Business Process Outsourcing

This article gives the broad information of BPO. BPO is a subset of outsourcing that involves the contracting of the operation and responsibility of specific business function to third party service provider. This was associated with manufacturing firms, such as Coco Cola that outsourced large segments of its supply chain. In that contemporary context, it is primarily used to refer to the outsourcing of services. BPO is categorized into back office outsourcing –which includes internal business function such as human resource or finance and accounting, and front office outsourcing – which includes customer related services such as contact center service.

BPO that is contracted outside a company’s country is called offshore outsourcing. BPO that is contracted to company’s neighboring country is called near shore outsourcing. Given the minimum of BPO to the information technology Industry, categorized as an Information Technology Enabled Services or ITES. Knowledge process outsourcing (KPO) Legal Process Outsourcing (LPO) is the some of the sub-segments of business Process Outsourcing industry. As of 2008, around 0.7 million people work in outsourcing sector. Annual revenue is around $11 billion, around 1% of GDP.

Benefits and Limitation of BPO

An advantage of BPO is the way in which it helps to increase company’s flexibility. Therefore business process outsourcing enhances the flexibility of an organization in different ways.

Most services provided by BPO vendors are offered on fee-for-services basis. This can help a company become more flexibility by transforming fixed into variable cost. A cost structure helps a company responding to change in required capacity and does not required a company to invest in assets. There by making the company more flexibility in its resources management and may reduce response time to major environmental changes.

Another way in which BPO contributes to company’s flexibility is that a company is able to focus on its core competence, without begin burdened by the demand of bureaucratic restrains.

A third way in which BPO increase organization flexibility; is by increasing the speed of business process. Using the techniques such as liner programming cycle time and inventory levels, which can increases efficient and cut costs. A company can maintain growth goals while avoiding standard business bottlenecks. BPO therefore allows firms to otherwise sacrifice in order to become efficient as they expanded. A company may be able to growth at a faster pace as it will be less constrained by large capital expenditure for people or equipment that may take years to amortize, may become outdated for the company over time.


Business Process Outsourcing


Scope of BPO:

  • Airlines
  • Amex
  • Entry of IT Majors

Types of BPO:

  1. Voice Process
  2. Non-voice Process

Voice Process:

It is mainly includes task or job profile which includes voice calls.

There may be types of process under VOICE:

a)      Inbound process:

In this process, the incoming calls are received and the employee has to answer the question or problem asked by caller.

Ex: BSNL, IDEA, RELIANCE Mobile company customer care executive.

b)     Outbound Process:

In this process, the outgoing calls are made by the employee.

Non-Voice Process:

This does not include receiving/answering/making calls to other. This includes Documents/processing on computer.

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Sourabh Bhunje

Sourabh Bhunje, B.E. IT from Pune University. Currently Working at Techliebe. Professional Skills: Programming - Software & Mobile, Web & Graphic Design, Localization, Content Writing, Sub-Titling etc.

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