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Advantages of BPO: Some of The Advantages of The BPO Outsourcing Are Listed As Below
Advantages of BPO: Some of The Advantages of The BPO Outsourcing Are Listed As Below
The act of transferring some of an organization's repeated non-core and core business processes to an outside provider to achieve cost reductions while improving service quality is referred as Business Process Outsourcing (BPO). In BPO outsourcing, the outside provider not only takes on the responsibility to manage the function or business process, but also re-engineers the way the process has been traditionally done. Call centers, human resources, accounting, medical billing, web design, writing, translation and payroll outsourcing are the most common examples of BPO outsourcing services. The Business Process Outsourcing (BPO) provides innovative, effective, and high-quality services to customers all over the world. The Business process outsourcing, BPO outsourcing is becoming extremely demandable and promising in new generation. BPO outsourcing is emerging as a powerful and flexible approach that business kings can use to achieve a highest range of tactical and strategic aims. Effective BPO outsourcing encompasses much more than just changing who is responsible for performing the process. Advantages of BPO
An important aspect of business process outsourcing-BPO is its ability to free corporate executives from some of their daily process management responsibilities. By outsourcing their business operations to third party, companies have the following advantages: Some of the advantages of the BPO outsourcing are listed as below:
Cost reductions Obtain outside expertise Meet constantly changing customer demands By outsourcing non-core business processes, companies can target on increasing their sales and business, develop new products, expand into global markets, enhance customer services & satisfactions and grow up the business in the global market. ITMatchOnline concerns with BPO outsourcing, IT outsourcing and KPO outsourcing services. Some of the BPO outsourcing services are listed as below:
Multimedia & Animation Book keeping & Financial Services Business Consulting CAD/CAM Call Center Data Entry DTP, Typesetting Handwriting Services HR Services Internet Marketing Legal Services Medical Billing
Proofreading, Editing Software & Technology Transcription Web Design & Development Writing & Translation
Business process outsourcing (BPO) is a subset of outsourcing that involves thecontracting of the operations and responsibilities of specific business functions (orprocesses) to a third-party service provider. Originally, this was associated withmanufacturing firms, such as Coca Cola that outsourced large segments of its supply chain.[1] BPO is typically categorized into back office outsourcing, which includes internal business functions such as human resources or finance and accounting, and front office outsourcing, which includes customer-related services such as contact center services.
BPO that is contracted outside a company's country is called offshore outsourcing. BPO that is contracted to a company's neighboring (or nearby) country is called nearshore outsourcing. Often the business processes are information technology-based, and are referred to as ITES-BPO, where ITES stands for Information Technology Enabled Service.[2] Knowledge process outsourcing (KPO) and legal process outsourcing (LPO) are some of the sub-segments of business process outsourcing industry. In 2010, the Philippines surpassed India as the largest business process outsourcing industry in the world.[3][4] After growing 20 per cent in 2012, the BPO industry of the Philippines is estimated to gross revenue of upwards to $25 billion by 2016. By these estimates, the Philippines' BPO industry will account for approximately 10 per cent of the nation's GDP.[5]
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The main advantage of BPO is the way in which it helps increase a company's flexibility. However, several sources[which?] have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost efficiency, which allowed a certain level of flexibility at the time. Due to technological advances and changes in the industry (specifically the move to more service-based rather than product-based contracts),
companies who choose to outsource their back-office increasingly look for time flexibility and direct quality control.[6] Business process outsourcing enhances the flexibility of an organization in different ways: Most services provided by BPO vendors are offered on a fee-for-service basis, using business models such as Remote In-Sourcing or similar software development and outsourcing models.[7][8][citation needed] This can help a company to become more flexible by transforming fixed into variable costs.[9] A variable cost structure helps a company responding to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible.[10] Outsourcing may provide a firm with increased flexibility in its resource management and may reduce response times to major environmental changes.[citation needed] Another way in which BPO contributes to a companys flexibility is that a company is able to focus on its core competencies, without being burdened by the demands of bureaucratic restraints.[11] Key employees are herewith released from performing non-core or administrative processes and can invest more time and energy in building the firms core businesses.[12] The key lies in knowing which of the main value drivers to focus on customer intimacy, product leadership, or operational excellence. Focusing more on one of these drivers may help a company create a competitive edge.[13] A third way in which BPO increases organizational flexibility is by increasing the speed of business processes. Supply chain management with the effective use of supply chain partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a manufacturing company.[14] Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth goals while avoiding standard business bottlenecks.[15] BPO therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.[16] A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time. Although the above-mentioned arguments favor the view that BPO increases the flexibility of organizations, management needs to be careful with the implementation of it as there are issues, which work against these advantages. Among problems, which arise in practice are: A failure to meet service levels, unclear contractual issues, changing requirements and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing[17]
A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality Improvement approaches.[18]
Threats[edit]
Risk is the major drawback with Business Process Outsourcing. Outsourcing of an Information System, for example, can cause security risks both from a communication and from a privacy perspective. For example, security of North American or European company data is more difficult to maintain when accessed or controlled in the Sub-Continent. From a knowledge perspective, a changing attitude in employees, underestimation of running costs and the major risk of losing independence, outsourcing leads to a different relationship between an organization and its contractor.[19][20] Risks and threats of outsourcing must therefore be managed, to achieve any benefits. In order to manage outsourcing in a structured way, maximizing positive outcome, minimizing risks and avoiding any threats, a Business continuity management(BCM) model is set up. BCM consists of a set of steps, to successfully identify, manage and control the business processes that are, or can be outsourced.[21] Another framework, more focused on the identification process of potential outsourceable Information Systems, identified as AHP, is explained.[22] L. Willcocks, M. Lacity and G. Fitzgerald identify several contracting problems companies face, ranging from unclear contract formatting, to a lack of understanding of technical IT- processes.[23] BPO is a sector which is processed business from outsources.
