What Is Business Process Outsourcing?
Business process outsourcing (BPO) is a subset of outsourcing and involves using a third-party, contracted to perform specific, specialised processes on a company’s behalf. Thus it essentially means handing over operations and responsibilities of specific business functions to a third-party service provider. What would otherwise be the work of an internal system or service is now purely handled by an outsider.
Business process outsourcing traces its history back to the 1800s. America used Scottish workers to help build wagons and ships, thus outsourcing them. Another outsourcing practice is called ‘offshoring’, i.e., when foreign countries perform BPO services. Popular offshoring countries include India and the Philippines, where skilled labour is much cheaper.
Today, several large companies and a majority of businesses indulge in business process outsourcing. Usually, the business outsources the “less important” work so that it can concentrate on its primary area of work. BPO services like technical support, back office services, telemarketing services, inbound customer care services and outbound call centre services are among the few services that are outsourced by companies today.
The objective of business process outsourcing is to typically reduce the workload on the company and also hope to cut costs by handing over the work to a third-party. Sometimes even the labour costs involved are different in different countries, which is why several companies outsource work to far off countries. A good example of this would be a London based company outsourcing its brochure content work to India, since the labour is cheap yet creativity and good-quality work is available in abundance.
Usually, there are two types of BPOs, front office and back office outsourcing. Back office processes that are usually outsourced are billing, logistics and human resources. Nowadays, even claims processing at insurance companies are being outsourced to separate companies. Examples of front office outsourcing include technical support, customer service, marketing, and advertising.
BPO companies work in a similar fashion as a creative boutique. While they have a set of clients, their main revenue comes from work that is outsourced to them from larger companies and advertising agencies. Thus, when there are deadlines to meet or a huge proportion of work to be done, the easiest way to achieve this is to outsource it to a third-party. One of the biggest reasons that smaller outsourcing units thrive and earn a constant stream of revenue is because of the larger organisations that have reputed, large companies as clients.
With the IT industry booming in India and people recognising the numerous strengths of India, organisations throughout the world are outsourcing their services to outshore countries like India. It is also good to know that the Government of India has also taken positive steps and several initiatives to urge India into to recognising its true potential.
What is Business Process Outsourcing Management?
Business process outsourcing (also known as BPO) management is crucial to the development of a business if done right. We are basically talking about a special type of outsourcing that will contract just a part of the business functions or responsibilities of a company. For instance, a business process outsourcing company might be responsible for the management of articles in a content writing business. Although BPO can relate to a number of things, nowadays we usually use it to describe service outsourcing.
When talking about business process outsourcing management we are referring to the management of BPO in any company. Business process outsourcing can be divided in 2 main categories:
– Back office BPO – linked with different possible internal functions of a business like finance, accounting, human resources and so on
– Front office BPO – linked with services connected with customers
When people talk about business process outsourcing management that is done through the services of a company that is based in another country we must use the term “offshore outsourcing”. It is very common to mistake regular BPO with offshore BPO due to the use of outsourcing.
We need to understand that BPO management is really a big field of activity. For instance, in India alone we are talking about over 11 billion US dollars in revenues generated by offshore activities done for other countries. Very big profits have also been recorded in South Africa, Egypt, Philippines, Morocco and Eastern Europe. As a total figure we can say that the entire BPO market is currently worth over $150 billion.
Why Business Process Outsourcing Management?
The biggest advantage that comes from BPO stands in flexibility. By outsourcing we are faced with a more flexible working environment that eventually builds up more time and bigger profits. It is quite easy to find an outsourcing company that will work cheaper than the local market, all at the same quality level. Also, if we take away some business functions from a company we are faced with a better work flow and a better focus on the internal activities. This basically translates in an increase competency of the core of the company.
The bottom line is that business process outsourcing management can easily increase the growth of a small business and even a bigger business. At the end of the day it is important to understand this and even try to incorporate it in your own business. It is basically impossible not to find the right BPO Company to handle your outsourced needs. All that you need is a good outsourcing strategy and profits can constantly rise.
More About Business Process Outsourcing
It’s BPO that has developed as a new buzz word. It is something that offers benefits to every business. Did you ever wonder what is business process outsourcing all about? So have a close look at this article. To be very specific, BPO in simple words defines a process through which a company is found to transfer some of its non core or peripheral business processes.
