Business Process Outsourcing (BPO) - Revision history

User at 21:21, 5 January 2023

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2022-11-21T17:19:20Z

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2020-04-19T17:29:02Z

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2020-04-15T19:14:53Z

User: Business process outsourcing (BPO) is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting and customer/call center relations.

2018-12-29T00:26:08Z

Business process outsourcing (BPO) is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting and customer/call center relations.

User: Business process outsourcing (BPO) is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting and customer/call center relations.

2018-12-10T18:26:26Z

← Older revision		Revision as of 21:21, 5 January 2023
Line 13:		Line 13:

	===See Also===		===See Also===
		+	*[[Outsourcing]]
	*[[IT Cost Optimization]]		*[[IT Cost Optimization]]

@@ Line 1: / Line 1: @@
-'''[[Business]] [[process]] outsourcing (BPO)''' is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting, and [[customer]]/call center relations. BPO is also known as Information Technology Enabled Services (ITES).<ref>[https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo What is Business Process Outsourcing?-Techopedia]</ref>
+'''Business process outsourcing (BPO)''' is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting, and customer/call center relations. BPO is also known as Information Technology Enabled Services (ITES).<ref>[https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo What is Business Process Outsourcing?-Techopedia]</ref>
 '''Benefits and Limitations of Business Process Outsourcing'''<ref>[https://en.wikipedia.org/wiki/Business_process_outsourcing Business Process Outsourcing:Benefits and Limitations -Wikipedia]</ref><br />
-The main advantage of any BPO is the way in which it helps increase a company's flexibility. However, several sources have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost [[efficiency]], which allowed a certain level of flexibility at the time. Due to technological advances and changes in the [[industry]] (specifically the move to more [[service]]-based rather than [[product]]-based contracts), companies who choose to outsource their back-office increasingly look for time flexibility and direct [[quality]] [[control]]. Business process outsourcing enhances the flexibility of an [[organization]] in different ways:
+The main advantage of any BPO is the way in which it helps increase a company's flexibility. However, several sources have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost efficiency, which allowed a certain level of flexibility at the time. Due to technological advances and changes in the industry (specifically the move to more service-based rather than product-based contracts), companies who choose to outsource their back-office increasingly look for time flexibility and direct quality control. Business process outsourcing enhances the flexibility of an organization in different ways:
-*Most services provided by BPO vendors are offered on a fee-for-service basis, using business models such as Remote In-Sourcing or similar [[software]] development and outsourcing models. This can help a company to become more flexible by transforming fixed into variable costs. A variable cost structure helps a company respond to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible.
+*Most services provided by BPO vendors are offered on a fee-for-service basis, using business models such as Remote In-Sourcing or similar software development and outsourcing models. This can help a company to become more flexible by transforming fixed into variable costs. A variable cost structure helps a company respond to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible.
-*Another way in which BPO contributes to a company’s flexibility is that a company is able to focus on its core competencies, without being burdened by the demands of bureaucratic restraints. Key employees are herewith released from performing non-core or administrative processes and can invest more time and energy in building the firm’s core businesses. The key lies in knowing which of the main [[value]] drivers to focus on – customer intimacy, product [[leadership]], or operational excellence. Focusing more on one of these drivers may help a company create a competitive edge.
+*Another way in which BPO contributes to a company’s flexibility is that a company is able to focus on its core competencies, without being burdened by the demands of bureaucratic restraints. Key employees are herewith released from performing non-core or administrative processes and can invest more time and energy in building the firm’s core businesses. The key lies in knowing which of the main value drivers to focus on – customer intimacy, product leadership, or operational excellence. Focusing more on one of these drivers may help a company create a competitive edge.
-*A third way in which BPO increases organizational flexibility is by increasing the speed of [[Business Process|business processes]]. [[Supply Chain Management (SCM)]] with the effective use of [[supply chain]] partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a [[manufacturing]] company.
+*A third way in which BPO increases organizational flexibility is by increasing the speed of Business Process|business processes. Supply Chain Management (SCM) with the effective use of supply chain partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a manufacturing company.
-*Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth [[goals]] while avoiding [[standard]] business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.
+*Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth goals while avoiding standard business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.
-A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time. Although the above-mentioned arguments favor the view that BPO increases the flexibility of organizations, [[management]] needs to be careful with the implementation of it as there are issues, which work against these advantages. Among problems, which arise in practice are A failure to meet service levels, unclear contractual issues, changing requirements, and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing. A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality [[Improvement]] approaches.
+A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time. Although the above-mentioned arguments favor the view that BPO increases the flexibility of organizations, management needs to be careful with the implementation of it as there are issues, which work against these advantages. Among problems, which arise in practice are A failure to meet service levels, unclear contractual issues, changing requirements, and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing. A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality Improvement approaches.
 ===See Also===
-*[[IT_Sourcing_(Information_Technology_Sourcing)|IT Sourcing]]
+*[[IT Cost Optimization]]

