Medical Outsourcing: Second comeback

Medical Outsourcing Facts :

Medicine is a highly emotional topic, and is highly regulated. There is an almost unlimited market to medicine (as examplified by the thousand dollar full body scan and the $17,000-a-month Erbitux cancer drug). Given patients with an unlimited capability to purchase medicine (either with their own or someone else's money), there is almost an unlimted amount of health care that can be bought. Governments are faced with rationing health care by what individuals can pay, or by providing socialized health care with rationing based on "reasonable health care measures," generally determined by a committee and not the person facing imminent death. In most socialized medical regimes, this means long waits for non-emergency procedures. Or you can have a two-tier system, as in the US, where the government provides nearly half of every health care dollar. Those who can afford to can "jump the queue."

The British National Health Service has been having spending rises of 10% per year, and has been able to reduce wait time maximums for operations from 18 months to "just" 9 months over a five-year period. This does not include the time spent waiting to see a hospital consultant after an initial referral, which can be as long as 17 weeks. Canada, which tries to have 100% socialized medicine, has recently seen an upswing in private clinics making use of quasi-legal loopholes to provide privately paid health care. Some Canadian politicians are even seeking a two-tier public/private system to end the waiting problem. A nationwide poll found that 51% of Canadians favour moving to a two-tier system. In the US, Native Americans set up gambling casinos under their limited legal autonomy, a no-no for non-natives in most states. In Canada, Native Americans are considering setting up for-profit health clinics.
Perhaps part of the answer is medical outsourcing. The BBC has a story about a woman who went to India for shoulder surgery to avoid a painful nine-month wait. Indeed, the Indian state of Maharashtra is trying to become a destination for medical tourists. There are also efforts to outsource radiology reading. India's National Association of Software and Service Companies (Nasscom) expects $800 million in medical outsourcing by 2005.

Medical Billing

Medical billing is the process of submitting claims to insurance companies in order to receive payment for services rendered by a healthcareprovider. The same process is used for most insurance companies, whether they are private companies or government-owned (see Medicare). The billing process begins with the office visit. After the provider sees the patient, depending on the service provided and the examination, the doctor creates or updates the patient's medical record. This record contains a summary of treatment and demographic information related to the patient. Upon the first visit, the provider will usually give the patient a diagnosis (or possibly several diagnoses), in order to better coordinate and streamline his/her care. The treatment, diagnosis, and duration of service combine to determine the procedure code that will be used to bill the insurance. The doctor then either provides this information to a medical coder or other billing specialist. From this, a billing record, either paper (usually on a standardized form called an HCFA) or electronic, is generated. This form includes the various diagnoses identified by numbers from the current ICD-9 manual.

This billing record or claim is then submitted either to a clearinghouse that acts as an intermediary for the information (this is typical for electronic billing) or directly to the insurance company. Based on the amount negotiated by the doctor and the insurance company, the original charge is reduced. The amount that is paid by the insurance is known as an allowable. For example, although a psychiatrist may charge $80.00 for a medication management session, the insurance may only allow $50.00, so a $30 reduction would be assessed. The insurance payment is further reduced if the patient has a copay, deductible, or a coinsurance. If the patient in the previous example had a $5.00 copay, the doctor would be paid $45 by the insurance. The doctor is then responsible for collecting the out-of-pocket expense from the patient. If the patient had a $500.00 deductible, the patient would have to pay the contracted rate of $50 ten times until the deductible was met, at which point the insurance would begin to cover a portion of the charge. A coinsurance is a percentage of the allowed amount that the patient must pay. It is most often applied to surgical and/or diagnostic procedures. Using the above example, a coinsurance of 20% would have the patient owing $10 and the insurance company owing $40.


Medical Coding

FAQ's

What is a medical coding specialist?
Medical coders are responsible for assigning codes to diagnoses and procedures in order to insure proper financial reimbursement from insurance companies and government agencies

What do medical coding specialists do?
Medical coders, also called insurance coders or claims specialists, use a universally recognized coding system and must insure correct code selection for compliance with federal regulations and insurance requirements. The information compiled by the medical coders is used to prepare statistical reports for private clinic use and public health reasons. Knowledge of both the medical and business sides of health care are essential in this detail-oriented field.

Where do medical coding specialists work?
Coding specialists work in health care facilities such as hospitals, clinics, physician practice groups, surgery centers, long-term care facilities, and home health care agencies. Coders are also employed by consulting firms, coding and billing services, insurance companies, governmental agencies and computer software companies.


What kind of training will I need in order to become a medical coder?
In addition to having your GED or high school diploma, you’ll need to complete a six-month to one-year medical coding certificate program. In the training programs, you’ll learn how to evaluate and interpret health records and reports in order to accurately code diagnoses and procedures according to recognized classification systems. Course work will likely include medical terminology, anatomy, physiology, pathology and pharmacology.

Do I need to be licensed in order to do medical coding?
Certification is optional, but highly recommended. The American Health Information Management Association (AHIMA) offers certification in two areas—hospital coding and physician office coding. Coders who pass the national exam become Certified Coding Specialists (CCS) or Certified Coding Specialist—Physician (CCS-P). The American Academy of Professional Coders (AAPC) also offers entry-level certification through its Certified Professional Coder (CPC) and Certified Professional Coder-Hospital (CPC-H) certification exams Medical Transcription


Medical Transcription:

Medical transcriptionists listen to dictated recordings made by physicians and other healthcare professionals and transcribe them into medical reports, correspondence, and other administrative material. They generally listen to recordings on a headset, using a foot pedal to pause the recording when necessary, and key the text into a personal computer or word processor, editing as necessary for grammar and clarity. The documents they produce include discharge summaries, history and physical examination reports, operative reports, consultation reports, autopsy reports, diagnostic imaging studies, progress notes, and referral letters. Medical transcriptionists return transcribed documents to the physicians or other healthcare professionals who dictated them for review and signature, or correction. These documents eventually become part of patients’ permanent files.

To understand and accurately transcribe dictated reports into a format that is clear and comprehensible for the reader, medical transcriptionists must understand medical terminology, anatomy and physiology, diagnostic procedures, pharmacology, and treatment assessments. They also must be able to translate medical jargon and abbreviations into their expanded forms. To help identify terms appropriately, transcriptionists refer to standard medical reference materials—both printed and electronic; some of these are available over the Internet. Medical transcriptionists must comply with specific standards that apply to the style of medical records, in addition to the legal and ethical requirements involved with keeping patient information confidential.Experienced transcriptionists spot mistakes or inconsistencies in a medical report and check to correct the information. Their ability to understand and correctly transcribe patient assessments and treatments reduces the chance of patients receiving ineffective or even harmful treatments and ensures high quality patient care.Currently, most healthcare providers transmit dictation to medical transcriptionists using either digital or analog dictating equipment. The Internet has grown to be a popular mode for transmitting documentation.

Many transcriptionists receive dictation over the Internet and are able to quickly return transcribed documents to clients for approval. Another emerging trend is the implementation of speech recognition technology, which electronically translates sound into text and creates drafts of reports. Reports are then formatted; edited for mistakes in translation, punctuation, or grammar; and checked for consistency and possible medical errors. Transcriptionists working in areas with standardized terminology, such as radiology or pathology, are more likely to encounter speech recognition technology. However, use of speech recognition technology will become more widespread as the technology becomes more sophisticated.Medical transcriptionists who work in physicians’ offices and clinics may have other office duties, such as receiving patients, scheduling appointments, answering the telephone, and handling incoming and outgoing mail.

Medical secretaries, discussed in the statement on secretaries and administrative assistants elsewhere in the Handbook, may also transcribe as part of their jobs. Court reporters, also discussed elsewhere in the Handbook, have similar duties, but with a different focus. They take verbatim reports of speeches, conversations, legal proceedings, meetings, and other events when written accounts of spoken words are necessary for correspondence, records, or legal proof.


Employment:
Medical transcriptionists held about 101,000 jobs in 2002. About 4 out of 10 worked in hospitals and another 3 out of 10 worked in offices of physicians. Others worked for business support services, offices of other health practitioners, medical and diagnostic laboratories, outpatient care centers, and home healthcare services.


