing of the Finance Function. Proceedings of the 4th APIRA Conference, Singapore.

This paper was presented at the 4th Asia Pacific Interdisciplinary Research in Accounting (APIRA) Conference, organized by Singapore Management University (SMU) in conjunction with the Accounting, Auditing and Accountability Journal, and the Nanyang Business School of the Nanyang Technological University and hosted in Singapore in 2004. Contact the authors for a copy.

POLLACK, A. 2005. Medical Companies Joining Offshore Trend. New York Times (Feb. 24).

The article provides an overview of the increasing use of offshoring of medical technology, especially to India. So far, only about 6% of US companies with biotechnology operations have sent work offshore, and there may be less pressure to do so because of the much higher profit margins in the biomedical fields than in the IT field. Some of the work that is beginning to be offshored includes clinical trials of new drugs, drug manufacturing, back-laboratory benchwork, and embryonic stem cell research (which is restricted in the United States). Another reason that offshoring has been limited is the desire of pharmaceutical companies to be near the research community, for example, Novartis moving to Cambridge, MA.

READ, B. B. 2004. The Lure of Offshore. Call Center Magazine, (April) 30 - 38.

The article gives an overview of many of the issues facing US companies that are considering sending call center work offshore. Some of the issues that are considered are travel burdens for far-offshoring; problems of developing nations that are the homes for most offshore companies (poor infrastructure, bureaucracy, corruption, political instability); data security risks; wage escalation in these countries making the value proposition lower; problems knowing how to manage turnover; problems retaining ambitious, college-educated workers in call center jobs where there are few career paths; problems with choosing poor-quality outsourcing vendors if the US company does not perform its search for a vendor with due diligence; trade-offs between costs and having the work done in near-shore countries; lack of fit for offshoring for companies that have concerns about cultural fit, consumer and political backlash and high start-up costs; loss of cost advantage to near-shoring from currency fluctuation; and some suggestions on how to protect data and limit staff turnover.

RYAN, P. 2005. Challenges Before Indian Call Centres. Domain-b.com (Aug. 27).

The article discusses the current and future situation for Indian call centers. It is expected that North American and UK clients will continue to use Indian call centers, but market maturity and increased competition from other emerging offshore locations (including Egypt) will flatten growth. The author recommends that Indian call center companies invest in reducing agent churn (through training and professional development, transportation services, and onsite recreation and meals), continue their campaign against public sector corruption, choose urban centers strategically, train agents not to give affirmative answers to callers when they are not valid, and promote quality as well as price.

SINGH, S. 2005. BPO 2.0. Business World.

This news article from an Indian business magazine describes recent trends in Knowledge Process Outsourcing (KPO). This is higher-end offshore work that includes such tasks as analytics, equity research, data mining, paralegal services, patent writing and evaluation, preparing tax returns, and technology support for servers and networks. This work pays an hour billing premium that can be three to four times as much as typical BPO work or call centers. Problems with employee attrition, rising salaries, and commodification of call center work are discussed. Many examples of companies doing KPO are given.

TANNER, L. 2004. Why Outsource Now? Electric Perspectives 29, 2 (March/April).

This article, in a publication of the Edison Electric Institute and written by a senior manager at Alliance Data Systems, covers the use of outsourcing (not necessarily offshore outsourcing) in the electric, natural gas, and water utility industries. It is based on two surveys of utility professionals and data from an outsourcing database compiled by Chartwell. There is pressure to outsource to control costs because regulatory practice allows utilities to raise rates only when they have shown that they have taken all steps needed to reduce costs.