When talking about the non core business operations, it naturally refers to the back office operations to a third party vendor. This is one process that offers the outsourcing service providers to take the total control over certain processes that stands significant for every business in terms of its growth and development. Nowadays, most third world destinations are found to include the major names of the service providers in this global market.
What makes business process outsourcing popular?
Business process outsourcing includes a range of specialized services starting from call center functions to the transaction processing and much more. Apart from these, the back office operations, telemarketing, the customer relationship management, payroll maintenance, billing, accounting, HR management, finance, logistics management, supply chain management, medical transcriptions are some of the other activities that are being efficiently carried out on a day to day basis by such firms.
The current industry trends shows us that, most of the things that are being outsourced by a company usually makes business process outsourcing stand out of the given rest. Hence, business process outsourcing stands to be one of the major segments in the entire outsourcing market. It is there to deliver whenever your business needs a boost.
Benefits of hiring a BPO:
By outsourcing the back office operations to the major third world destinations, most companies will be able to get huge cost cuts. Bestowing some of their business operations on the third party outsourcing vendors help companies to concentrate on the core activities leaving behind the worries of certain peripheral activities.
With the help of outsourcing, the BPO vendors will be able to offer better customer satisfaction thereby leading to the customer retention, increased profitability, customer retention and more. Industry reports suggest that by means of outsourcing the business processes to the countries like China, Philippines and India, most companies will be able to enjoy a cut on the operational costs thereby resulting in huge profits.
There is doubt why business process outsourcing is so much hyped. These days, most organizations, no matter how much big or small they are, have learnt about the growing advantages of outsourcing in their own business operations. These companies are on its way taking a huge dive into this industry.
Are you planning to try out your hands in this BPO wave? If yes, then you require formulating some effective plans. Get to understand your own vision together with your long term objectives. Following next will be your decision to find out the exact BPO destination and the most significantly on the vendor so that you can travel a long way ensuring smooth operations and good returns from the entire process.
Business Process Outsourcing – An Overview
Business Process Outsourcing (BPO) is the corporate practice of hiring an outside company to execute select business activities. This article informs the reader of the various types of BPO services available in the industry.
Business Process Outsourcing (BPO) is essentially a change in business model. It involves hiring a global services company to perform certain business tasks. Outsourcing companies are frequently employed as a corporate cost-saving measure. Generally, work outsourced to a third-party service provider is needed by the organization in order to make business processes for efficient, however is not a part of the company’s core operations.
In the infancy of BPO, outsourced tasks were limited (e.g., payroll, human resources, accounting). As time progressed, business process outsourcing services have grown to include additional business value solutions such as legal services, healthcare, insurance, telecommunications, utilities and energy, and many more.
BPO can be classified into two categories: shared back office and shared front office processes. Back office outsourcing involves internal business functions, such as finance, and accounting. Front office outsourcing encompasses tech support, marketing and customer-related services. Organizations also outsource processes healthcare, insurance, shipping and logistics.
Outsourcing can be categorized into three categories based on the location of the outsourcing company (relevant to the company’s primary place of operation). The three categories include: offshore, near-shore, and onshore outsourcing.
Offshore outsourcing is contracting business functions to a company located in another country. Many companies around the world continue to use offshore outsourcing to minimize overhead, to access the innovations and developments of more specialized suppliers, and to make internal process more efficient.
A task outsourced to a neighboring country, which often shares a border, is deemed as near-shore outsourcing. This is often preferred due to the closeness in geographic location, the culture similarities and the similar time zones. For example, companies in the United States frequently near-shore outsource to the adjoining countries such as Canada and Mexico.
Onshore outsourcing (also called domestic outsourcing) is contracting business responsibilities to another organization located within the same country. This option can be used for strategic reasons, including when very specialized expertise is needed that cannot be found elsewhere. The local proximity of onshore outsourcing also facilitates with in-person contact with contractors.
Regardless of the classification, outsourcing business solutions and services continue to increase, and the sky is the limit. Driven by marketing and operations performance, business executives strive to meet global productivity standards while minimizing costs. This results in more and more companies using outsourcing and business process strategy to use global services and increase business performance.
The savviest of companies have taken this great opportunity and have made global business process outsourcing part of their business strategy. If you would like to take part in this momentum of change and are looking for alternatives to implement within your business, contact a global services company for more information.