@@ Line 7: / Line 7: @@
 *Another way in which BPO contributes to a company’s flexibility is that a company is able to focus on its core competencies, without being burdened by the demands of bureaucratic restraints. Key employees are herewith released from performing non-core or administrative processes and can invest more time and energy in building the firm’s core businesses. The key lies in knowing which of the main [[value]] drivers to focus on – customer intimacy, product [[leadership]], or operational excellence. Focusing more on one of these drivers may help a company create a competitive edge.
 *A third way in which BPO increases organizational flexibility is by increasing the speed of [[Business Process|business processes]]. [[Supply Chain Management (SCM)]] with the effective use of [[supply chain]] partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a [[manufacturing]] company.
-*Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth [[goals]] while avoiding [[standard]] business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and [[agility]], which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.
+*Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth [[goals]] while avoiding [[standard]] business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.
 A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time. Although the above-mentioned arguments favor the view that BPO increases the flexibility of organizations, [[management]] needs to be careful with the implementation of it as there are issues, which work against these advantages. Among problems, which arise in practice are A failure to meet service levels, unclear contractual issues, changing requirements, and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing. A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality [[Improvement]] approaches.

@@ Line 1: / Line 1: @@
-'''[[Business]] [[process]] outsourcing (BPO)''' is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting, and [[customer]]/call center relations. BPO is also known as[[Information Technology Enabled Services (ITeS)| Information Technology Enabled Services (ITES)]].<ref>What is Business Process Outsourcing? [https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo Techopedia]</ref>
+'''[[Business]] [[process]] outsourcing (BPO)''' is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting, and [[customer]]/call center relations. BPO is also known as Information Technology Enabled Services (ITES).<ref>[https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo What is Business Process Outsourcing?-Techopedia]</ref>
-'''Benefits and Limitations of Business Process Outsourcing'''<ref>Business Process Outsourcing:Benefits and Limitations [https://en.wikipedia.org/wiki/Business_process_outsourcing Wikipedia]</ref><br />
+'''Benefits and Limitations of Business Process Outsourcing'''<ref>[https://en.wikipedia.org/wiki/Business_process_outsourcing Business Process Outsourcing:Benefits and Limitations -Wikipedia]</ref><br />
 The main advantage of any BPO is the way in which it helps increase a company's flexibility. However, several sources have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost [[efficiency]], which allowed a certain level of flexibility at the time. Due to technological advances and changes in the [[industry]] (specifically the move to more [[service]]-based rather than [[product]]-based contracts), companies who choose to outsource their back-office increasingly look for time flexibility and direct [[quality]] [[control]]. Business process outsourcing enhances the flexibility of an [[organization]] in different ways:
 *Most services provided by BPO vendors are offered on a fee-for-service basis, using business models such as Remote In-Sourcing or similar [[software]] development and outsourcing models. This can help a company to become more flexible by transforming fixed into variable costs. A variable cost structure helps a company respond to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible.