Certifications available :
Employers prefer to hire transcriptionists who have completed postsecondary training in medical transcription, offered by many vocational schools, community colleges, and distance-learning programs. Completion of a 2-year associate degree or 1-year certificate program—including coursework in anatomy, medical terminology, legal issues relating to healthcare documentation, and English grammar and punctuation—is highly recommended, but not always required. Many of these programs include supervised on-the-job experience. Some transcriptionists, especially those already familiar with medical terminology due to previous experience as a nurse or medical secretary, become proficient through on-the-job training.The American Association for Medical Transcription (AAMT) awards the voluntary designation, Certified Medical Transcriptionist (CMT), to those who earn passing scores on written and practical examinations. As in many other fields, certification is recognized as a sign of competence. Because medical terminology is constantly evolving, medical transcriptionists are encouraged to regularly update their skills. Every 3 years, CMTs must earn continuing education credits to be recertified.In addition to understanding medical terminology, transcriptionists must have good English grammar and punctuation skills, as well as proficiency with personal computers and word processing software. Normal hearing acuity and good listening skills also are necessary. Employers often require applicants to take pre-employment tests.With experience, medical transcriptionists can advance to supervisory positions, home-based work, editing, consulting, or teaching. With additional education or training, some become medical records and health information technicians, medical coders, or medical records and health information administrators


Job Outlook:
Job opportunities will be good. Employment of medical transcriptionists is projected to grow faster than the average for all occupations through 2012. Demand for medical transcription services will be spurred by a growing and aging population. Older age groups receive proportionately greater numbers of medical tests, treatments, and procedures that require documentation. A high level of demand for transcription services also will be sustained by the continued need for electronic documentation that can be easily shared among providers, third-party payers, regulators, and consumers. Growing numbers of medical transcriptionists will be needed to amend patients’ records, edit for grammar, and identify discrepancies in medical records.Contracting out transcription work overseas and advancements in speech recognition technology are not expected to significantly reduce the need for well-trained medical transcriptionists domestically. Contracting out transcription work abroad—to countries such as India—has grown more popular as transmitting confidential health information over the Internet has become more secure; however, the demand for overseas transcription services is expected to supplement the demand for well-trained domestic medical transcriptionists.

Speech-recognition technology allows physicians and other health professionals to dictate medical reports to a computer that immediately creates an electronic document. In spite of the advances in this technology, it has been difficult for the software to grasp and analyze the human voice and the English language with all its diversity. As a result, there will continue to be a need for skilled medical transcriptionists to identify and appropriately edit the inevitable errors created by speech recognition systems, and create a final document. Hospitals will continue to employ a large percentage of medical transcriptionists, but job growth there will not be as fast as in other industries. Increasing demand for standardized records should result in rapid employment growth in offices of physicians or other health practitioners, especially in large group practices.

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“The Call Center Association of India is going to School” … says Sam Chopra, President, Call Center Association of India

The Call Center Association of India (CCAI) has been in business for some years but it is in the recent months that it has been catalyzed, almost like being taken over by frenzy. I spoke to Sam Chopra, President CCAI and was amazed at the pace of things happening at CCAI. For starters, CCAI goes to school again. Having used up 260000 skilled workers, almost using the entire skilled workforce currently available to India (well almost), the BPO Industry is out to create more employable talent. Lack of skilled manpower, one of the big challenges facing companies in the BPO Industry will now be addressed by this multi-partnership.

The CCAI, in collaboration with Confederation of Indian Industry (CII), the largest Industry body in India, will be launching the ‘eKaliber’ program that aims to train Class XII students across the country. The program (and courseware) has been developed by City and Guilds, a Certifying Agency of global proportions.

bn: What is the CCAI all about?
Sam: The Call Center Association is the Industry body voice of the BPO business in India. It represents interests of the entire BPO spectrum.

bn : How many members does the CCAI currently have?

Sam : We currently have around 40 members, with the likes of Reliance Infocom joining us recently. On the current rate of enrolling members, we expect to be at least 100 my March’06. Our recent strategic partnership with CII has given us the much needed boost. The next three months will see a lot happening.

bn : What is the structure of the Association function and what areas does it address?

Sam : The Association has an Executive Committee, the highest body. We have an elected President, a Vice President, and Treasurer. We have elected Committees - Partnership, Events and Networking, Membership, Regulatory, Human Resource, Telecom, Security, Public Relations. This takes care of most functions of the Association. On a going basis, as and when needed, we form sub-committees for specific purposes.

bn : What is the eKaliber Program? Have you had any success so far in this initiative and how do you see long term benefits out of it?

Sam : It trains them on technology and its use in the BPO business, it teaches them voice, communication and customer handling soft skills necessary to land up a BPO job. It is designed to give them a fillip on PC skills.

For this industry to offer long term careers there has to be a system of specialized training immediately after schooling, as there is for doctors-lawyers etc, which helps them to continue in their profession. We have been talking to various governments, schools and academic bodies for running BPO specific curriculum, with a positive response. Most BPO's are now increasingly targeting a much younger crowd, including students fresh out of schools. It is this lot that we want to nurture and train so that they are ready for the job on their way out of schools.

Many BPO businesses want to move to smaller cities. For this to happen we need a broader base of employees, which this program addresses. Moreover, it shall percolate down to smaller cities and towns. Which means that the business as well as employment will be more broadly based rather than only in urban clusters like Gurgaon, Bangalore, Chennai, Pune etc?

We are in the process of running a pilot of 100 students soon and based on the initial results we shall take future steps on a pan-India basis.

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What does your Client have on mind?

The many things a prospective client looks for in a service provider - integrity, honesty, efficiency and great communication skills. This article will give you an idea about the issues you shall be asked to address by your prospective clients before outsourcing your work.

Reliability of the vendor
Assured quality of service
Total cost of service
Ability to meet delivery deadlines
Data privacy procedure and data security policy
Business continuity and risk mitigation plans
Employee attrition rate and solution to the problem
Legal responsibility to comply with statutory laws and regulations
Work culture and organization ethic

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Why CITU and AITUC failed again?

In Japan they say “don’t mess with things you don’t understand” … had the CITU and AITUC heard about it, they would have either stayed off their shrill pitch or informed themselves with adequate ammunition to target the knowledge sector. One hopes that they have come out smarter from the whole episode. They need to. If they want to target the knowledge worker it has to be on his terms not theirs.

While the unions have been trying to penetrate into BPO and IT industries for some time now, this is their third unsuccessful attempt. We all understand and agree that these industries by themselves are, to say the least, ‘initiated’. This has been due to good salaries and benefits that the IT and BPO companies have been bestowing upon their employees, in order to curb attrition, which is high in these sectors. With rising demand for Indian global services and companies fighting it out for limited trained manpower, market forces ensure that the employees are treated well.

The recently released report by the V V Giri National Labour Institute, an autonomous think tank under the central Ministry of Labour is a vain attempt at bad statistical analysis. I personally know of a few incidents of absolute laughter at this attempt. First, the sample size was very small, second the geographical and company spread was non-existent. There are many more reasons why the report was a very bad attempt, but we will save our breath … hope you got the message.

The report is very harsh on the practices in this industry comparing it with “situations of 19th century prisons or Roman slave ships". Somebody bring the researchers to reality and they must visit the BPO's of today. It may make them feel like they think in the 19th century.

The report is also critical of the fact that many states have exempted BPO companies from labor laws. Interestingly, one state government has gone overboard to ease restrictions, for IT and BPO investment of late, is West Bengal.

CITU has listed about 10 violations of labor law in the BPO sector. A CITU member says “Any attempt to form a union or association by the employees is being curbed by the threat of dismissal”. Another comments “There are no rules to govern the working conditions, and occupational hazards have occurred in several cases without any remedy”. But they have not given any instances of such gross violations. Neither have they responded to the industry’s challenge of visiting these BPO's and IT Software companies to prove their claims in real situations.