An Overview on Business Process Outsourcing
Business process outsourcing (BPO) is an outsourcing tactic in which a company sub-contracts its non-core activities to another company for services that it holds competitive advantage. Firms have been investing in many areas but only a few of these areas are of competitive advantage to them. Such firms would spend much of their resources on all these areas while only a handful of them are of competitive significance. The BPO concept shows these companies that it is only sensible to focus on the processes that it has competitive advantage. BPO implements specialization in that it encourages businesses to maximally indulge in activities that are of economic worth and leave the rest to other concerned parties. In a company’s structure, there are three main segments in which business processes can be divided into:
• Core processes – Refers to processes that are of immense importance to a company and are competitively significant.
• Non-core, critical processes – These are important processes that lack competitive significance.
• Non-core, non-critical processes – Such processes are only required by the company because they are vital for the business environment to thrive.
BPO has two main categories:
· Front office outsourcing. Mainly includes customer-related services such as technical support.
· Back office outsourcing. Deals with internal functions of the business such as purchases.
Apart from the above mentioned categories, BPO can also be categorized into onshore, near shore and off shore outsourcing. Onshore outsourcing refers to businesses that have been contracted within the company’s country. At times, contracting businesses to a firm neighboring the company is alternatively referred to as near shore outsourcing or it may still be regarded as onshore outsourcing. Offshore outsourcing refers to business activities that have been contracted outside the company’s country.
There are a number of benefits that befall a company once it has outsourced its business activities, but I will state a few:
· BPO helps the business concentrate and invest its resources on its core business sectors. The company saves on its resources such as money, labor and time.
· It is likely to lead to increased revenue. A company is more likely to be efficient when it concentrates on its core processes. This will lead to production of better quality goods and services resulting in higher returns.
· BPO helps businesses use outside expertise. In off shore and near shore outsourcing the business is able to tap into the market of the destination country instead of recruiting experts and sending them to the country where the company operates from.
A country experiences a variety of advantages when business activities are outsourced within its territories:
· The infiltration of BPO activities in a country results in increased employment opportunities. Most businesses are outsourced to developing countries. This is good news bearing in mind that most developing countries have a high rate of unemployment. The influx in outsourced businesses creates a whole new sector that provides employment. These companies tap into the local skill market, reducing the rate of unemployment.
· Continued indulgence in BPO activities may lead to greater reserves of foreign currency. The more a country attracts BPO activities, the greater its chances of having an influx in foreign exchange. This is good news particularly if the US Dollar is involved because it is the reserve currency of the world economy. Increase in US Dollar reserves increase the financial muscle of an economy especially when engaging in international trade.
· It has mended relations and prior perceptions about developing countries. Most developed countries had bad perceptions regarding developing countries. They didn’t think that these countries had the skill to match their labor force. The ill prior perception has greatly changed with the impressive results and tremendous progress of BPO. It is even improving relations among these countries.
· It is a chance for the country to scale the various levels of outsourcing. There are different aspects of outsourcing and they have an order. They are mainly categorized in reference to their degree of complexity. BPO is of a lower rank. If BPO companies are set up in a country and they are successful, that may be used as an indicator that the country is able to handle a much more complex form of outsourcing such as knowledge process outsourcing (KPO).
Business Process Outsourcing: Making Time for Business Owners to Explore Growth
It is common practice for many business owners to attempt to do as much as they can to maintain the needs of their businesses. Often times, this attempt to rely on themselves for everything becomes an impediment to creating an environment for the business to keep growing, flourishing, expanding, and succeeding. To rely on another person is perceived by many as giving up some of the control and responsibility – taking the easy road. However, a business owner needs to rely on others to free him- or herself up to focus on matters such as expanding their business, addressing challenges, etc. The key is to determine what business processes can be outsourced, what needs to be kept in house, and what scenarios would dictate outsourcing.
When to allow business process outsourcing
Business owners may recognize early on in their businesses (or it may take much longer) that they are too busy to continue to maintain the day to day books. They may be burning the candle at both ends, and they simply may not have enough time at the end of the day to do the paperwork, to pay the bills, address the invoicing, etc. The health of the business can be dramatically impacted by the lack of consistency in the paperwork. Bookkeeping is the number one task in small businesses that owners routinely neglect and struggle with managing in their operations. Employing business process outsourcing to do the bookkeeping will allow the paperwork to get done much faster than adding it to your list of ongoing tasks.
Another reason that a business owner may enlist business process outsourcing is when they acknowledge that they do not have the skill sets, knowledge or expertise to undertake the financial management of the business – this may include accounting, bookkeeping or both. He or she may also be lacking in the knowledge to use the software or technology that is required to successfully undertake the tasks.
