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Part - II

Core Competency Front

Core competency is nothing but "Doing what you are best at". So companies have adopted core competency concept to innovate and improve at the same time outsourcing the other functions. Most companies try to distinguish between core and non-core processes to decide what's appropriate to outsource. Organizations that had diversified businesses dropped out the less profitable ones and concentrated on the more profitable businesses and the ones they were good at.

Cost Factor

On the cost front, it follows the wheel concept. Upfront, the third world countries seems to be a lucrative option for outsourcing and it is, at present. But in the future -The manpower cost, which is the major factor, tends to increase and it will reach a point where there is no marginal profit. At that point outsourcing would not seem a viable option.

Road map for Indian BPO firms

To generate substantial revenue to satisfy the stakeholders, organizations have to increase the sales of present businesses, extend the core competency capability and decrease cost.

Sales is one factor which depends on various externalities including competition. It is also dependent on Core competency capability and cost efficiency of the BPO firms.

On the Core competency front, organizations must find means by which it can extend its core competency capability. Then again, it is not just enough for an organization to have several areas of core competencies but several areas of distinctive competencies. Moreover, organizations must find ways of increasing the value component in their offerings.

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* Contributed by: -
P. Bilesh,
Class of 2005,
BIM, Trichy.