Interestingly the BPO workers though not in favor of unionization have shown almost no reaction. They believe they have enough negotiating power in the current scenario and are well taken care of. An employee of Genpact who did not want to be identified said “we have an open door policy and can walk up to the CEO in case we need to”. Another added “Our top management dines with us in a common cafeteria, so where is any hint of discrimination”.

An interesting incident would put the unions under white light: Once when GM was undergoing a bad case of cost overruns, a few top Finance guys got carried away and recommended that one specific plant be closed immediately and two more put for consideration of closure. The President in-charge who happened to be a man of very sharp wits said “Lets close down all our manufacturing plants, and then we will save a lot on costs”. The message was not lost on the meeting. Everybody got into a lighter mood and the plant continued functioning.

The Unions must first understand the industry before shooting off in the dark. Though we do not need a Union for the IT and BPO industries, but we need these Unions to work constructively in a partnership with industry bodies such as CCAI (Call Center Association of India) and NASSCOM (National Association of Software and Service Companies).

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Middle Management in Offshore Call Centers

Whenever you read any negative article about the offshore call-center industry, it seems to be based around one or more of 5 issues.

• Telecommunications
• Infrastructure
• Accent
• Agent Quality
• Middle Management

In reality, the top 4 are now becoming non-issues. Offshore vendors quickly realized that western clients would just not tolerate weak infrastructure. As for accent, the sheer quantity of applicants for call center jobs means that this really isn’t an issue in the good centers The availability of good quality agents is far higher in these offshore locations. However, for many centers, little movement has been made in terms of improving the quality of middle management. As some of the offshore vendors experience triple digit growth, the problem is becoming even more apparent.

The overall problem stems from a lack of understanding on how important the whole issue of matured middle management really is. Visit a call-center and you find that it is beautifully designed, has stare of the art technology and salaries to match for their staff but if the team-leaders and supervisors are weak, then failure is certain. Making weak middle management into strong middle management is a serious issue with no quick-fix solutions, a problem that many companies simply choose to ignore.

There are four problems within many of the offshore vendors themselves, which make this issue even worse.

1. A lack of focus on the call-center industry

So many offshore vendors started life as something other than a call center company. Some were IT companies, some were utilities but very few were call center companies. For example, in India, a lot of software companies all of a sudden felt that the offshore outsourcing model they have perfected for software development could easily be transferred for the call center industry. This is true to an extent but call center agents need to be managed differently. This kind of company simply doesn’t have the expertise to be able to transfer the required skills to its middle management without proper transition.

There is another worrying trend. Take a look at the websites of most offshore outsourcing companies and they say they do all forms of business process outsourcing. This can tend to mean, “We’re not really sure what we can do but will take any work which comes our way”. Such a lack of focus doesn’t inspire confidence with serious clients.

2. “The how difficult can it be syndrome”.

Many people seem to think “How hard it can be to make or receive a few telephone calls?” If it were that easy, every call-center in the world would work perfectly and I have yet to see one that is. In reality, a call center is an entity where there are many conflicting pressures such as the need to drive down costs, the need to motivate staff and the need to consistently improve quality. It takes years of experience to even understand these finely balanced issues let alone solve them. Very few vendors realize the value of experienced staff who not only understand their operational responsibilities but also the concept of managing a team and/or a company.

3. “The how difficult can it be syndrome”.

Many people seem to think “How hard it can be to make or receive a few telephone calls?” If it were that easy, every call-center in the world would work perfectly and I have yet to see one that is. In reality, a call center is an entity where there are many conflicting pressures such as the need to drive down costs, the need to motivate staff and the need to consistently

improve quality. It takes years of experience to even understand these finely balanced issues let alone solve them. Very few vendors realize the value of experienced staff who not only understand their operational responsibilities but also the concept of managing a team and/or a company.

4. Little focus on training middle management

In reality, they pay little or no attention to the development of their middle management personnel. The middle management is like the foundations to a house: if they are weak, nothing may appear wrong at first but when problems do appear, the whole house can fall down.

It is relatively easy to spot these vendors. Ask them detailed questions about their claims surrounding their middle management. They are simply not used to having to justify their claims and are easily flummoxed.

What then is the way out!

However bad it may seem, there is light at the end of the tunnel and we have proved that it is possible to make a difference. Here’s what we can recommend.

1. Bring in experience

There is no alternative to having people who have been there and done it. Initially, this means bringing in an entire management structure with experience. This team should then mentor your future middle management. It may cost more in the short term but it is the only way that has proven to work. Clients like it too as it proves you are serious.

2. Focus

Decide what you want to be good at and do it. Develop skills in one area such as list-cleaning or customer service or research. The management of customer service is very different to managing outbound. . It requires a completely different discipline. If you spread yourself too thinly, the chances of failure increase multifold. The hard part comes when you are offered work, which falls, outside of your core competencies. Always remain focused on where you want to be and don’t be distracted for short-term gain. Learn to say “no”.

3. Structured skilling, training, exposure and mentoring

With the fast-paced life of the call-center, it’s often very difficult to step away and see where things are going. Unless something’s broken, there generally isn’t time to fix it. The training and development should be structured in an effective manner rather than short term “quick-fixes” to short-term problems. You need to fully examine what skills your middle managers need and design a curriculum to be delivered over the next 3-4 months. It is worthwhile bringing in outside trainers to evaluate your requirements and deliver the training is these skills don’t exist in-house.

4. Don’t give the jobs to kids

A major mistake is to promote young, fresh graduates too early. This is not just the failing of call-center companies but a common problem where companies try to hire young, cheap and enthusiastic graduates. It’s a policy that rarely works. Young graduates tend to lack the “life-skills” which is often the difference between good and bad middle managers. A key component to a successful middle manager is that they need to understand how to get the most out of their people.

Conclusion
What I have said might seem harsh but it couldn’t be further from the truth. The failure of our industry to meet these challenges tarnishes the reputation of the entire offshore industry. However hard we have personally worked to overcome these issues, companies will still think twice before using our services if offshore outsourcing has a bad image. The simple truth is that “recruiting, developing and maintaining” quality middle management staff will be the single most important factor for the development of the offshore call center industry.

There is strong evidence to suggest that middle managers in offshore locations will outperform their counterparts in western nations due to their high work ethic, loyalty and attitude. There is light at the end of the tunnel and if you can rise above the day-to-day running of the center to develop and implement a long-term strategy for your middle management. It’s a never ending battle as other centers will be looking to take your quality middle managers but it is a battle which will produce amazing results if adopted successfully.

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CII launches eKaliber  

There is no denying the fact that India has been able to position itself as one of the big league players in the BPO world. The BPO and outsourcing story has been a resounding success for India. However, several other countries are emerging as a favorable destination, primarily because every one wants their share of the outsourcing pie.

It has therefore become imperative for India to constantly evolve and improve to maintain its position as a value player and the primary destination for outsourcers. Towards that aim, the Confederation of Indian Industry (CII) is preparing to launch a stream of innovative initiatives along with its affiliate association ‘”Call Center Association of India (CCAI)” aimed at taking the BPO success in India to newer heights.

Topping the list of initiatives that CII – CCAI are launching is a Specialized Training and Certification program called “eKaliber” is being formally launched on the 2 nd of September at the Round Table on “HR issues facing the BPO Industry”.

As is very well known the BPO success in India is because of the large pool of educated English-speaking population. The vision is to bring about suitable changes in our vocational education and take this to every nook and corner of the country to create a much larger workforce to make this BPO success phenomenon a norm for the decade ahead. CII and the CCAI are launching the eKaliber initiative along with City & Guilds, a premier global organization specializing in the field of vocational qualification and certification. City & Guilds has developed a Curriculum, which has been endorsed by CII and CCAI - aimed at preparing final year school children to be successes in the BPO Sector.

The advantages to the Industry would be enormous - providing a uniform scaled base to choose from cost savings, predictability of success of campaigns and many more.

The CCAI which is re-christening itself as BPIAI or Business Process Industry Association of India to represent a wider base of organizations active in the BPO Sector in India, has become an Associate Member of the CII in May this year and we are really excited about working together in an industry which is growing at an impressive rate of over 40% per year” says Sam Chopra, President of the CCAI.

