Business Processing Outsourcing-An overview

This article will be a brief overview of the BPO practice.

A glimpse of the industry

• The business process outsourcing industry has been inflating since its inception.
•  It faces certain threats from automation and obviously, the technological advancements that make it easier for companies to manage even those services that they would naturally outsource if there were no alternatives.
• India is the leading hub for outsourcing services to. Many corporates in India excel at delivering English-speaking and cost-effective labor for many purposes, call centers being the prime one.
• The revenue of the industry is calculated to be more than $100 billion.
• The industry started with manufacturing corporates outsourcing parts of their supply chains to global partners.

The two types
There are two types of BPO – back-office and front-office.

• Back-office BPO means outsourcing internal functions such as finance and accounting.
• Front-office BPO means outsourcing client handling and customer care services to external service providers.

In another kind of comparison, there are offshore, onshore, and nearshore BPO – offshore when work is outsourced to different countries, sometimes miles apart or even on the other side of the planet. Onshore means the same country. Nearshore means outsourcing to neighboring countries.

Reasons
There are many reasons for companies adopting BPO outsourcing, sometimes critical, business functions to offshore service providers.

• More competition in market encourages the fact that outsourcing can help greatly in getting some part of work done while being able to focus on more pressing issues internally.
• Data is automatically processed for you and delivered to you at the timeframes you specify.
• Many overseas markets offer pretty cheap labor for services including accounting and technical customer support.
• BPO makes processes faster thanks to the state-of-the-art technology employed by the service providers.
• As time has passed, the service providers from other countries have become more skilled, educated, better conversing, and understanding of the basic aims of a company.

Benefits
Out of the many benefits affirming the potential of the BPO industry, let’s go over a few:

• Often labor is cheap, and outsourcing customer-end services to third-parties helps a company focus on other issues. Cost-efficiency and flexibility are two prime reasons for business process outsourcing.
• Functions that require high level of skill, evaluation, learning, or research can also be outsourced, making it easier for smaller companies to leverage professional insights and research instead of doing scaled-down evaluation themselves.
• Complete outsourcing solutions are rising in the modern business world. They help collaborate on the whole spectrum of services provided by a business.
• The IT skills of people employed in the BPO industry are unparalleled. It’s often a good idea to outsource certain functions to those who are doing the work for a long time, in case your other alternative is training employees yourself.

Limitations and risks
Nothing is all good.

• Sometimes the service provided is low-quality or below expectations. In fact, the complaints about the quality of outsourced work are pretty frequent in first-world countries.
• At many occasions, there are communication problems.
• Most of the service providers engage in malpractices including changing charges, revising payment models, and faking workforce strength.
• Many service providers are synonymous with most other providers. Nothing unique. A company is forced to make decisions based on the count of the workforce, which can be an illusion.
• It’s seen that sometimes the running costs of BPO are underestimated. If not, then many businesses become too dependent on the providers if costs are easy to pay. Both situations are bad.
• There’s always a risk factor involved. You’re outsourcing your financial details to third-parties and there’s a risk of privacy and financial integrity involved in that, obviously.

For more information, read The Pros & Cons of Business Process Outsourcing.

Written by Lucy Anderson. Lucy works as a BPO, business process outsourcing, expert for renowned firms. She has established herself as a powerful entity in the field. Her work includes tackling problems like whether to outsource or not for a startup to which services to outsource and how to maintain their privacy for big firms. To know more about his work, visit:
www.hashatit.com 
www.experiment.com