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Written by Maximus   
Friday, 13 June 2008 20:59

BPO is the process of hiring another organization to handle non core business activities of the company. In general, it is the process of transferring an internal job work to an outside/external organization which is totally situated in different geographical place. In the beginning days, the BPO services frequently consisted of off shoring processes like payroll. Then it rises to include employee benefits management. At present it covers a number of functions that are considered "non-core" to the primary business strategy. Firm that is contracted outside a company's country is called offshore outsourcing and that which is contracted to a company's neighboring (or nearby) country is called nearshore outsourcing.

The services which are being off shored would be backend jobs like call and help centers, transcription, billing, payroll processing and data entry works. The contract between the vendor and client often engage a multi-year agreement that can run into hundreds of millions of dollars.

The work is divided into two categories:
  1. Back Office: Which includes internal business functions such as billing or purchasing.
  2. Front Office: This consists of customer-related services such as marketing or tech support.
One of the most important advantages is the flexibility it offers. Most services provided by offshore vendors are on a fee-for-service basis. Secondly the clients are able to concentrate on their core business.

A third way in which business process outsourcing increases the firm’s flexibility is by increasing the speed of business processes. The vendors use the latest technology which reduce the cost and increase the efficiency. Business process outsourcing increases the speed of business.

Finally, flexibility is seen as a stage in the firm’s life cycle. A company can gain the benefit of maintaining ambitious growth. They allow the firms to maintain their business speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded.

The persons, working in BPO companies, know the significance of security. They never break the rules defined for them. At present the offshore firms is taking well-built security measures to prevent any abuse of the details of the clientele.

Advantages of Business Process Outsourcing:

An important aspect is its facility to corporate executives from some of their daily process management responsibilities.

Some of the advantages of the BPO are listed as below:
  • Cost reductions: Cost-cutting is one of the major reasons to outsource. The vendors work for less cost with quick turnaround time. They work for 24*7 for 365 days. Hence the cost for the client is reduced up to 60%.
  • Focus on Core Business: Every business has limited resources, off shoring the work will help you in concentrating on your core business. The outsourcing firm will take care of every issue raised by the client. Hence you can concentrate on core business.
  • Reduce risks: Every business carries a certain amount of risk. Markets, competition, and technologies all change very quickly. The vendor’s keeps the data’s very secretly and takes up the backup which protect the data from the client. Thus they reduce the risk factors.
By off shoring the non-core business processes, companies can aim on increasing their sales and business, develop new products, improve customer services & satisfactions and grow up the business in the global market.
Last Updated on Saturday, 13 June 2009 21:03