Earlier this month, a delegation of the CCAI met with Mr. Bhoopinder Hooda, CM Haryana and Mr. Ajay Maken, MP, and apprised them with the initiatives that the CCAI had undertaken to foster sustained growth of the BPO Industry - including vocationalization and chalking a career path for the BPO workforce, and Data Security amongst others.

Mr Ravi Pillai, Country Head City and Guilds (South Asia) informed that CII and City and Guilds are addressing the issue of training and certification of the work force in different areas of work through the CII’s Skill Development Initiative, which has already been launched a year ago. For the current demand supply gap situation in the BPO sector, the industry will have to impose a self discipline and make sure that they hire only duly certified candidates – till certification becomes a norm. Interested candidates seeking careers in this area will then themselves undertake the certification program, as is in any other profession.

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Kinds of jobs available in BPO

The basic question that strikes a young mind seeking a career is that what is a BPO Career all about which sometimes leaves him or her in a confused state. A BPO career revolves around the core activity of delivering business process outsourcing services. This involves voice (telephone) and non-voice (email, chat) based customer interaction services, transaction processing, telemarketing, technical support or analyzing of customer specific data. It also involves back-end jobs such as claims processing and processing of Finance & Accounting transactions. In short we can say that the BPO industry has doors open for every field.

In a growing BPO organization, career opportunities exist across various facets of the business - extending from the core contact center to support functions like HR, legal, marketing, quality, administration etc. Opportunities in the contact center include customer support, telemarketing, technical support and multilingual support (which require people having knowledge of foreign languages like French, Spanish etc.). Opportunities also exist for experienced people from various backgrounds and industries. - like hospitality, services and the retail industry.

1)In the last financial year, ITES-BPO companies were the largest recruiters in the IT/ITES sector adding about 70,000 jobs. This sector is estimated to register a growth of about 40% in FY 2004-05 to reach revenues of US$ 5.1 billion.
Source: NASSCOM

2) India would require over a million people by 2008 to meet the demand of the ITES sector.
Source: Hindu Business Line

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Careers in BPO

We put such a great value on education that this event usually represents the fulfillment of a big part of parents’ dreams for their children.

Graduations bring pride, happiness and hope to Indian families. But the sobering reality after the graduation rites is that thousands of new entrants to the labor force will have to find jobs. And the perennial situation is that there are too few jobs to go around. Many of these young hopefuls end up as part of the unemployment statistics.

Low end services : At this level of the business, one might start with Voice or Non-voice services depending on the individual’s skills to qualify for the same. Most opportunities lie in Operations, given the sheer number of people needed for operations. Though there are opportunities in other departments, but their numbers are significantly low.

Voice Based Services – telephonic interactions, be it Inbound customer queries or Outbound Telemarketing. Qualification needed to start with might be as basic as good command over the English language (both oral and written). To achieve growth to the next level, of Team Leader position, one might need at least 2 years of good operational experience at the starting level, coupled with Domain Knowledge and specific skills. Management and Team leading traits are a must have requisite.

Non-voice Services - email, chat based customer interaction services, transaction processing, telemarketing, web based technical support or analyzing of customer specific data. It also involves back-end jobs such as claims processing and processing of finance & accounting transactions.

To achieve growth to the next level ( within the lower steps of the value matrix in BPO Services) to the Team Leader position, one might need at least 2 years of good operational experience at the starting level, coupled withal round domain knowledge and specific skills. Management and Team leading traits are a must have requisite.

High End Services : For the very high end of the value chain, services like Data Analytics and Equity research, the underlying capabilities of the individual are severely tested. The basic qualification could be at the tertiary level. Opportunities exist from nanotechnology research to genome research and much more around it, everything extremely high end and needing very special skills. Needless to say this is a high profit low volume business, and skill sets in these domains are paid for through the roof!

In the current situation in the India, one sector that is counted on to provide jobs to new graduates, and others who have been scouring the job market for a longer period, is the business process outsourcing or BPO sector. This includes the most familiar type of BPO operation, the call centers, as well as a range of other activities, such as medical transcriptions, accounting and other back office operations, and higher value-added ones, such as animation and other creative services and software development. These services are provided either by local firms under contracts with the outsourcing global firms or by foreign firms that either use the outsourced services directly or also for sale to global firms. These BPO operations usually pay relatively higher salaries than other industries, and this is why job seekers, including graduates from the best schools, vie for the still limited number of jobs that they offer. But BPO operations definitely remain a growth area in the Indian economy as the process of global economic integration proceeds.

Moreover, like free trade in general, outsourcing brings the benefits of increased specialization and bigger markets, such as greater efficiencies and the so-called economies of scale and scope, increased employment, and lower prices of goods and services. The benefits accrue not only to the developing countries that provide the labor services but also to the developed countries that purchase them.

With such clear and substantial benefits, we should therefore aim to attract as much BPO activities as possible to maximize our country’s potential gains from this global trend.

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Doing an F5 on Technology

The time for a technology refresh. While contact centers are evaluating an enticing new technology called VoIP. It can simultaneously increase productivity and the bottom line. Contact centers may soon be opening their wallets to everything from voice over IP (VoIP), to speech recognition and analytics, to performance management technology. Anything that will get them a fresh breath of technology.
"The mantra is to do more with less," says Darren Voice, principal with a N.J based technology firm. He adds "The best products are ones that immediately improve the bottom line. It's about the ability to reduce cost before anything else, increase in revenue and improve productivity are almost a taken for granted by today’s buyer."

VoIP: Is it the next Killer App

VoIP is going to be at the top of most wish lists, said Don Van Doren, founder of Vanguard Communications Corp, an independent consulting company that focuses on the contact center. "It's a hugely important issue, and part of its importance is that all contact centers will have to go there sooner or later," he said. "As existing gear ages and contact centers start moving to new equipment, it's going to be IP based. All the vendors are focusing R&D on IP architectures. Things are clearly moving that way. An idea whose time has arrived."

There may not be a business case for it right now for some but for others, it's a no-brainer. Communications Data Services (CDS), Iowa, an order fulfillment service provider for publishers and direct marketers, is one of those contact centers in no rush for VoIP. "VoIP's maturity and reliability have not been proven to us conclusively though there stands a strong case for its immediate use," says their senior product manager for customer service systems. "It would be a significant investment for us to rebuild our network to accommodate VoIP and we may want to take some time to act on it."

Another source from a large Call Center in Gurgaon says "I don't see significant savings to justify transferring our existing contact center to VoIP. We've got a reliable network in place right now, and the costs and T1 charges don't outweigh that right now." With VoIP, the source said, “Contact centers wouldn't have to share bandwidth between data and voice traffic; no more separate circuits or management systems”. He said they would need to see large contact centers use the technology successfully and reliably for him to reconsider.

"A mid-sized contact center I visited kept its old systems as a backup because there were so many problems with VoIP," he said. VoIP, however, may be as close to a killer app as the contact center has right now, especially for multi-site centers.

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ROI on Technology Spend

• Consider the model on which your selection is based; it is best based on your organizational strategy. ROI may take a different look when seeking cost savings versus driving revenue.
• Understand and fully account for miscellaneous costs, including staff, technology, network, maintenance, internal support, etc.
• Clearly define benefits, with workforce as the focus. It is where most of your return comes from.
• Let savings play out if you say you're going to be more efficient then the options are - cut staff, reallocate staff, or let attrition play out.
• Always follow through quickly to assess (and quantify) results and benefits after implementation to boost inertia for the next business case.

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Must-have features of a Contact Center Solution

A blended inbound and outbound contact center solution should provide sophisticated tools for companies looking to offer the highest level of customer relationship management and enhance productivity gains. It should:

The CT ( Computer Telephony) Server Solution should offer you the following features:

The Supervisory Controls should be capable of the following:

Administrator Capabilities should incorporate the following:

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Performance Management

What you cannot measure, you cannot manage is a time tested management truism. To manage effectively organizations must develop a balanced scorecard to measure their operations performance against stated goals. The indicators should be used to monitor key drivers for performance, thereby improving the efficiency in value delivery of services.