Industry size[edit]
IT: The headquarters of Infosys, India's third largest IT company, is located in Bengaluru.
India has revenues of US$10.9 billion[24] from offshore BPO and US$30 billion from IT and total BPO (expected in FY 2008). India thus has some 5-6% share of the total BPO Industry, but a commanding 63% share of the offshore component. This 63% is a drop from the 70% offshore share that India enjoyed last year: despite the industry growing 38% in India last year, other locations like Philippines, andSouth Africa have emerged to take a share of the market[citation needed]. The South African call center industry has grown by approximately 8% per year since 2003 and it directly employs about 54 000 people, contributing 0.92% to South Africa'sgross domestic product(GDP).[25] China is also trying to grow from a very small base in this industry. However, while the BPO industry is expected to continue to grow in India, its market share of the offshore piece is expected to decline. Important centers in India are Bangalore, Gurgaon, Chennai, Kolkata, Mumbai,Pune, and New Delhi. In fact, the Philippines has overtaken India as the largest call center industry in the world in 2010.[3] The Association of Southeast Asian Nation (ASEAN) countries, along with the People's Republic of China and Indiaknown collectively as ACI countriesare likely to see services like BPO figure strongly in their economies over the medium term. Services trade among ACI countries has been growing at a very rapid rate over recent years, despite starting from a relatively low baseline. Although data are scarce and must be interpreted with caution, an analysis of applied services sector policies in the region suggests there is much policymakers can do to intensify this process, and increase the pace at which the transformation to a service economy is taking place.[26] Eastern Europe is also an emerging BPO destination. McKinsey reported that in 2010, 33,000 jobs were moved to Eastern European countries.[27]While the overall size of the industry and the number of developers in Eastern Europe is lower than India, the knowledge of European language such as French, Spanish, German and Italian by many Eastern Europeans, as well as the overall high quality of education in these locations, allows the BPO industry in this region to continue to grow. For example, the region has an estimated 17.2 million people with a
tertiary education, compared to 13.6 million in India, making it an attractive choice for BPO, especially if more specialized projects are to be outsourced.
Executives working in Indian Business Process Outsourcing (BPO)s serving American and British customers are suffering from major psychiatric and psychological problems, according to a project study. Worse, the study says, the nature of these problems sometimes requires medical intervention. Authored by Dr Mohsin Aziz, a Lecturer at Oman's Higher College of Technology, the report was published in the recent issue of Academic Journal of Interdisciplinary Studies.
Three BPOs from the National Capital Region were selected for the project study. A major finding of the report was that Indian BPO workers are yet to come to terms with the abusive behaviour of American and British clients.
What was first thought to be India's advantage - a large pool of English-speaking people - does not necessarily translate into success for Indian BPO staff. The reason for this situation, the study says, is that Indians have a pronounced accent. "English spoken by Indian call handlers is heavily accented. This often results in customers getting angry and abusive towards the call handlers. Despite call centres putting a lot of money in training young Indians in neutral accents, the Indian accents still comes through. The sound of an Indian accent often makes customers angry," the report mentioned. It notes that there were instances in which American and British companies shifted their base out of India due to customer dissatisfaction with native English speakers.
Read more: http://www.dailymail.co.uk/indiahome/indianews/article-2531931/Indian-BPO-workers-suffer-psychiatric-problems-foreign-abusereport-finds.html#ixzz2pvbStFAS Follow us: @MailOnline on Twitter | DailyMail on Facebook
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