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BPOs see better revenues through new pricing models
By siliconindia
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Friday, 12 September 2008, 23:30 IST
Bangalore: A shift in pricing model is helping Indian BPO firms draw more revenues. Making a departure from the traditional voice-based offerings, many firms have embraced outcome-based and transaction-based models that offer more of non-voice and platform-based services. These firms' earlier businesses were mostly based on the input-based pricing or FTE (full time equivalent) model, wherein services are charged per person on hourly basis, reported Business Line.
In a transaction-based pricing model, the client pays the vendor for the number of transactions performed, while in the outcome-based model, pricing is linked to the outcome or output delivered to the clients.
Along with fetching more revenue, such a shift is also helping these BPO vendors improve their profitability, besides driving their non-linear growth.
"BPOs are moving away quickly from FTE-based revenue model to offering platform-based services," said Avinash Vashistha, CEO of Tholons, an outsourcing advisory firm. Vendors such as Tata Consultancy Services, Infosys Technologies and Wipro are investing in building and owning platforms, which helps them to offer services on newer pricing models.
"There has been an increase in transaction based revenues in the recent past," said Ashutosh Vaidya, head of WiproBPO.
While WiproBPO earns about 40 percent of its revenues from the transaction based pricing model, the BPO operations of Infosys Technologies earns about a seventh of its revenues from the same model.
"Revenues from transaction-based pricing model will certainly increase over a period of time because of our focus on platform-based approach," says Amitabh Chaudhry, Chief Executive Officer and Managing director, InfosysBPO.
Mathew Vallance, Global Head of Business Development at the Mumbai headquartered Firstsource Solutions, said such new pricing models, besides improving the profit margins, helps vendors to differentiate in the market place through better efficiency and productivity gains.
