Jan. 16, 2007

British insurance company Aviva is planning to move about 2,900 BPO (business process outsourcing) seats from 3rd party providers EXL and WNS to AGS (Aviva Global Services).

Already, Aviva has transferred 1,600 employees from a third partner, 24/7 Customer to AGS.

By implementing these steps, Aviva is greatly reducing its reliance on BPO partners in the B2B sector in favor of building its own captive BPO center.

The scale of the move away from partner reliance is new in the Indian BPO market, which routinely sees Western companies partner with Indian BPO providers. Aviva is in fact bucking the trend in outsourcing services.

Aviva's move is not strategically risky, as the employees it is transferring are already conversant with Aviva operations, and as AGS has been functioning for some time.

However, by focusing the bulk of its resources in a captive center, Aviva will retain greater control of its own operations going forward.

The new Aviva strategy raises plenty of BPO questions. Without questioning their commitment to Indian labor, will Western companies begin to reprioritize their captive centers as a way to mitigate the risks of working with Indian partners?

In the very short term, it will mean more of an operational headache to pick up the work previously handled by partners and hand it off to the captive center. However, in the long term Aviva plans to have greater control over the costs and efficiencies of doing BPO business in the B2B segment.

Source: Line 56