E-Paper
BTO is new back-office buzzword
BTO combines elements of BPO and IT outsourcing. HT Corporate Bureau sheds light on the new business tool.
After BPO and KPO, welcome to BTO. As outsourcing to India and similar low-cost locations gains ground, the common fact is that it involves employing skilled white collar workers using high telecommunications bandwidth, but deeper the skills and complexity of work, higher the wages and fancier the jargon to describe the work.
A new study by industry researcher International Data Corp (IDC) and the Associated Chamber of Commerce and Industry (Assocham) says that business process outsourcing (BPO) and knowledge process outsourcing (KPO) are set to be joined by business transformation outsourcing (BTO).
While BPO involves low-end work like accounting or call centres, KPO involves research and analytics for consulting. BTO, the study says, involves the outsourced service company sharing the client's risk that thinks not as a supplier but as some kind of a strategic partner, who innovates on processes.
"BTO changes how the business operates. It acts on the processes to create new capabilities," said the study, which says BTO would grow by at least 5 percent and is expected to reach 9 to 10 percent per annum, with the market potential estimated to be around $680 billion by 2008. The percentage of BTO services in the outsourcing spectrum is expected to rise to 31 percent from 2009 from 19 percent in 2004, says the study.
BTO combines elements of BPO and information technology outsourcing, says the study, which was helped by leading industry companies such as Genpact and TransWorks.
BTO work is being offered currently out of India by companies such as IBM, Accenture, Wipro BPO and Nipuna, a subsidiary of Satyam Computer Services.
The study cautioned that India has an edge in this business, but inadequate infrastructure and extraneous political events such as communal riots or terror attacks and growing corruption could erode its advantage in competing with countries like the Philippines, China, Canada and Mexico.
Anil K Agarwal, president ASSOCHAM said, “Countries like Philippines, China, Canada and Mexico pose a serious threat to India for BTO. Therefore, India needs to be adequately geared up to take on these countries if it wishes to take advantage of BTO.”
The report is likely to be submitted soon to Minister for Communications and Information Technology Dayanidhi Maran.
