Business
Process Outsourcing (BPO) is a type of outsourcing in which a
company outsources non-core business processes to another company. BPO is the
most flexible form of outsourcing, involving a close relationship between the
customer and outsourcing provider.
Unlike piecemeal outsourcing of
individual projects with specific deadlines and budgets, business process
outsourcing may not have fixed time or budget restrictions. With BPO,
outsourcers are in charge of an entire functional area of the business, not
just separate tasks.
BPO advantages and disadvantages
The main motive behind business
process outsourcing is to allow a company to invest more time, money and human
resources in core active items without losing quality and name. Thus, cost
advantage followed by increased ability to focus on core competencies is the
major driving factor. Other advantages
for a firm include:
·
Improved efficiency and operational performance;
·
Productivity improvements;
·
Access to expertise and superior competency;
·
Operational cost control;
·
Improved accountability;
·
Shorter project delivery times;
·
Opportunity to focus on core business concerns;
·
Enhanced employment opportunities;
·
Handling of miscellaneous jobs;
·
Access to newer markets (in case off shoring);
·
Benefits derived from the experience of the service
provider; etc.
It is important to dwell upon the
possible disadvantages of BPO
services before outsourcing any work. Here is a list of some of the
shortcomings BPO companies.
· Although outsourcing is considered cost-effective, there
are some hidden costs. So before signing an assignment make sure to have
detailed contract paperwork.
· A single BPO company may associate with multiple
organizations at a time. Consequently, providers cannot concentrate
comprehensively on assigned tasks. This will lead to slow turnaround times,
poor quality and sluggish issue settlement.
· If the right BPO provider is not chosen, it is
difficult to get the expected final outcome. There may be issues related to
linguistic variations, time frames and classification of responsibilities.
Sometimes, outsourcing leads to loss of control above the corporate business
processes.


