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An overview of business process outsourcing

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  1. What is a BPO?
  2. Why outsource?
  3. Back office operations evolution
  4. Types of back office services
    1. Administration
    2. Finance
    3. Human resource
    4. Payment services
    5. Other transaction processing
  5. Setting up a back office business
  6. Rules for success
  7. Business process outsourcing includes
  8. Advantages and disadvantages of BPO in it industry
    1. Business benefits
  9. Diving into BPO: five mistakes and how to avoid them
    1. Not knowing why
    2. Not performing due diligence
    3. Not having a transition plan
    4. Not getting It in writing
    5. Not building a relationship
  10. Offshore outsourcing: Implementing change
  11. Offshore outsourcing: Building processes and identifying suitable
  12. BPO: No easy picking
    1. Customer centric activity
    2. Install quality systems and processes
    3. Capital intensive and longer sales cycle
    4. Scalability
    5. Positioning in the BPO value chain
    6. Domain knowledge
    7. Participate in consolidation
  13. Bibliography

Companies are increasingly outsourcing key business functions and their related IT operations. The BPO industry is built around the raison d' etre of efficiency and cost-effectiveness. With the current focus on core business capabilities, many companies are outsourcing select business functions to expert partners. BPO takes a set of activities and takes on the responsibility of re engineering the entire way the operation is done. Outsourcing is required in different areas like Finance, Health, Accounting, Human Resources of companies, etc. Globalization, competitive markets, and mergers and acquisitions are the primary stimuli for business process outsourcing. By outsourcing business processes, companies can get a firm assessment of the cost of running their operations. The philosophy behind BPO is specific, does what you do best and leave everything else to business process outsourcers. Companies are moving their non-core business processes to outsource providers. BPO saves precious management time and resources and allows focus while building upon core competencies. The list of functions being outsourced span purchasing and disbursement, order entry, billing and collection, human resources administration, cash and investment management, tax compliance, internal audit, pay roll?the list gets longer everyday. In view of the accounting scandals in 2002 (Enron, WorldCom, Xerox etc), more and more companies are keen on keeping their investors happy. Hence, it is important for them to increase their profits. BPO is one way of increasing their profits.

A recent landmark study of BPO practices among many of the world's leading corporations shows why business has recognized the financial and operational advantages in securing the services of a professional organization to manage non-core activities. Many organizations have commenced the process of better positioning themselves through outsourcing non-core functions and have already begun to reap the many benefits listed below.

[...] Advantages & Disadvantages of BPO in IT Industry Business Benefits: Increase market strength Reduce capital costs, overhead costs and investment risks Renew value to transaction-intensive business processes Increase access to state-of-the-art technology Improve service levels Increase security Business Process Outsourcing helps a company to achieve competitive advantage. It helps a company to move up in the value chain. Diving Into BPO: Five Mistakes and How to Avoid Them: Compared with traditional IT outsourcing, business process outsourcing can mean greater risk, and greater reward. [...]

[...] Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive business processes to an external provider that in turn owns, administers and manages the selected process based on defined and measurable performance criteria. BPO involves turning over an entire function or business process to a back office supplier (for instance the resource management of an organization which may involve payroll and finance; information technology; human resources; inventory management). As corporations merge and consolidate operations, this trend towards outsourcing basic business processes is becoming a new business model for international corporations. [...]

[...] These will be the leaders that will contribute to the success of the program Offshore Outsourcing Building Processes and Identifying Suitable: Offshore outsourcing will affect your infrastructure and your people. Companies have formal and informal processes in their development organizations. Some are documented many are not. When you outsource your service provider will not be savvy to your processes or your work standards. Every interface or facet of your development process will need to transform or change to accommodate any offshore outsourcing. [...]

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