Most logically, the scorecard is a set of cause and effect relationships in events. A performance matrix must lead to a success matrix mapping. Every operations function must research and measure relationship between tacit knowledge and financial performance and how they influence each other.

The common statistical and analytical methods used to evaluate and measure include regression, correlation and semi-structured interviews. The success map being a dynamic performance indicator is updated regularly to reflect the complex relationships among key performance drivers of a process. The result can be applied to processes that are highly dependent on knowledge.

Office Design and Performance

One factor that affects knowledge worker performance that isn't well understood is the physical work environment - the offices, cubicles, buildings, and mobile workplaces in which knowledge workers do their jobs. There is a good deal said about this topic, but not much known about it.

A list of the few things about the relationship between physical work environments and knowledge worker performance:

• Knowledge workers prefer closed offices, but communicate better in open ones.

• Knowledge workers cluster in particular geographical areas.

• Knowledge workers like to move around in the course of their work.

• Knowledge workers collaborate freely.

• Knowledge workers work in the office.

• Knowledge workers communicate with people who are close by.

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Leads Management

Lead Management Heart of the Direct Marketing Business

With the right approach you can:
" Generate more leads
" Reduce the sales cycle
" Convert more leads
" Increase sales revenue
" Generate greater profits
Read how...

Introduction:
In the US, businesses will spend billions of dollars in 2004 to market their product and service, and most of that money is wasted. Most of this money comes from small to mid-sized businesses that can rarely afford to mis-spend a dollar. But how can most marketing dollars be wasted? Any marketing that does not directly create sales or qualified leads is wasted dollars, and while the Fortune 500 might have deep pockets to spend on advertising, small to mid-sized businesses do not. This is first among a series of article which discusses in depth, the subject of Lead Management.

Qualified Leads!

In the US, businesses will spend billions of dollars in 2004 to market their product and service, and most of that money is wasted. Most of this money comes from small to mid-sized businesses that can rarely afford to mis-spend a dollar. But how can most marketing dollars be wasted? Any marketing that does not directly create sales or qualified leads is wasted dollars, and while the Fortune 500 might have deep pockets to spend on advertising, small to mid-sized businesses do not. Listed below are a few of the key challenges that need to be overcome: generate more leads, reduce the sales cycle, convert more leads into customers, Increase sales revenue, generate greater profits, improve the return on current marketing investment, follow a well defined and fully integrated strategic marketing plan without increasing headcount or overhead, Train your business to be market-driven. Reliably predict sales forecast. Improve customer loyalty and retain more customers.

Companies must elevate their lead analysis from tracking response rates to measuring close rates, contract values, and profitability by each campaign. Unfortunately, most traditional sales and marketing processes and technologies struggle to provide a close-looped system that can generate such vital information, and provide guidelines for appropriate action. In fact, most companies lose track of between 40% and 80% of all leads somewhere along the sales cycle.

Let us look at very closely representative statistics, for Lead Loss Rates:

Limited Lead Acceptance and Follow-Up Up to 20%
No Visibility into Marketing Effectiveness Up to 10%
No Control of How Lead Is Up to 8%
Wrong Territory Assignment Up to 5%
Poor Qualification Up to 20%
Web, E-Mail, Fax, Phone, Spreadsheet, Other Docs Up to 10%
Disparate Sales and Marketing Systems Up to 15%
Poorly Defined Roles and Processes Up to 10%
Lack of Process for Handling Immature Prospects Up to 20%

Many companies spend a significant percentage of sales revenue on marketing campaigns designed to generate even more revenue. A large part of that effort is dedicated to creating leads or opportunities to be pursued by their sales teams and channel. Customer management software is great for consolidating information about the customer. However, the process of acquiring customer leads, turning the leads into solid prospects, and converting the prospects into sales-all without losing track of potential leads-remains a major hurdle for many businesses.

Continued in the next edition...

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Scripts for the effect you are trying to achieve

While shooting arrows at a target if the shooter moves his position or the way he holds the bow or the way he releases the arrow, it is akin to moving the target. So is a Script!

Some relevant thoughts on good sales scripts:
Instead of strict 'scripts' try to include effects you are trying to achieve. Being rigid will feel unnatural to agents as they are forced to say something they would not normally say. The alternative is to 'script for an effect' your people need to achieve. This then leaves people to use words and phrases they feel most comfortable with and which come most naturally. More importantly, it comes across as very natural and genuine to your callers and sets up the rest of the interaction. Ensure that you actively encourage diversity of words phrases and tones.

The advice is a against a formulaic approach - doing the same for everyone. Some of your team will need more help than others and it may well be that they would benefit from a script as their confidence builds. However, others will not need it and it could well stifle them or make them feel as if they have to be the same as everyone else - so be careful. In terms of what each of them needs, simply ask!

They will obviously know what is expected of them and they will obviously know that it is up to them to achieve. Your role is to 'support' and facilitate not do the job for them. Once it is clear to them what their responsibilities are ask what help they need to achieve their goals. For the most part having scripts available to your sales force is the best thing to do especially with an unproven Center.

With sales, the target is always moving, your sales staff will be bound to make adjustments so that you can hit the target. Be a doer.

Practice does not make perfect. Best practices make perfect.

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Information Security Management Systems: ISO 17799 / BS7799 / BS 7799 Security Standards and Philosophy

BS7799-2:2002 is a standard specification for an Information Security Management Systems (ISMS). An ISMS is the means by which Senior Management monitor and control their security, minimizing the residual business risk and ensuring that security continues to fulfill corporate, customer and legal requirements. It forms part of an organization’s internal control system.

ISO 17799:2005 is a standard code of practice and can be regarded as a comprehensive catalogue of good security things to do.

ISO 17799 is the most widely recognized security standard. It is based upon BS7799. BS7799 is the most widely recognized security standard in the world. Originally formulated in the mid-nineties, it was formally put together in a useable form in May 1999. It progressed into BS EN ISO17799 in December 2000. BS 7799 (ISO17799) is comprehensive in its coverage of security issues, containing a significant number of control requirements.

Compliance with it is a hard task even for the most security prepared of organizations. The areas covered are:

Risk analysis – is the determination of what control (and expenditure) is appropriate for given situations or specific areas/systems/applications. It forms the baseline for an organization’s Information Security Policy.

Contents of ISO 17799 - ISO 17799 is an extremely detailed security standard, organized into ten major sections. Each section covers a different topic or area. The objectives of each of these are as follows:

Security Policy
To provide management direction and support for information security.

Business Continuity Planning
To counteract interruptions to business activities and to critical business processes from the effects of major failures or disasters.

System Access Control: 1) To control access to information 2) To prevent unauthorized computer access 3) To prevent unauthorized access to information systems 4) To ensure the protection of networked services 5) To detect unauthorized activities. 6) To ensure information security when using mobile computing and tele-networking facilities.

System Development & Maintenance: 1) To ensure security is built into operational systems; 2) To ensure IT projects and support activities are conducted in a secure manner; 3) To prevent loss, modification or misuse of user data in application systems; 4) To protect the confidentiality, authenticity and integrity of information; 5) To maintain the security of application system software and data.

Physical and Environmental Security: To prevent unauthorized access, damage and interference to business remises and information; to prevent compromise or theft of information and information processing facilities; to prevent loss, damage or compromise of assets and interruption to business activities.

Compliance
1) To avoid breaches of any criminal or civil law, statutory, regulatory or contractual obligations and of any security requirements
2) To ensure compliance of systems with organizational security policies and standards
3) To maximize the effectiveness of and to minimize interference to/from the system audit process.

Personnel Security: To reduce risks of human error, fraud, theft or misuse of facilities; to ensure that users are aware of information security threats and concerns, and are equipped to support the corporate security policy in the course of their normal work; to minimize the damage from security incidents and malfunctions and learn from such incidents.

Security Organization: To manage information security within the Company; 2) To maintain the security of information when the responsibility for information processing has been outsourced to another organization. 3) To maintain the security of organizational information processing facilities and information assets accessed by third parties.