In both of the above situations, if the issue is not acknowledged early enough, there can develop a backlog of paperwork, possible inadequate filing of taxes, payroll challenges or an overall mess to clean up. In this situation above all others, addressing this by business process outsourcing, such as hiring a financial firm that also provides accounting and bookkeeping resources and risk management, can help the business to keep running smoothly.
There are many benefits to providing business process outsourcing in the area of technology, accounting or bookkeeping; but one of the main reasons for a small business owner to consider outsourcing is the time and expertise that can be gained.
By passing off the day to day paperwork, a business owner can have more time to network, to build partnerships and grow the business, to focus on the big picture, and to avoid being overwhelmed by the accounting or bookkeeping. One gains even more when business process outsourcing is done with a firm that can address all the nuances of the business.
Many companies have multi-disciplinary teams that can streamline processes; many companies will work with you, your needs and your budget and help you build a long term plan to continue to use business process outsourcing. Some companies will even partner with you and your current in-house staff to create your plan, address your needs and implement requirements.
Business Process Outsourcing Is Becoming A Part Of Every Business
Business process outsourcing is all about hiring the other businesses to deliver the work to you, so that you can concentrate on the core activities of your business. The core activities have been more important for establishing a particular business in the field. After all, you are spending so much to set up your business and missing out the core activities can cast a bad spell on the growth of your business. It is for this reason that big business house keep on outsourcing their non-core work, so that proper time should be given to the profit generating aspects of the business.
The concept of Business process outsourcing has been spreading its wings everywhere. Business process outsourcing is the outsourcing of back office and front office functions typically performed by white collar and clerical workers. It is like a contract that enables the business person to hire the services of an outsourcing firm that will manage and complete the tasks for them. As far as the contract policies are concerned, it becomes the entire responsibility of the service provider to complete the task well in time. Business process outsourcing is becoming more and more demandable and promising.
Business process outsourcing saves precious management time and resources and allows focus while building upon core competencies. There are various companies in foreign countries that keep on outsourcing their work such as call centre work, accounting work and many others. Outsourcing these forms of tasks also proves to be cost friendly for the big business houses. The company will not only save on the house rent allowances, bonuses, cash advances and various other ad ons, but will also be able to cut down on the huge salaries that a trained staff would demand.
When it comes to small business houses, it becomes difficult for them to outsource. Since the owner of these business houses keep on managing the task on their own; they hardly outsource their work to any other company. Whatever the case may be, business process outsourcing helps to a great extent in saving the money that can be invested in enhancing the progress of other departments. The main aim of this service is to save you from problems that may crop up at any point of time. In fact, business process outsourcing has become an important part of every type of business.
There are various things that have to be tackled in a particular business. If you are running a business house and are getting worried about the increasing load of the work, then outsourcing is the best option for you. Usually, the concept of business process outsourcing has earned a wide acclaim. This service providing division is slowly and slowly entering every business house and is creating a special place for itself. The professionals with outsourcing companies are skilled enough to manage the tasks properly and complete the work on time.
About Business Process Outsourcing
Simply put, Business Process Outsourcing is getting another company to handle some of your activities for a payment. The concept made its way into the corporate world in the 1980s. Initially, payroll functions were handed out for outsourcing. Then companies included the management of employee benefits for outsourcing. It is now common place for Call Center operations, Finance and Administration functions, Accounting, Customer Service related activities and Human Resources related activities to be outsourced. Presently, activities of a company which are considered as ‘non-core’ to the running of the business come under the gamut of activities which can be outsourced.
Business Process Outsourcing allows companies to invest their surplus manpower, time and money, freed by the process of outsourcing, in carrying out core business functions. This helps companies to grow fast, as precious resources are not tied up in non-productive activities. It is easier to identify jobs which can be outsourced. In the process of outsourcing non-core activities, a business becomes efficient and productive. It is seen that Business Process Outsourcing frees up capital of a business, which otherwise is tied up in carrying out non-core activities. This capital can be redeployed in the business.
At this juncture, it should be understood that Business Process Outsourcing and IT Outsourcing are different. The former involves outsourcing of activities which are not the core activities of the business. Development and management of applications, Data Center Management, quality control and testing are some of the activities which come under the umbrella of IT Outsourcing. These IT related activities can be handled by service providers or IT companies.
