Business Process Outsourcing (BPO) is fast
emerging as a flexible and powerful approach that business leaders adopt
to achieve their strategic business aims. BPO refers to the delegation
of information technology based business processes to an external
provider that owns and manages the selected process based on pre-defined
performance criteria. It allows the organization to focus on its core
competencies enabling it to manage growth and scale, reduce costs and
enable migration of best practices and processes from the outsourced
partner.
BPO services help mitigate risks and secure benefits through a
structured approach. These services include:
- Finance & Accounting
- Supply Chain Management
- Customer Relationship Management
BPO is fast gaining popularity due to the following factors:
- Factor Cost Advantage
- Superior Competency
- Utilization Improvement
- Economy of Scale
- Business Intelligence and Knowledge services
Through the right mix of process improvement, labor arbitrage and
technology enhancements, BPO is aimed at reducing cost, increasing
service levels and thus improving the enterprise value of the business
processes. Blending qualified workforce with and faster adoption of
well-defined business processes leads to higher productivity gains
without compromising on quality.
The different sectors that adopted BPO early include: Insurance,
Banking, Pharmaceuticals, Telecom, Automotive and Airlines. Of these
sectors, insurance and banking generate large amount of the savings
because of large proportion of processes they can outsource like claims
processing, loans processing and client servicing through call centers.
The offshore operations of the clients have increased owing to the
improvement in cost, quality and productivity.
When BPO first emerged several years ago, the term meant contracting of
one company by another to execute a business process end-to-end. By
definition, it goes a significant step beyond traditional outsourcing
contracts, in which a company delegates only components of a business
process to an outside vendor. BPO's momentum continues to grow as the
factors that force companies to focus on core competencies intensify.
Using BPO to respond to these demands is causing a significant shift in
the way business is being done, and it is requiring executives to be
creative. BPO offers enormous opportunities for change and is emerging
as one of the most important ways to build shareholder value.