Computer & Operations Management: 1) To ensure the correct and secure operation of information processing facilities; 2) To ensure the safeguarding of information in networks and the protection of the supporting infrastructure; 3) To minimize the risk of systems failures; 4) To protect the integrity of software and information; 5) To maintain the integrity and availability of information processing and communication; 6) To prevent damage to assets and interruptions to business activities; 7) To prevent loss, modification or misuse of information exchanged between organizations.

Asset Classification and Control: To maintain appropriate protection of corporate assets and to ensure that information assets receive an appropriate level of protection.  

Roadmap - The best starting point is often an assessment of the current position, followed by identification of what changes are needed for ISO17799. From here, planning and implementation must be undertaken. Legislation - A growing number of legislative mandates are appearing in the area of information security. In Europe , Data Protection Legislation is now fully operable. The UK 's Data Protection Act is fairly typical and contains eight Data Protection Principles. These state that all data must be:

Processed fairly and lawfully
-Obtained & used only for specified and lawful purposes

-Adequate, relevant and not excessive
-Accurate, and where necessary, kept up to date
-Kept for no longer than necessary
-Processed in accordance with the individuals rights (as defined)
-Kept secure

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COPC

The COPC-2000 ® Standard was developed in 1995/96 by individuals from Microsoft, Motorola, American Express, L. L. Bean, Novell and other customer-focused companies who were concerned with the level of service quality provided to customers by customer service provider organizations. It is the most demanding standard in the customer contact industry. COPC is recognized worldwide as the leading authority on the operational performance of customer contact centers.

As with ISO any other quality program, COPC is an audited, documented process and certification demands annual renewal. The COPC standards were necessary as a majority of customer service operations and call centers were having trouble relating to existing standards which were very manufacturing-oriented.

Some examples of standards include COPC's expectation that every employee know his or her company's mission statement.

24/7 Customer was the First Company in India to Earn the Prestigious COPC-2000® Certification. This came immediately after 24/7 Customer successfully secured the highest Baseline Assessment score to date by any organization using the COPC-2000® Standard (from COPC, the leading authority in customer intensive operations standards.

Accenture Customer Contact Center in Bangalore is the World’s First to Receive COPC Gold Standard Certification, the highest rating for Quality Customer Service.

Some FAQ's on COPC :

What is COPC?
Customer Operations Performance Center is an international standard for quality management, specially for call centers.

What is the purpose of the COPC Standard?
To define management & operational requirements for customer service providers (CSP).
To ensure services provided by the CSP meet the CSP’s clients & end users expectations.
To provide CSP’s with a standards framework within which they can define & implement improvement efforts.

Who are the users of COPC Standard?
Applications - Customer Service, Order Management, Tech Support, Outbound, Fulfillment, Collections, E-Commerce
Industries - Telecommunications, Financial Services, Consumer Products, Consumer Services, Industrial Products, Utilities, Healthcare, and Government

What is the purpose of COPC Standard?
The COPC Model works on increasing Quality, Service, Customer Satisfaction thereby leading to decrease in total cost of operations while getting better profitability.

What is the duration and expenditure involved in COPC Certification?
Time Frame: 1 Year
Resource Required: At Least one registered Coordinator
Cost: Starts at 25 lacs and may go onto 75 lacs depending on who you choose as your consultants.

Can ISO be a starting point to COPC?
Yes. ISO implementation leverages - Standardized Processes, Continual improvement through Measurement and Analysis of Processes and Performance, Client & Customer Focus Orientation.

COPC enhances Standard - P providing Call centers specific Measurement Criteria and their Benchmarks, Identifying and qualifying specific Data recording requirements, Financial Performance Improvement is also part of COPC audits.

Making the Right Choice

There are quite a few standards to choose from - ISO, COPC, STI, HDI, SSPA, SCP and many more. Natural evolution will see more standards in the next few years. The marketplace will determine the survivors. As you consider certification and adopt, implement and sustain a Standard in your organization, keep the following in mind:

1.) Set clear objectives for the effort. These can be financial, non-financial, or more likely some combination. They can be oriented towards improving short-term results such as operational efficiency or longer-term results such as improved customer satisfaction and employee retention. Consider the multiple cultures the Standard will impact to ensure a successful implementation.

2.) Test a Standard for its Return on Investment (ROI). Be sure to segment your analysis into the relevant time frames. Year One will be the investment year (although you should expect a break even, at minimum); year 2 and beyond will be when significant gains are obtained and sustained. If you don’t get a high ROI, you may be using a Standard that isn’t rigorous or consistent enough to produce the desired results. In this case, you have likely pursued as certification, "a plaque on the wall" vs. true improvement which comes with performance-oriented standards. Regrettably, I can assure you there are "Standards" out there that require little effort and you too, can have a plaque!

I urge you to improve your business based on sound models that have a track record of results. Use a tool that measures and works, and one that can allow your firm to differentiate itself through improved and sustained performance. If using a Standard gets you there faster than you could do it yourself, and in all likelihood it will, don’t be too proud to use one. You just might be very pleasantly surprised with the results!

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DNC: FTC Amends Telemarketing Sales Rule

The Federal Trade Commission, the Federal Communications Commission, and the states are enforcing the National Do Not Call Registry. Placing number on the registry will stop most, but not all telemarketing calls.

FTC Amends Telemarketing Sales Rule Regarding Access to National Do Not Call Registry

Revised Final Rule Requires Telemarketers to "Scrub" Their Call Lists Every 31 Days; Registered Phone Numbers Top 58 Million; Compliance Remains High.

The Consolidated Appropriations Act of 2004, the Federal Trade Commission in February announced a proposal to amend the "Do Not Call" provisions of the Telemarketing Sales Rule (TSR) to require that telemarketers subject to the Rule access the National Do Not Call Registry and purge numbers on the Registry from their call lists every month, instead of every quarter as the Rule originally required. The Commission today announced that the final amended Rule provisions will become effective on January 1, 2005 , with telemarketers required to "scrub" their lists against the Registry at least every 31 days.

In its February notice of proposed rulemaking, the FTC requested comments on the proposed amendment's use of the phrase "thirty (30) days" rather than "once a month," the phrase used in the statute. In the notice, the Commission suggested the "thirty (30) days" language as a way to make the requirement clearer, and to achieve Congress' intent more effectively, which was to shorten from quarterly to monthly the interval for telemarketers and sellers to purge registered telephone numbers from their calling lists - in effect reducing the time consumers have to wait, after registering, for unwanted telemarketing calls to stop.

The FTC received 186 comments in response to the notice of proposed rulemaking from individual consumers, consumer groups, businesses, and trade associations. The Commission considered these comments before determining the final rule. The Commission chose the interval "thirty-one (31)," as the maximum time allowable under the Appropriations Act to simplify the process of scrubbing lists on a monthly basis. The Commission set the effective date of the Rule as January 1, 2005, to enable the Commission to modify the Registry system to account for increased download traffic and logic changes, and enable businesses, to implement new systems and procedures to accommodate the more frequent scrubbing interval. To date, consumers have registered 58.4 million phone numbers on the Do Not Call Registry. According to the FTC, most telemarketers have been diligent in their efforts to scrub their lists and to meet the Registry's requirements. A recent Harris ® Poll showed high levels of compliance, with a large percentage of telemarketers who are required to download the list and delete newly included numbers doing so on a timely basis. The Commission voted one voice to approve publication of the Federal Register notice by 5-0.

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Six Sigma

 

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Compliance with US regulations and Security Strategy

Much has been written about government regulations such as HIPAA, GLBA and Sarbanes-Oxley and whether they affect your security strategy. This article makes an effort to set the record straight.

SOX is still here to stay, but this year you' will be smarter than the last one. You survived the last year, and then you know a lot more now. But Compliance and Security should flow from your CEO and Executive Board. Do they know enough? Maybe they need a crash tutorial in SOX. The effort is incomplete if there’s any slack on this issue between the CEO and CIO. They must essentially work on it as a seamless team. Its time to ask some important (and possibly complicated) questions:

What are the strategic, financial and regulatory risks facing the organization?

