Outsourcing
Articles >> BPO Business Process
Outsourcing
Very simply BPO business process
outsourcing can be seen as a process in which a company delegates
some of its in-house operations/processes to a third party. Thus BPO is
a transaction through which one company acquires services from another
while maintaining ownership and ultimate responsibility for the
processes. The company then informs its provider what it wants and how
it wants the work performed. So the company can authorize the provider
to operate as well as redesign basic processes in order to ensure even
greater cost and efficiency benefits.
The main motive for
Business process outsourcing is to allow the company to invest
more time, money and human resources into core activities and building
strategies, which fuel company growth.
In today’s
business environment outsourcing is often not a decision that needs to
be justified. In fact some work that is handled internally but could be
outsourced can be seriously questioned as a bad business decision.
The global market today is highly competitive and continuously
changing. A company must thus focus on improving productivity and at the
same time cut down costs. Therefore, a variety of different processes
that take up precious time and resources are being outsourced. BPO
companies are often considered to provide more flexible, faster, cheaper
and effective services.
Business process outsourcing
helps free up a company’s capital and reduce costs. The operations
or processes being outsourced vary from manufacturing to customer
service to software development and much more. Most of the companies
that are looking to outsource are multinationals, or companies from
western countries and most of the BPO units are in countries such as
India, China, Malaysia and even Russia.
One way of looking
at it is that business process outsourcing is just a name for already
existing practices. Services such as, bureau services, contract
programming and project management have been outsourced for a long time.
In its present meaning, however, business process outsourcing
refers to a greater level of handing over ownership and/or managerial
control than has before been the case.
Companies turn to
resources outside their organizational structure, usually to save money
and/or make use of the skilled professionals. For instance, a company
might outsource its IT management because it is cheaper to contract a
third-party to do so than it would be to build its own in-house IT
management team. Or a company could outsource all of its data storage
needs because it is easier and cheaper than buying and maintaining its
own data storage devices. A business might also outsource its human
resource tasks to another enterprise instead of having its own dedicated
human resources staff.
