Tuesday, March 27, 2012

A brief history of Business Process Outsourcing in India

Business Process Outsourcing is a structured arrangement between an organization and an outsourcing partner to perform services, otherwise conducted in-house. The provider of the outsourced services takes primary responsibility of ensuring the process works and delivers the required results as expected by the organization. Thus Business Process Outsourcing represents a new paradigm for international trade in services.

In 1968, an Indian government working group on computers said, “Software development would seem to have a very high employment potential in a country like India … the value added in the case of software, is very large.” Ironically the same report framed a policy of “self-sufficiency” that arrested the development of the IT industry. Restrictive rules and regulations imposed severe restrictions on imports of hardware and software. Even IBM quit the country in 1978 due to laws that disallowed foreigners from owing more than 40% equity stake in an Indian firm. 

Sanity returned to the system only in 1986 with new policies which liberalized access to software and associated hardware. The software technology parks of the 1990’s led the way to opening newer technology domains such as Business Process Outsourcing agencies. India’s tryst with process outsourcing began in the mid 1990s with GE setting up a Business Process Outsourcing facility in Gurgaon. Some of the other early birds were companies such as American Express and British Airways.

Initially low-end work such as data entry and call centre activity was outsourced to India. With increasing confidence of the companies, value added work such as processing of accounts and other non-core functions came to India. The success of these early pioneers encouraged a host of others to set up their own back office operations in India. Banks such as Citibank, HSBC and Standard Chartered and other companies such as Dell and Hewlett Packard set up their own captive operations. Indian software majors such as Infosys, Wipro and Satyam were a bit late to join the BPO party. The scene has since shifted to transaction processing.

Wednesday, March 7, 2012

Organizations as organisms

In Images of Organization Gareth Morgan utilizes the eight metaphors namely organizations viewed as: machines, organisms, brains, cultures, political systems, psychic prisons, transformation systems, and instruments of domination, in concert with each other to explain organizations.Organizations as organisms is my effort at looking at images of organization and associating it with real life examples. Mind you this was a MBA paper written by a 25 year old for whom Organizations as organisms were places of possible recruitment and much has changed since than but the gist remains the same.

Organism metaphor

The organism metaphor mainly deals with the organization's survival and its ability to grow and change in response to its environment. Various parallels can be drawn between an organization and an organism.


An organizations culture is the set of values, norms guiding beliefs and understandings that are shared by organization’s members and taught to new members as correct. Living organisms also tend to share common beliefs and guidelines. Take for example a herd of deer which share the common understanding that a lion is dangerous and they must flee as soon as they sense one near them. If one comes to the top of the food pyramid to humans, then culture and social norms become even more apparent. An individual human being is taught or learns values and culture from his/her environment, just as an organization does in response to its internal and external environment. Thus with respect to culture the organism metaphor talks about the adaptability culture of an organization.

Life Cycle

Organisms tend to have a definite life cycle from birth to aging and death. Similarly organizations also have a comparable life cycle depending on the industry in which they are present. An organization may continue to exist even after the people within it have moved away – attrition, turnover, retirement, etc

Consider the example of a CRT monitor manufacturer. The industry as a whole is highly mature and as LCD displays get cheaper the CRT monitor will surely become obsolete. When this happens, the CRT monitor industry will die and so will the monitor manufacturing organization.

Every living organism on this planet is governed by Sir Charles Darwin’s theory of survival of the fittest. Organizations also tend to struggle for their survival against changes in both their internal and external environment.

‘Survival of the fittest’ through trait selection is how Darwin explained how organisms respond to environmental changes over generations. Organizations compete with their peers. Unlike organisms, organizations do not have the advantage of time and must respond quickly to changes in their environment which means a stress on decentralization. Since authority to make decisions gets spread, managers can respond quicker to the changes.

For example Zenith has to compete with the likes of Dell, HCL, Acer and HP-Compaq in the desktop PC market. Since it uses low costs rather then high quality to compete with its competitors, Zenith must respond quickly to any new launches of desktops by the competition to ensure that its products sell in the market.

Large multi-cell organisms have distinct parts doing specialized jobs. Similarly an organization also has a definite structure both in terms of physical artifacts as well as the social setup. An organization has distinct departments or functions such as an accountants section would handle finance related issues while R&D department would look into product development. 

Just as an organism requires food and drink to survive so does an organization which needs continuous inputs of raw materials and manpower to survive. 

  • “The Technostructure Viewed with Morgan's Metaphors”,
< http://www.ebbemunk.dk/technostructure >
  • Max McKeown, “What is your organization like?”, Jun2006,
< http://www.management-issues.com/default.asp>

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