Business Process Outsourcing - BPO is the act of delegating in-house operations or processes to a third party. These responsibilities initially could have been an internal service or an existing system. Companies outsource to achieve cost savings which may occur when the cost of living is lower in the outsourced country.
There are 2 types of Business Process Outsourcing - BPO:
Frequently, Business Process Outsourcing - BPO is also referred to as ITES - information technology-enabled services as most of the processes include some form of automation. The concept of Business Process Outsourcing - BPO grew out of a need to focus on cost reduction and service improvement. Thus, the services transferred are essentially non critical non-core activities leaving the organization free to manage the brand.
The main motive behind Business Process
Outsourcing - BPO is to allow the
company to invest more time, money and
human resources into core activities and
building strategies, which fuel company
growth. It helps free up a company’s
capital and reduce costs besides
allowing the company to save on
recruitment, training and other human
resource costs it would otherwise have
to maintain internally.
The usual customers for Business Process Outsourcing - BPO are large organizations looking to enhance focus on their core business. Suitably executed, it presents organizations with an opportunity for radical improvement, not simply more of the same at a lower cost.
Business Process Outsourcing - BPO Evolution
By analyzing and understanding its value chain, an organization can focus on the elements that are core to its business and outsource others, while maintaining overall strategic control. By pushing more of the day-to-day functions into the hands of independent specialists, the board frees up brain space to focus on making the core business different - and better.
Business Process Outsourcing - BPO that is contracted outside a company's own country is many a times referred to as offshore outsourcing. Business Process Outsourcing - BPO that is contracted to a company's neighboring country is referred to as nearshore outsourcing, and Business Process Outsourcing - BPO that is contracted with the company's own country is referred to as onshore outsourcing.
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