Railway Accounts Department Examinations

Thursday, October 24, 2024

BPO - Business Process Outsourcing & Privatisation in Indian Railways

 


Business Process Outsourcing


A MCQ has been asked in AFA LDCE 2024 Exam - BPO stands for _________ 


What is BPO ?


  • Business Process Outsourcing (BPO) is the practice of contracting specific business tasks or processes to a third-party service provider.


  • These tasks typically include non-core activities such as customer service, IT support, data entry, accounting, and payroll management.


  • BPO helps organisations reduce costs, improve efficiency, and focus on core business activities by outsourcing repetitive or specialised tasks to external experts.


  • BPO can be domestic (within the same country) or offshore (to another country).

 

Types:  


  1. Back-Office Outsourcing: Administrative tasks such as Accounting, HR, Customer support, and IT services. 

  2. Front-Office Outsourcing: Customer-facing functions like Sales, Marketing, and Technical support. 

  3. KPO - Knowledge Process Outsourcing: High-value knowledge intensive tasks such as Research, analytics, and engineering. 


Advantages: 


  1. Cost reduction: Operational costs will be reduced by leveraging lower labour costs in other countries.

  2. Scalability: BPO providers can quickly scale up or down their services to meet fluctuating business needs according to the demand.

  3. Expertise: Allows firms to access specialised expertise and resources that they may not have in-house. 

  4. Focus: Focus on Core competencies by outsourcing non-core functions such as accounting, Sales, Marketing, HR etc.


Challenges: 


  1. Communication barriers: Cultural differences and language barriers can sometimes hinder effective communication between the client and the BPO provider. 

  2. Data Security concerns: Concerns of sensitive data at BPOs. 

  3. Vendor Management: Managing multiple BPOs for various operations can be complex and time-consuming. 


Conclusion: BPO has been best suitable for industries like IT, Finance, Healthcare, and Telecommunications. By effectively outsourcing non-core functions, firms can improve their efficiency, reduce costs, and focus on their core business activities. 

List of prominent BPOs in India, serving a variety of sectors globally: 

  1. TCS: Tata Consultancy Services (TCS)

  2. Infosys BPM (Business Process Management)

  3. Wipro BPS (Business Process Services)

  4. Genpact (a GE Business unit)

  5. HCL Technologies BPO Services

  6. Tech Mahindra Business Services

  7. Cognizant Technology Solutions

Indian Railways and BPO:

  • Indian Railways has been exploring various avenues to outsource its non-core activities to the BPOs. Some of the Non-core activities are: 

  1. Ticketing and reservations

  2. Call centres and customer support

  3. Back-office operations (e.g., HR, payroll processing)

  4. IT and administrative task

Is it Privatization or Outsourcing in Indian Railways ?


The Railways has around 13 lakh permanent employees and over 4.5 lakh contractual and outsourced staff. It shows a ratio of 3:1.  May be in coming days, this ratio may be jump to 2:1


Activities (termed as Non Core) that are already outsourced on a phased manner in Indian Railways are :


  1. AC Coach attendants

  2. Platform cleaning

  3. Security

  4. Executing the works in Indian Railways

  5. P.Way maintenance

  6. Catering & Pantry car

  7. Hospitality

  8. Doctors in Railway Hospital

  9. Supply of Bed linen in AC Coaches

  10. OBHS – On Board Housekeeping Services

  11. Parcel vans

  12. Sanitation in Railway colonies

  13. Managing Retiring Rooms Dormitories

  14. Housekeeping of Railway Stations

  15. Railtel for telecom operations

  16. RVNL for construction activities

  17. Disburse salaries through NEFT (thereby reducing the Cash office staff)

  18. Doorstep Banking

  19. Engineering Surveys

  20. Painting or removal of paint of Rolling Stock in Production Units / Workshops

  21. Maintenance of IVRS – Interactive Voice Response System

  22. Transportation of released track material

  23. Leasing of SLR space

  24. Unscheduled and scheduled repairs of house wiring and operations of  Pumps/DG sets / Stationery AC Plants/ Distribution network of power supply

  25. Unscheduled repair of major electrical assembly of locomotives / multiple units / Alternator / fans / Compressor in AC Coaches

  26. Waiting halls in Platforms


Proposed / Contemplated activities are


  1. PMC – Project Management Consultancy – Supervising the Works

  2. Corporatisation of Railway Production Units and Workshops

  3. Corporatisation of all construction activities

  4. Railway Station operations (as a whole)

  5. EPC – Engineering , Procurement and Construction (from estimate stage to completion stage)

  6. Certain activities of Salary preparation, maintenance of Provident Fund / NPS etc

·         Private Trains


The above list is endless. I advise Railway employees to face any eventuality of the rapid changes in the Indian Railways in coming days.


Note:


The author neither supports nor opposes the privatisation of non-core activities in Indian Railways.


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