Outsourcing contracts normally run for a long period of time and involve huge amounts of money as contractual payment. Transfers of persons working in the company on the outsourced activities to the service provider can also happen. Some of the companies which have made a name for themselves in Business Process Outsourcing are Cap Gemini, Indian companies like Wipro, TCS and Infosys, and Companies like Accenture and IBM in the USA.
A number of the Business Process Outsourcing companies are based offshore. This means that the company doing the outsourced jobs for you, carries out these jobs in another country. India, China, Russian and Malaysia are some such offshore countries where Business Process Outsourcing companies are facing boom time. Business Processing Outsourcing companies are also synonymous with Information Technology enabled services or ITES. Knowledge Process Outsourcing (KPO) is the latest concept in the business world. Those jobs which need education, knowledge and skill to be handled can be handed over to KPOs.
Some of the problems in the field of Business Process Outsourcing are the increasing reports of information on customers and internal processes of companies being sold in the open market by employees of the service providers. This creates security risks and has detrimental effects on the company which has outsourced.
With the growth in outsourcing activities, there is also a growing resentment in the USA and UK (countries which have done the maximum outsourcing) against the loss of white-collar jobs in these countries. These issues have to be sorted out along with the risks associated with Business Process Outsourcing.
Know More About Business Process Outsourcing
The Internet Revolution started off a series of cascading effects in Information Technology; Business Process Outsourcing (BPO) is one of them. The term refers to the method of using third-party services to take care of your own business operations that require fine-tuned skills. In its earliest form, business process outsourcing applied mainly to manufacturing companies for e.g. soft drinks manufacturers who used outsourcing for their supply chain systems; however, since technology practically took over the world, it now applies to a host of services chiefly using the Internet to complete tasks.
The word ‘Outsourcing’ became a much used buzzword in corporate circles in the mid 1990s. Outsourcing means the process where the services of a third-party service provider are contracted for various business operations. Coinciding with the Internet revolution, BPO came to indicate the process of ‘leveraging the skills and expertise of technology vendors in low-cost economies to accomplish internal tasks that were once the responsibility of a particular business enterprise’. Simply put, it denoted the process of shifting internal job functions or delegation of non-core operational jobs to an external company (contractor or sub-contractor) to an external company in a different geographical location which specialized in a particular process or operation. Outsourcing helped businesses focus more on core competencies and gain advantages by saving on infrastructure and staffing costs. These vendors established ‘call centers or help centers’ in their own countries equipped with infrastructure and staffing; the entire setup was contracted to the company providing the job. The processes outsourced as part of BPO included data entry, billing, medical transcription, payroll processing etc. The outsourcing process suited first-world nations like the USA, UK and Europe that transferred jobs to third-world countries primarily in Asia like India, China, Malaysia, Philippines etc. By outsourcing, they benefitted from paying low wages and salaries to contracted labor rather than pay high cost salaries and benefits to in-house or local employees.
Business Process Outsourcing (BPO) is also generally referred to as ‘offshore outsourcing’ as the outsourcing process is sent to another country. The term ‘near shore outsourcing’ is used to refer business operations outsourced to a neighboring country.
Business Process Outsourcing (BPO) used to be known as a subset of the outsourcing process which involved the operations and responsibilities of specific business applications and processes to a contracted third-party service provider; it is now used more in the context of Information Technology Enabled Services (ITeS).
Typically, BPO is categorized as front-end outsourcing to denote areas involving customer-centric services like contact centers, billing centers etc.; the back-end outsourcing indicates internal business area functions of a company like accounting, finance, human resources etc.
Quite often, BPO services involve IT and ITeS; two important sub-segments of the BPO industry are Knowledge Process Outsourcing (KPO) and Legal Process Outsourcing (LPO).
Benefits and limitations
• Improves company’s organizational flexibility
• Transforms fixed costs into variable costs
• Increases focus on core competencies
• Speeds up business processes and retains entrepreneurial agility
• Maintain growth goals by avoiding business bottlenecks
• Less capital expenditure and outlays
• Failure to meet service levels
• Unclear contractual issues
• Unforeseen changes in requirements and changes in costs
• Dependence on outsourcing which may affect internal functions
How Can Business Process Outsourcing and Manufacturing Help Your Business?
The practice of using a third party which is contracted to perform specialized and specific processes on a companies behalf is called Business Process Outsourcing. Earlier outsourcing meant companies used outside accountants to balance the books but now outsourcing is used by many large companies and businesses on a much larger scale.