@@ Line 1: / Line 1: @@
-'''[[Business]] [[process]] [[outsourcing]] (BPO)''' is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), [[accounting]] and [[customer]]/call center relations. BPO is also known as[[Information Technology Enabled Services (ITeS)| Information Technology Enabled Services (ITES)]].<ref>What is Business Process Outsourcing? [https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo Techopedia]</ref>
+'''[[Business]] [[process]] outsourcing (BPO)''' is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting, and [[customer]]/call center relations. BPO is also known as[[Information Technology Enabled Services (ITeS)| Information Technology Enabled Services (ITES)]].<ref>What is Business Process Outsourcing? [https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo Techopedia]</ref>
 '''Benefits and Limitations of Business Process Outsourcing'''<ref>Business Process Outsourcing:Benefits and Limitations [https://en.wikipedia.org/wiki/Business_process_outsourcing Wikipedia]</ref><br />
 The main advantage of any BPO is the way in which it helps increase a company's flexibility. However, several sources have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost [[efficiency]], which allowed a certain level of flexibility at the time. Due to technological advances and changes in the [[industry]] (specifically the move to more [[service]]-based rather than [[product]]-based contracts), companies who choose to outsource their back-office increasingly look for time flexibility and direct [[quality]] [[control]]. Business process outsourcing enhances the flexibility of an [[organization]] in different ways:
-*Most services provided by BPO vendors are offered on a fee-for-service basis, using business models such as Remote In-Sourcing or similar [[software]] development and outsourcing models. This can help a company to become more flexible by transforming fixed into variable costs. A variable cost structure helps a company responding to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible.
+*Most services provided by BPO vendors are offered on a fee-for-service basis, using business models such as Remote In-Sourcing or similar [[software]] development and outsourcing models. This can help a company to become more flexible by transforming fixed into variable costs. A variable cost structure helps a company respond to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible.
 *Another way in which BPO contributes to a company’s flexibility is that a company is able to focus on its core competencies, without being burdened by the demands of bureaucratic restraints. Key employees are herewith released from performing non-core or administrative processes and can invest more time and energy in building the firm’s core businesses. The key lies in knowing which of the main [[value]] drivers to focus on – customer intimacy, product [[leadership]], or operational excellence. Focusing more on one of these drivers may help a company create a competitive edge.
-*A third way in which BPO increases organizational flexibility is by increasing the speed of [[Business Process|business processes]]. [[Supply Chain Management (SCM)|Supply chain managemen]]t with the effective use of [[Supply Chain|supply chain]] partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a [[manufacturing]] company.
+*A third way in which BPO increases organizational flexibility is by increasing the speed of [[Business Process|business processes]]. [[Supply Chain Management (SCM)]] with the effective use of [[supply chain]] partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a [[manufacturing]] company.
-*Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth [[goals]] while avoiding [[standard]] business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and [[Agility|agility]], which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.
+*Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth [[goals]] while avoiding [[standard]] business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and [[agility]], which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.
-A company may be able to grow at a faster pace as it will be less constrained by large [[capital]] expenditures for people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time. Although the above-mentioned arguments favour the view that BPO increases the flexibility of [[Organization|organizations]], [[management]] needs to be careful with the implementation of it as there are issues, which work against these advantages. Among problems, which arise in practice are: A failure to meet service levels, unclear contractual issues, changing requirements and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing. A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality [[Improvement]] approaches.
+A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time. Although the above-mentioned arguments favor the view that BPO increases the flexibility of organizations, [[management]] needs to be careful with the implementation of it as there are issues, which work against these advantages. Among problems, which arise in practice are A failure to meet service levels, unclear contractual issues, changing requirements, and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing. A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality [[Improvement]] approaches.
 ===See Also===
-[[Business Process]]<br />
+*[[IT_Sourcing_(Information_Technology_Sourcing)|IT Sourcing]]
-[[Outsourcing|Outourcing]]<br />
+*[[Business Process Architecture]]
-[[IT_Sourcing_(Information_Technology_Sourcing)|IT Sourcing]]<br />
+*[[Business Process Engine (BPE)]]
-[[Business_Process_Offshoring_(BPO)|Business Process Offshoring]]<br />
+*[[Business Process Engineering (BPE)]]
-[[Vendor_Relationship_Management_(VRM)|Vendor Relationship Management]]<br />
+*[[Business Process Reengineering (BPR)]]
-[[Business Process Architecture]]<br />
+*[[Business Process Integration]]
-[[Business Process Engine (BPE)]]<br />
+*[[Business Process Improvement (BPI)]]

