The sub-prime crisis in the United States had been simmering for quite some time. However, its effects are now evident with the collapse of some of the leading financial institutions.

With a global recession looming, the BPO industry will not remain unaffected. Already the crisis in the financial markets is acting as a dampener for deals in the BPO sector. The number of BPO deals has dropped from 109 in the first quarter of 2007 to 78 in the first quarter of the current year. The second quarter of this year saw about 58 deals compared to 101 in the same period last year.

Source: ValueNotes Outsourcing DealTracker

With over 60% of the BPO revenues from the Banking and Financial sector, the industry fears a slowdown and likely non-renewal of existing contracts. Amid all this turmoil and pessimism, companies need to take a positive stance and tighten processes and reduce inefficiencies.

To remain profitable, companies will have to rein in costs, make their business processes more efficient and re-look their strategy. Quality standards like ISO 9001: 2000 have been adopted by many in the BPO industry. While the standards certify that the companies have processes in place that meet certain quality standards, it does not dictate how these quality standards should be maintained. Ensuring regular compliance will help sustain value.

Further, several BPOs claim to follow six sigma methodology. This primarily helps reduce the cause of defects (events that cause customer dissatisfaction). In such turbulent times, it is easy for middle management to de-prioritize process compliance. However, they should ensure that these processes are followed religiously. Additional cost savings along with value addition can be provided through continuous process improvement, process re-engineering and change management. The compliance and control procedures in place should be followed to the letter.

Aggressive hiring over the last three to four years, has added to the baggage of un-productive manpower to a certain extent. Given the current scenario, it is a good opportunity to trim the flab of inefficient workforce. This is not to suggest that companies should adopt hiring and firing as a solution to cut costs. These volatile economic conditions do call for discretion on the part of BPOs. However, arguably this is an opportunity for BPOs to get fit and lean.