Some part of the business is outsourced and the company is able to focus on its primary purpose, whatever that may be. Also, managers have much less time and there are limited resources in the business. Managers can get help in order to set priorities as the customer service is being handled by an outsourcing vendor.
Front office and back office outsourcing are the two primary types of business process outsourcing. Advertising, marketing, customer service and technical support are included in front office outsourcing while the back processes that might be outsourced are human resources, logistics, billing and payroll. Services are also offered by some companies in job recruitment, credit analysis and collections.
Processes like claim processing at an insurance company and other processes which one may think cannot be outsourced are also being outsourced these days. Small companies which are not able to afford in-house support service can gain from outsourcing which allows for the company to have a higher level of efficiency.
One parts of Business process outsourcing is the foreign call centers that are located in different parts of the world. Although most of the companies claim that customer support is their top priority in many cases they end up with people who have little interest in the company. The main reason is that a lot of money is saved when customer service is outsourced to countries like India. Obvious scripting and accents are some of the biggest customer complaints that occur with foreign call centers.
Cost may be one of the reasons why companies utilize Business process outsourcing service but another factor is that the company does not have the expertise to deal with certain aspects of the business. Outsourcing also reduces the risk involved in business.
The risk is managed by the companies who provide outsourcing. Using Business process outsourcing in order to cut costs has made many companies face criticism especially in case of call centers. Many companies located in the United States, Europe etc are outsourcing their work to countries like India because they are able to get services at an excellent price. This is because many of these countries have low cost of living, high unemployment rates and a well educated labor pool. In 2006, India had 63% of the offshore Business process outsourcing market.
Many western workers are losing their jobs to foreigners. Although companies improve their bottom line by outsourcing they are also facing harsh criticism because of the decline in the quality of customer service. Now, Business process outsourcing is popular but due to employee and consumer backlash and restrictions from the government on taxation Business process outsourcing may become less popularity in the future.
Business Process Outsourcing 2.0 – BPO Solution for Small and Medium Businesses
Business process outsourcing (BPO) was once the domain of big businesses with big budgets and big needs. It usually referred to “big” processes, too, like manufacturing on a grand scale. And it was also commonly associated with the controversial practice of “offshoring” – where a business would engage in the process of outsourcing its needs to BPO solution providers in developing nations.
Today – due to the convergence of the Internet, new technology, and a global talent pool – business process outsourcing is no longer just for big businesses. Small and medium businesses have become a rapidly growing part of the business process outsourcing space (even home-based businesses are waking up to – and taking advantage of – the benefits of business process outsourcing).
And, unlike in the past, big budgets and big needs are not required for entry into the business process outsourcing space. The BPO solution of today is now so scalable that a huge number of BPO projects are really nothing more than basic tasks that commonly consist of only a few hours of work. And with contractor charge-out rates that start at less than $1.00 per hour (the old adage that “you get what you pay for” should not be ignored), it’s not uncommon for many business process outsourcing projects to cost less than $50 or $100.
Finally, while offshore options continue to be alive and well in the business process outsourcing space, there are a growing number of BPO solution provider contractors that can be found within the US, Canada, and the rest of the Western World, necessitating a reconsideration of the meaning of the term “offshore.”
Clearly, while the fundamental underpinnings of business process outsourcing remain the same, who uses BPO – and how they access a BPO solution – has undergone a dramatic transformation.
And it’s a transformation that’s worth taking note of.
Business Process Outsourcing is a Simple and Straightforward Process
Although there are differences between what every “new breed” BPO solution provider offers and also differences in how client companies work with the various BPO solution providers, the process for outsourcing a project is pretty similar for all BPO solution providers and generally involves – to one degree or another – the following steps:
- Signing up for a free account
- Finding a contractor or contractors for a project or ongoing work, which consists of either:
- Posting a scope document, specifying project/work details, rate of pay or project value, and contractor requirements; or
- Searching for a contractor by specifying parameters in the contractor search facility such as pay rate, experience, number of hours logged, feedback rating, and so forth
- Choosing contractor or awarding a project or work assignment
- Handing over project or work assignment details and any “raw” materials
- Inviting coworkers into a virtual “work room” if desired or necessary
- Monitoring work in progress
- Reviewing and signing off on completed projected or work assignment and virtual “timesheets”
As you can see, the process is pretty painless. And, more importantly, it’s also very effective at delivering on desired outcomes – due, in no small part, to unprecedented levels of transparency into work-in-progress that allow for course-correction throughout the process and that also ensures that companies pay only for work that gets done.
