BPO Advantages-

Cost reductions- Cost reduction is done through process improvements, reengineering

and use of technologies that reduce and bring administrative and other costs under
control.

Concentration on core business- With the day-to-day back office operations taken
care of, the management is free to concentrate more on the core business of the
company.

Outside expertise- Company is saved from the hassles of recruiting and training
personnel. BPOs ensure that experts from another company provide the needed
guidance and skills.

Cater to changing customer demands- It is another great advantage of out

sourcing the business processes. Many BPOs provide the management with
flexible and scalable services to meet the customers' changing requirements, and
to support company acquisitions, consolidations, and joint ventures.

Revenue increase- As stated above, by outsourcing non-core processes,

companies can concentrate on increasing their sales and market share, develop
new products; spread out into new markets and increase customer service and
satisfactions.

Disadvantages of BPO.
Loss of managerial control, because it is more difficult to manage outside service providers than
managing one’s own employees working possibly in · Often the hidden costs are difficult to
calculate or prepare for. These include legal costs related to putting together a contract between
two companies and the time spent to coordinating the contract. · Another disadvantage of
outsourcing can be a threat to security and confidentiality. If your company is outsourcing
processes like payroll, medical transcriptions or other confidential information, a company must
be very careful in choosing which process it wants to outsource and to which provider. · A
possible loss of flexibility in reacting to changing business conditions, lack of internal and
external customer focus and sharing cost savings may also be a disadvantage of outsourcing. ·
Other disadvantages of outsourcing may include unfavorable contract lengths, loss of
competitive edge, problems in contract renewal, and contractual misunderstandings.