# **I.  CROSS-BORDER TRADE IN BUSINESS SERVICES:  DRAMATIC GROWTH, GLOBAL GAINS AND POSSIBLE PROTECTIONISM**

We are dealing with a phenomenon that is hard to define and to quantify. First of all, there is no easy correspondence between the services that are being traded and existing service sector statistical classifications. Furthermore, this trade, by its very nature, is hard to measure – no customs officials record the passage of products and keeping track of the associated international financial transactions is difficult. Nevertheless, this section attempts to construct a rough picture based on available data.

Table 1: Information Technology and Business Process Outsourcing Services

## **1. INFORMATION TECHNOLOGY SERVICES (COMPUTER AND RELATED SERVICES)**

Software Development and Implementation Services, Data processing and Database Services, IT Support Services, Application Development & Maintenance, Business Intelligence & Data Warehousing, Content Management, E- procurement and B2B Marketplaces, Enterprise Security, Package Implementation, System Integration, SCM, Enterprise Application Integration, Total Infrastructure Outsourcing, Web Services (Internet Content Preparation, etc.), Web-hosting and Application Service Providers (ASPs)

|**2. BUSINESSPROCESSOUTS**<br>|**OURCING**<br>|
|---|---|
|CUSTOMERINTERACTION<br>SERVICES|Sales Support, Membership Management, Claims, Reservations for Airlines and Hotels,<br>Subscription Renewal, Customer Services Helpline, Handling Credit and Billing<br>Problems, etc.<br>Telemarketing and Marketing Research Services|
|BACK-OFFICEOPERATIONS|Data entry and handling, Data processing and database Services, Medical Transcription,<br>Payment Services, Financial Processing (financial information and data processing /<br>handling), Human Resource Processing Services, Payroll Services, Warehousing,<br>Logistics, Inventory, Supply Chain Services, Ticketing, Insurance Claims Adjudication,<br>Mortgage Processing|
|MOREINDEPENDENT<br>PROFESSIONAL OR<br>BUSINESSSERVICES|Human Resource Services (Hiring, Benefit Planning and Payroll, etc.), Finance &<br>Accounting Services (including Auditing, Bookkeeping, Taxation Services, etc.),<br>Marketing Services, Product Design and Development|

Sources: _Own compilation based on information obtained from service providers (Internet pages), NASSCOM, and ITC (2000). The list of activities is neither exhaustive nor are the categories mutually exclusive._ The most dynamic area of services trade, and the bulk of the increased trade involving developing countries, is in information technology (IT) and business process outsourcing (BPO)<sup>2</sup> services. Table 1 provides a list of the most common outsourced or off-shored IT and BPO service activities. BPO services can be subdivided further into: “customer interaction services” (typically performed by call centers) and “back-office operations”.

Table 1 reveals that the boundaries between IT services, customer care and other individual components are hard to draw. Even standard customer care functions often combine several activities, like the maintenance of a call centre, the use and update of customer databases, technical support, etc. To lump all these services into one category like “backoffice operations” does not do justice to the great variety of services being traded cross-border. Furthermore, as will be seen later, many of these services do not neatly fit into any existing

> 2  BPO (Business Process Outsourcing) can be defined as a contractual service to completely manage, deliver, and operate one or more (typically IT-intensive) business processes or functions.

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