Business Process Outsourcing Offers a Wide Range of Outsourcing Opportunities
While an exhaustive list of tasks, projects, and processes that can be outsourced to the “new breed” of BPO solution providers is beyond the scope of this article, the following list provides a high-level overview of the many opportunities for business process outsourcing:
- Web Development
- Software Development
- Networking and Information Systems
- Writing and Translation
- Business Services
- Graphic Design
- Customer Service
- Sales and Marketing
- Administrative Support
Make sure that you give careful consideration to the types of tasks and processes that are listed above, especially those that are alive and well in your business but that are not core to what you do.
They are prime candidates for the kind of business process outsourcing solution that the new breed of providers offers (even if you’re currently outsourcing to a local business).
Best Way for Newcomers to Get Started with Business Process Outsourcing
The best way for any business (or individual entrepreneur) to get started with the new breed of business process outsourcing providers is to run several small-scale tests with different contractors on low-risk projects.
Choose some time-intensive, everyday tasks that don’t require a high level of skill but that drag on your productive time (or on the productive time of someone else in your business) and that, if you were able to spin them off to someone else at a low cost, would free you up to focus more of your time on revenue-generating activities.
This way, you’re free of the burden of risk – which should help you get past the “should we or shouldn’t we” question – and you’ll get to experience the process of working with a BPO solution provider – and the many benefits of business process outsourcing – first-hand.
The time to begin to explore business process outsourcing and other workforce productivity solutions [http://www.optimizemyworkforce.com] for a small or medium business is now – not when a financial crisis forces you to look for ways to trim costs. The new breed of BPO solution providers make it easy and viable for any small or medium business to outsource virtually any one of a number of different tasks, activities, and processes.
Don’t put it off to another day. Every day that passes costs you money in excess expenses and lost opportunities.
Tips to Make Business Process Outsourcing Profitable
Business process outsourcing has recently become much more of a pronounced trend and is evident in a wide range of companies of all sizes. The reasons for turning to the use of outsourced services vary greatly from one company to another. Some businesses are looking to achieve economies of scale, while other organizations would like to access things, such as a complete technology infrastructure, without having to build their own.
For other companies, their primary motivation in utilizing process outsourcing is to attain quick access to specific expertise and use the experiences and strengths of the company that is providing the outsourced projects and services. This allows each company involved in a large-scale outsourcing project to focus on their own strengths and capabilities, while outsourcing their weaknesses to another company that excels in that particular function. Many times, unique business alliances form using this strategy and sometimes a pair of companies will outsource various services to one another.
There is no lack of examples of the ways in which companies have made use of business process outsourcing over the years. A vary common example is corporations making use of travel agencies to take care of all the details of their business travel needs. Relying on travel agencies not only puts the burden of the details on the agency, but often results in savings because of the expertise and connections that these agencies have in procuring the best prices on business travel.
Another common example is the outsourced handling of employee benefits and payroll services, and is also very common when it comes to accounting functions. In the midst of the internet boom, many such outsourcing service providers developed packages specifically designed to meet the needs of the start-up internet companies.
Strategic sourcing, procurement, information technologies, inventory management, marketing and advertising, logistics, distribution, customer service through outsourced call centers, and subcontracted manufacturing functions are just a few of the additional business processes that are outsourced on a regular basis by many organizations. Often companies will start by outsourcing just one function, but find the practice to be so beneficial that they expand to outsource additional functions as they experience growth or as part of an expansion strategy.
When arranging for strategic business process outsourcing, finding the right outsourcing partners is of paramount importance. The companies that provide various outsourcing services must be able to effectively demonstrate that they have the required expertise and methodology in place. They should also have a strong positive reputation and should be willing to provide references that can attest to their capabilities.
In addition, it is a prudent practice to look for the value-added services that are offered in conjunction with the outsourcing services. For example, in situations when a company wishes to outsource inventory management, or are looking for a company to manage supplier networks for them, outsourcing the entire process involved can be invaluable for smooth project management from beginning to end.
Another aspect that should be remembered is that an organization cannot improve what is not measured. In order for business process outsourcing to be viable, strict guidelines must be put into place in the outsourcing contract, in terms of expected service delivery and performance levels.
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