Skills upgradation

New Delhi, May 30: Business process outsourcing (BPO) companies are planning to implement certain industry standards to retain US customers. A decision by Dell and a few other multinational companies to move out their back-office work from the country has triggered such a move.

A few major BPO operators, including Infosys Progenies, are in the process of implementing the standards. Smaller BPO firms are closely examining the standards being implemented and the demands made by the US companies. Industry sources said Wipro Spectramind and other major operators are also examining these standards.

With the Sarbanes-Oxley directive on services organisations coming into effect from the next financial year in the US, the BPO companies with major US clientele could face a huge constraint in finances and time.

The Sarbanes-Oxley directive stipulates that any US-based company listed on the stock exchange will have to get the audit done for the work outsourced to other countries.

“This would mean that if a BPO company in India had 10 US-based customers, each would have to be audited separately. Each audit takes about three to six months and the cost is phenomenal. With the Statement of Auditing Standards (SAS) 70, an internationally recognised standard, a BPO operator can just produce the report that would be valid for all the 10 customers,” said PricewaterhouseCoopers director Joydeep Datta Gupta.

SAS 70 allows third-party BPO service providers to obtain independent assurance on their control objectives and control processes.

“SAS 70 is a key requirement for Indian BPOs, offshore development centres, application service providers and call centres as they tap global markets to offer their services. It is the need of the hour,” he added.

The National Association of Software and Services Companies had said more than 30 companies had shut shop last year, of which a majority had business with US-based companies. PricewaterhouseCoopers highlighted the need to incorporate and implement SAS 70.

Thomas F. Barrett, partner, PricewaterhouseCoopers, said, “BPO is undoubtedly a feather in India’s cap. However, as the industry makes rapid strides, it faces many challenges. BPO in India will gain significantly from engaging SAS 70. A service auditor’s report with an unqualified opinion will satisfy the user auditor’s requirement, with minimal business interruption for the service provider.”

This report provides the necessary information to auditors of entities that use a service organisation for transaction processing.

Auditors use SAS 70 reports to gain an understanding of internal controls at service organisations supporting key financial transactions, a requirement of generally accepted auditing standards (GAAS).