There are many different bodies that have come out with intricate conceptual approaches to managing compliance risk. A quick look at some and you find a clear overlap, maybe agreement. First there are legal and regulatory risks. Obligations placed upon the company, by the government. If you fault on managing compliance with these processes, you're calling for a lot of trouble. That's where SOX, HIPAA [Health Insurance Portability and Accountability Act] and a lot of others fall. Second, there is operational risk. A good example of that would be CRM risk. Third, you find is financial risks. Finally, you've got strategic risks and that's more tenuous.

You may want to bring in someone with a clear mandate to drive these efforts. If the understanding is not complete or is completely missing, then you need third party help to focus on defining the risks your company faces.

Is there a charted roadmap and clarity regarding roles and responsibilities for risk and compliance requirements?

Get a cause champion who owns risk management and compliance in an organization. Better still if it be the CEO or CIO. Problem with compliance is that there are many different people and domains involved within the organization who own various aspects of compliance. You go to one and you get an opinion, you go to the next and it completely violates what you heard from the last person. Someone needs to own the full process of compliance and be there to ‘interpret’ diverse understandings within the organization.

What are the measures of efficiency and effectiveness?

Without appropriate metrics and performance benchmarks, everyone would be headed in the same direction yet on a different route. This may pull down your effort like a house of cards. First, start by establishing what those metrics are. What are the appropriate and acceptable performance parameters accepted by the industry? As they say “You can put in all the great processes in the world, but if you don't know if they're working or not, what's the point!”

Who are the beneficiaries with interest in the performance of compliance and risk management?

Interestingly in the whole process many stakeholders are looking at it from different angles, with varied interests. There is the same data and the same processes, but you're looking through different looking glasses. The regulators are looking for certain things. Your shareholders are looking at the exact same information, but they're looking at it with different perceptions and expectations. They may or may not care about the information the regulators are looking you’re your board, executive management, operating management all need to define what they're looking for and how this slots into their particular area of responsibility and interest.

One needs to understand all the important touch points. Part of that process actually falls under Sarbanes-Oxley, but more of financial reporting compliance than other areas of compliance. The same diligence ought to be used for other areas of compliance. Those are critical components to just getting your arms around the current landscape.

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GUIDELINES FOR SETTING UP CALL CENTRES

Hot sites can be used by the International Call Centre connected to it, only at the time of the disaster, by requesting the IPLC provider to switch its IPLC towards hot sites and informing the same to the DoT.

 

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Documents required for submitting the application: -

The application can be submitted on the letter-head of the applicant company. Following documents are required along with the application: -

International Call Center

Domestic Call Center

The application is to be submitted to the

Assistant Director General (OSP),
PIP Cell,
Department of Telecommunications,
Room No.1014, 12th Floor,
Sanchar Bhavan, 20 Ashok Road,
New Delhi-110 001.
Phone: +91-11-23372075

General Acts applicable to a BPO company / unit with specific reference to a call center:

Fiscal Incentives:

Non Fiscal Incentives:

 

Monthly Progress Reports (MPRs):
All units are required to submit Monthly Progress Report (MPRs) by 7th of every month. It is a mandatory requirement. Units which become irregular in submitting MPRs can be denied services by STPI.

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“LATEST IN BPO REGULATIONS” Dated 02-11-05

“Following has been permitted under “Other Service Provider Category”:

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Focused and decided while investing: learn from successful VCs

By Deepak kapoor

Like any successful VC Investor, you must have clear key investment criteria. Couple it with a clear geographic focus, and chances are you won’t go wrong. I will share my personal list with you, and leave you free to chart out the course that best works for you:

Always make investments for the long term subject of course to changes in your larger investment strategy.
Try not to lead investments, follow and prefer the lead to be a new investor with a proven track record. Firm up your initial investment size with allocations for future investment, should the company require it. Never plan to invest without sizing up your kitty. Take board-of-director or supervisory board seats, if not then at least ask for observer rights at the board level, an active investor but never meddle with the operations. Stick as far as possible to strategy. Evaluate the methodology of the promoters and their work values and culture. Seek a comfortable working fit before you decide.
In today’s BPO scene it is advisable to invest in expansion-stage opportunities, defined as companies with core management teams in place, a product/ service that is customer-ready, validated by early customer involvement, and some revenue traction.
Define your areas of focus. A few interesting areas that make for good investment today are:

In the end, be careful … very careful of whom you invest with. Moreover move very swiftly. I have seen many examples of investors taking too much time to decide on an investee, and a smarter one coming along and picking the opportunity from right under your hands. Remember that an investee company shall approach you only when they need capital and delaying them won’t work to your purpose.

Good Luck!

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Beware of VC's and Strategic Investors on financial fishing expeditions:

By Deepak Kapoor

With the unprecedented success of the BPO industry and media attention given to it, a number of strategic buyers (and investors) have started expressing an interest in acquisition ad green ventures. For a startup, it can be quite flattering to have a large competitor or suitor express an interest in buying their company. However, as a promoter one should be a wee bit skeptical as many of these interactions end up as just another ‘fishing expedition’ for the strategic buyer or investor. I have seen too many companies get overly excited about these acquisition feelers and waste time educating the potential acquirer about the business, only for the acquirer to either do nothing, build it themselves, or buy a better healthier competitor. These may just be learning lessons for the investor only to ‘warm up’ for the real thing with bigger better companies. It is intelligent to start discussing from the assumption that many are just fishing expeditions (VC jargon) where a strategic buyer is just trying to get as much information as they can about a market and the competitive landscape. Smart investors are most certainly talking to all of your competitors. Before divulging information about your company, make sure to gauge the VC’s real interest in your company. Here are some questions you should be asking during your initial conversation:

Who is calling you, what is their role, and what have they acquired in the past? Whether it is a junior person screening you or if it is someone with real decision making power.

Why do they want to enter this market and what is the decision making process by which they will make an investment decision? If they are early in the process and do not seem initiated, be very concerned about wasting your time. Educating a potential buyer about your market and in the end getting nowhere with them will make you want to kick yourself in the backside later.

Who else have they been talking to? In many cases, an investor may already know who they want to buy and how much of them, but will still talk to other players to fully understand the market and the competitive landscape and to use you as their strategic and negotiating leverage.

What are they looking for in an acquisition? Revenue, Clients, Management, any one, or all or even more?

Who is responsible for making the acquisition work, and how do they intend to take your company forward? Knowing this will further help you understand the decision-making process of the acquirer, and who you may need to influence to get a deal done.

before your first meeting, here is your due diligence:

What other acquisitions have they done (if any) and what multiples did they pay? How recent were the deals? If the buyer hasn't done many acquisitions or if they paid low multiples do not start thinking about pie in the sky valuations for your company.

What is the company's capital position and how much cash is on their balance sheet? If your selling price is too high for the buyer based on the buyer's market cap or cash on hand, don't waste your time educating them about your product and the market. There are many people on the market just waiting to while away their time and wasting your time in the bargain. Better to keep distant from them.

Use your network to talk to some of the management or venture investors of companies that were recently acquired by the buyer to determine what their process was and to figure out if the opportunity is real or just a fishing expedition. Always have a good CA and Lawyer on your side, helps go through smoothly.

Once again, it is always nice to have a large company call you and express acquisition interest. Those being said go into the conversations with a skeptical eye and make sure you do not waste your time as these strategic discussions can quickly lead to a dead end if not managed appropriately. The tricky part of the dance is trying to establish early in the process a range that the acquirer will potentially pay for your company assuming everything you tell them is true. The sooner you can get to this answer the sooner you will know if you should continue talking or just walk away. If you manage this process appropriately you may find yourself in a great place as many of the best acquisitions happen when companies are bought and not sold. 

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Saying No to Capital … When to accept and when to Decline!

