What is Business Process Outsourcing(BPO)?
BPO is a process of transferring some of an organization's such as IT outsourcing, bpo companies, offshore software outsourcing, repeated non-core and core business processes to an outside provider to achieve cost reductions while improving in service quality. Because of the processes are repeated and a long-term contract is used, outsourcing goes far beyond the use of consultants. If done well, bpo companies results in increasing shareholder value. The main difference between bpo and more traditional IT outsourcing companies is that bpo companies offers companies a way of achieving transformational outcomes much more quickly. In a typical bpo contract, a service provider takes over a specific corporate function. Effective bpo outsourcing encompasses much more than just changing who is responsible for performing the process. In bpo services, the outside provider not only takes on the responsibility to manage the function or business process outsourcing, but also re-engineers the way the process has been traditionally done.
The next IT outsourcing generation of Business Process Outsourcing process has emerged as a priority for businesses looking to better options in managing their offshore application portfolios. The first wave offered low-cost, offshore software outsourcing, but today firms are demanding new, less risky options for outsourcing applications that are strategic, complex, or mission-critical, while still taking cost into consideration. IT Outsourcing has moved from a niche technology management tool to a mainstream strategic weapon. Business Process Outsourcing leverages process driven efficiencies in terms of organizational excellence, responsiveness & branding, financial efficiency and customer relationship. Offshoring bpo services is emerging as a powerful and flexible approach that business leaders can use to achieve a wide range of tactical and strategic aims.
The most common business process offshoring that gets outsourced is call centers. Call centers and Help Desks of many multi national and fortune 500 companies are being provided bpo services to outsourced for low waged, The English speaking countries such as Philippines and India. Countries like India with vast IT human resources are also attracting IT outsourcing solutions from American IT/Technology companies to outsourcing news their IT Help Desks. Many of these help desks are state of the art with latest Help Desk software and help desk hardware with technical savvy IT graduates behind them answering your questions.
The types of outsourcing became a catchphrase in local business areas in the 1990s. It was a well appreciated addition to the offshoring business lexis. This market comprises 9 business functions of human resources, procurement, finance and accounting, customer care, logistics, engineering/R&D, sales and marketing, facilities operations or management and training. Outsourcing is a corporate strategy that companies adopt to enhance competitiveness of the company. By outsourcing non-core part of business operation and only concentrating on the core competence, companies can increase the productivity and efficiency in management.
Outsourcing news as strategy is not new for offshoring companies. Some examples of offshore outsourcing, such as GM and EDS, Xerox and EDS, Kodak and IBM, are more than a decade old. Over the years, the scale and scope of outsourcing services and offshoring has evolved considerably. It has also migrated from primarily Fortune 500 companies to large and midsized companies.
Most of offshoring companies are now adjusted to manufacturing being done offshore software outsourcing. What took place in manufacturing process of companies are now occurring in back-room processing and services. Ten years ago, if anyone had boldly predicted that by 2003 we would begin to see back-room service centers and call centers housed in India or the Philippines, they would have been laughed at. How could high-touch customer service agents who interact directly with customers work halfway around the world? The cost would be prohibitive given that monitoring the agents would be impossible and every call would be international.
Manufacturing and service for offshore news outsourcing services have changed over these years. It is a macroeconomic trend to which every company needs to react. If your competitor offshoring company can make a product and provide associated outsourcing services for less than you, then you need to follow IT outsourcing solution, or risk being put out of your business outsourcing services.
Although initially the low-skilled outsourcing jobs such as manufacturing, call center, and computer coding were shifted towards abroad, as more companies expand their offshore news into outsourcing, new functions like human resources and knowledge skills like technology are being outsourced by good offshoring companies. As the worldwide migration continues and the movement overseas matures, more high-skilled jobs such as accounting and engineering will likely to be sent abroad. As such functions are outsourced by IT outsourcing solution, more standards in processes are created. Just like in ERP where business processes outsourcing news such as finance and manufacturing were standardized, a similar thing will happen in HR, logistics, and accounting processes.