BUSINESS PROCESS OUTSOURCING

What is Business Process Outsourcing?

Business process outsourcing is the leveraging of technology vendors to provide and manage a company's critical and/or non-critical enterprise applications. Through the business transformation process of service-oriented transformation, which leverages the technologies and standards of service-oriented architecture, companies can increasingly leverage third party companies that act as business service providers. Business process outsourcingcan use off-shore resources, but is not required.

Business process outsourcing otherwise know as BPO is the process of leveraging technology vendors in various third world or developing nations for doing a job which was once the responsibility of the enterprise. Or simply put, it is the process of shifting an internal job process to an outside/external company which might have a completely different geographical location.

Generally the processes being outsourcing as part of BPO are backend jobs like call/help centers, medical transcription, billing, payroll processing, data entry and the like. Most of these jobs are outsourcing by first world nations like USA and UK to third world nations like India, Philippines, China, Malaysia and some eastern European countries.
These nations have a good pool of English speaking youth who receive accent and job related training before they are inducted at a salary which is much lesser than what their counterparts in first world nations would demand. This allows first world organizations to get higher profits and provide better services by lowering the prices and by recruiting more labor than they could possibly do otherwise. In addition to benefiting the first world nations, business process outsourcing has also benefited third world nations by generating much needed jobs.

BPO as expanded sounds as Business Process Outsourcing and can be aptly defined as the act of utilizing the services of a third party by a company in order to perform its back office operations that might be payroll administration, customer help desks/ call centers, tele- marketing, accounting, billing; the list is endless.

• Business Process Outsourcing includes the following areas and a lot more
• Back office operations
• Customer Relationship Management
• Call Centers and telemarketing
• Tele-servicing and product support
• Payroll maintenance
• Finance / Accounting/billing
• Human Resources
• Logistics Management
• Supply Chain Management
• Medical transcription
• Back Office Operations
• Insurance Claims Processing
• Legal database maintenance
  

The BPO Industry

The BPO industry has flourished at a frantic pace in the last few years and companies have ended up with huge savings by being a part of the industry. By outsourcing their back office business processes to cheaper nations like China, India, Philippines, Mexico, South Africa etc companies can cut costs, better concentrate on their core businesses and strengths, ensure better customer satisfaction and in a way get an edge over their competitors. A report suggests that US firms have saved nearly $8 billion through outsourcing to third world nations like India.
Benefits of BPO
Increase productivity
Cut operational costs
Provide better service
Save costs
Improved accountability
The BPO boom seems to be increasing everyday with more and more companies deciding to follow the race, making conditions really viable for a positive growth in the BPO industry.