By Deepak Kapoor

Many companies might be happier turning down a VC (is not as if that they were happy not to need the money, but they were rather happy not to need the VC that came along with the money). When there is a balanced fit between the management team, the VC, and the situation, the outcome is generally good. Market opportunity is maximized and everyone feels good that they worked well together to optimize the outcome. However on the south side, if the fit isn't’ right, many things can (and do) go wrong, or the process and results do not meet the ingoing expectations. The worst outcome of a good investment is ‘unrealized expectations’!

Take a trial fit before the deal closes!

My pleasant experience, in outcomes, in getting financed myself as well as overseeing such deals for others has been in making sure the fit is right for both sides in any VC/management team relationship. During expansion-stage VC deals (that is investing in companies once they are beyond the initial start-up stage), learn as much as possible. Spend enough personal time with the senior team to build a working relationship and to make sure that you share similar views on how to build the great company you dreamt of.

No two VC's are alike neither are companies …

VC's are diverse, as are the firms that they work for; as are the companies they invest in and the people who work on both sides. The major differences are relatively straightforward to decipher prior to closing an investment that can help you determine if you have the right fit between the company and the investor.

The best due diligence that the senior management of a company can do is to have the VC give you a list of business references or you can do some homework or look them up online and cold call them. Ask to speak with other partners and members of the VC team. Ask them all the same questions. It is a great exercise and you will have made friends to call upon once your investment closes.

The Differences - What to look for…

Market spotlight - What is the market focus for the VC? The more closely the VC’s market focus matches your company, the better the fit.

Financing Stage spotlight - What situations are the VC's most familiar with? What extras do they bring to the table with them, besides their money? The skills and network necessary to help very early companies are different than the skills necessary to help companies at the expansion or later stages. Most VC's are growth stage investors, some investors are extremely good with turnaround situations or other special situations.

Culture and Reputation of the VC Firm or Investor - How does the firm intend to focus on adding value or more do they plan to be mere passive investors? Do people in the industry want to work with the particular Investor or do they shy away from them? Lots of questions to ask here!

Background, Intellect, Personality, and Passion of the individual - The partner involved with the deal, who will most likely be sitting on your board. He is the most important individual to evaluate fit with and get to know personally.

Engagement Approach - How does the VC intend to work with you company after the deal? Does he (she) show up daily, weekly, monthly, Quarterly? Are they formal or informal? Is there a team of experts behind the VC that helps on various functionally specific issues? How do they work with the companies? Do they engage when asked?

Philosophy/Values - This is the most important part to be careful about, and the most easily to leave your notice. Expectations out of a deal are important to identify up front. Is the VC conservative or aggressive when it comes to deploying capital? Do you agree on “right” level of profitability, “right” growth rate, “operating points” ? Is the VC looking for “control” or just a “seat on the board”? Does the VC want to replace senior staff, work with current staff, or see how the individuals and company evolve?

Exit Philosophy - What is the “exit” philosophy? Define this at the beginning, the investor will certainly want to know this one, and maybe include it in his contract too.

Available time - Most VC's are extremely busy people. They are trying to build their networks, build relationships with the large companies (to help their portfolio), work directly with their portfolio companies, and find new investment opportunities. Just how much time are they going to spend with you?

I believe that most good VC's and serious Investors will accept and encourage your due diligence effort. I encourage the effort for every company I talk to, as I believe this is important for success. I know some truly amazing Venture Capitalists and I believe the process that I outline above will help you determine the right way to go about them. Remember, if you do not interest them in the first 30 minutes of your meeting chances are that it isn't’ going through … VC's are a swift lot, they have the knack of sniffing out the good deals from the average ones. On the other hand learn to keep your spine straight and say a firm NO if you feel that it isn't a good fit. Bad money in a good company never got anyone anywhere.

Happy Hunting...

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Business Plan Presentation

Presentation Guidelines

Business Positioning

Slide one - Position the company and its thought process

Market Opportunity

Be prepared to answer the following questions from prospective investors

What specific problem or need is being addressed?
Why the problem important to address and what is are its commercial imperatives?
Who is/are the specific customer(s)?
How large is the market for our Product/ Services?
What growth is expected in this market? Are the market size estimates realistic, explain how?
Who are the buyers (decision-makers) in these prospects?


Targeted Market Segment

Identify the most important 2 - 3 segments of the market you are addressing. For each segment:

Prepare a strong case for each of the following

What, specifically, are the company's products?
What do the products do?
Why would the customer buy these products?
What makes the products unique or special?
How are they better than other products or alternative solutions? How much better are they than other solutions?
Can we demonstrate that they are cost effective?
What, if any, proprietary processes/ technologies are used to make them?
Are there patents? If so, what, specifically, do they protect?
Why will be proprietary processes of value to the company?
What special issues relate to manufacturing the product(s)?
Are special materials or processes required, and how will they be acquired?
What special equipment or facilities are required?
What investment is required to set up the business? What capacity?
What cost will yield acceptable gross margins?

Competitive Positioning

Address barriers to adoption or competition

You may need to answer the following:

How else can the customer solve the problem our products solve?
What are the alternatives?
How do we compare to each?
Why are we better?
In what ways are we worse?
Who are the vendors of these other solutions?
How do they compete with each other?
Where will we fit into the industry?
Why will we be able to compete effectively against them in the short, medium and long term?
Why are we confident no new entrant will come along with a better solution?
Why do we think we can dominate our market niche?

Marketing and Sales

Explain the expected sales cycle. How you propose to reach your targeted customers by the following

If you rely on indirect channels, explain:

Management Team

Focus on the management team, VCs are very keen to know about the team in particular:

Be prepared to answer the following:

What is your background and previous experience?
Where did the idea for the company come from?
How did you get involved with the company?
Who is presently involved in managing the company?
What are their credentials?
Why will they be able to build a successful company?
If not all management spots are filled, what is the plan for filling them?
What kind of people are we seeking and what roles do they fill in?
The CEO that builds the business - what kind of person would you bring in? When?
Who is on your board of directors?
How does the board function?

Business Strategy

Be prepared to answer the following:

When did the company begin operations?
What exactly does the company do?
What is your long-term vision for the company?
How has it been funded to date?
Where does it stand today?
What are the important strategies for building the business?
What kind of business will it be? (manufacturing, service, distribution,
software, combination?)
What is the business model? (i.e. what will produce the company's revenue?
What kind of gross margins will the company have?
What expense levels are required to run the business?
What level of operating profit can the business generate?
Do you have any corporate partnerships in place?
Do you plan to put any in place?
What are the significant risks your business faces?

Projected Financials

Be very careful on the ‘numbers’ that you project …

Be prepared to answer the following:

What kind of revenues can the business produce, on an annual basis, over the next five years?
What are the projected Gross and Net Profits figures for one, three, five years?
What investment is required to carry the company to the next major level of valuation?
When do you expect the next rounds to take place, if any?
What specific tasks need to be accomplished to do that?
How long will it take? (Try to identify a "next level" that can be achieved in less than 18 to 24 months.)
What investment will be required beyond that?
Explain key assumptions and premise behind your forecast.
Make sure the forecast relates in a logical way to the market forecasts.
How will the investor get his money back? Through an IPO, Acquisition, what is the exit route? And when?

Requested Funding / Use of Funds

Identify the major uses of funds for each round. Describe the "burn-rate" in detaile. 

Be prepared to answer the following:

How much cash have the founders put in?
How much cash have Directors and Advisory Board members invested?
What equity is available to recruit key executives?
How did you arrive at your valuation for this round? Explain the model followed.

Exit Strategy

If shooting for an IPO…

If you anticipate being acquired…

Be prepared to answer the following

Why is this an exciting new opportunity?
Describe any other factors that make this an exciting opportunity.
Why would it excite an investor?
What is the projected valuation of the company in the future (1, 3, 5 years)?

( If you aren't sure how to value the company in the future, use 2 or 3 x annual sales as reasonable estimates)

"Seeded Value"

The combination of Value-Added and Customer Need is called Seeded Value.

Be prepared to answer the following

How important is your product to the customer?
Is your product/ service replaceable with another without affecting the customers' business?
Can your product in some way become embedded in what your customers’ offerings?

Keep it simple and realistic, VCs are pros at measuring both, people as well as plans!