Business process outsourcing (BPO)
Jul 20, 2021
Business process outsourcing (BPO)
Q Why is it in News ?
Recently, the Department of Telecommunications (DoT) has eased the norms for Other Service Providers (OSPs).
- The OSP guidelines were earlier liberalised in November 2020 in order to encourage the BPO (Business Process Outsourcing) industry in India. The new guidelines have been simplified even further, offering greater ease of business and regulatory clarity.
Q What is Business process outsourcing (BPO) ?
- Business process outsourcing (BPO):
- BPO is a business practice in which an organization contracts with an external service provider to perform an essential business task.
- BPO offers several benefits, such as lower costs, global expansion, and higher efficiency, while some of the drawbacks include security issues, hidden costs, and overdependence.
- OSPs or Other Service Providers are companies or firms which provide secondary or tertiary services such as telemarketing, telebanking or telemedicine for various companies, banks or hospital chains, respectively.
- The Indian Information Technology (IT) - BPO industry was worth $37.6 billion in 2019-2020, and has the potential to rise to $55.5 billion over the next four to five years.
Q What are the important features of New Policy ?
- Distinction between Domestic and International OSPs has been removed. A BPO centre with common Telecom resources will now be able to serve customers located worldwide including in India.
- Now, the interconnectivity between all types of OSP centres is permitted.
- The Electronic Private Automatic Branch Exchange (EPABX) of OSPs can now be located anywhere in the world.
- Removed the requirement of OSPs submitting their reports to the DoT on a period basis.
- Such service providers will have to self-regulate and maintain a call data record, a usage data record and a system log for all customer calls for a certain time period.
- They will also have to abide by the data security norms prescribed by the Centre.
- Other Provisions:
- Exempted OSPs from requirement of any registration.
- No Bank Guarantees were to be furnished.
- Work from Home and Work from Anywhere was also permitted.
- Penalties for violations were removed altogether reaffirming the trust the Government has in business.
Q What can be expected benefits ?
- Expected Benefits:
- The guidelines will make it easier for BPOs and ITes firms in cutting down on the cost of location, rent for premises and other ancillary costs such as electricity and internet bills.
- The companies will no longer have to carry the additional compliance burden of providing the details of OSP employees to the DoT, as they are recognised as extended or remote agents.
- The doing away of registration norms will also mean that there will be no renewal of such licenses. This will invite foreign companies to set up or expand their other service providing units in India.
- It will allow employees to opt for freelancing for more than one company while working from home, thereby attracting more workers in the sector.
Q What are other steps taken to promote BPO Industry ?
- Steps Taken to Promote BPO Industry:
- Atma Nirbhar Bharat
- Electronics Manufacturing Productivity Linked Incentive scheme
- Scheme of Electronic Manufacturing Cluster
- PLI scheme for Telecom Equipment
- Ease of Doing Business in IT & Telecom
- Spectrum Sharing & Trading
- Delicensing of certain frequency bands