@@ Line 1: / Line 1: @@
-Business process outsourcing (BPO) is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting and customer/call center relations. BPO is also known as[[Information Technology Enabled Services (ITeS)| Information Technology Enabled Services (ITES)]].<ref>What is Business Process Outsourcing? [https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo Techopedia]</ref>
+'''Business process outsourcing (BPO)''' is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting and customer/call center relations. BPO is also known as[[Information Technology Enabled Services (ITeS)| Information Technology Enabled Services (ITES)]].<ref>What is Business Process Outsourcing? [https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo Techopedia]</ref>
 '''Benefits and Limitations of Business Process Outsourcing'''<ref>Business Process Outsourcing:Benefits and Limitations [https://en.wikipedia.org/wiki/Business_process_outsourcing Wikipedia]</ref><br />
-The main advantage of any BPO is the way in which it helps increase a company's flexibility. However, several sources[which?] have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost efficiency, which allowed a certain level of flexibility at the time. Due to technological advances and changes in the industry (specifically the move to more service-based rather than product-based contracts), companies who choose to outsource their back-office increasingly look for time flexibility and direct quality control. Business process outsourcing enhances the flexibility of an organization in different ways:
+The main advantage of any BPO is the way in which it helps increase a company's flexibility. However, several sources have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost efficiency, which allowed a certain level of flexibility at the time. Due to technological advances and changes in the industry (specifically the move to more service-based rather than product-based contracts), companies who choose to outsource their back-office increasingly look for time flexibility and direct quality control. Business process outsourcing enhances the flexibility of an organization in different ways:
-*Most services provided by BPO vendors are offered on a fee-for-service basis, using business models such as Remote In-Sourcing or similar software development and outsourcing models.This can help a company to become more flexible by transforming fixed into variable costs. A variable cost structure helps a company responding to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible.
+*Most services provided by BPO vendors are offered on a fee-for-service basis, using business models such as Remote In-Sourcing or similar software development and outsourcing models. This can help a company to become more flexible by transforming fixed into variable costs. A variable cost structure helps a company responding to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible.
 *Another way in which BPO contributes to a company’s flexibility is that a company is able to focus on its core competencies, without being burdened by the demands of bureaucratic restraints. Key employees are herewith released from performing non-core or administrative processes and can invest more time and energy in building the firm’s core businesses. The key lies in knowing which of the main value drivers to focus on – customer intimacy, product leadership, or operational excellence. Focusing more on one of these drivers may help a company create a competitive edge.
-*A third way in which BPO increases organizational flexibility is by increasing the speed of business processes. Supply chain management with the effective use of supply chain partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a manufacturing company.
+*A third way in which BPO increases organizational flexibility is by increasing the speed of [[Business Process|business processes]]. [[Supply Chain Management (SCM)|Supply chain managemen]]t with the effective use of [[Supply Chain|supply chain]] partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a manufacturing company.
-*Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth goals while avoiding standard business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.
+*Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth goals while avoiding standard business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and [[Agility|agility]], which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.
-A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time. Although the above-mentioned arguments favour the view that BPO increases the flexibility of organizations, management needs to be careful with the implementation of it as there are issues, which work against these advantages. Among problems, which arise in practice are: A failure to meet service levels, unclear contractual issues, changing requirements and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing. A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality Improvement approaches.
+A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time. Although the above-mentioned arguments favour the view that BPO increases the flexibility of [[Organization|organizations]], management needs to be careful with the implementation of it as there are issues, which work against these advantages. Among problems, which arise in practice are: A failure to meet service levels, unclear contractual issues, changing requirements and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing. A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality Improvement approaches.
@@ Line 16: / Line 16: @@
 [[IT_Sourcing_(Information_Technology_Sourcing)|IT Sourcing]]<br />
 [[Business_Process_Offshoring_(BPO)|Business Process Offshoring]]<br />
-[[Vendor_Relationship_Management_(VRM)|Vendor Relationship Management]]
+[[Vendor_Relationship_Management_(VRM)|Vendor Relationship Management]]<br />

← Older revision		Revision as of 00:26, 29 December 2018
Line 1:		Line 1:
−	Business process outsourcing (BPO) is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting and customer/call center relations. BPO is also known as[[~~Information_Technology_Enabled_Services_~~(~~ITES~~)\| Information Technology Enabled Services (ITES)]].<ref>What is Business Process Outsourcing? [https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo Techopedia]</ref>	+	Business process outsourcing (BPO) is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting and customer/call center relations. BPO is also known as[[Information Technology Enabled Services (ITeS)\| Information Technology Enabled Services (ITES)]].<ref>What is Business Process Outsourcing? [https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo Techopedia]</ref>

← Older revision		Revision as of 18:26, 10 December 2018
Line 1:		Line 1:
−	'''~~Content Coming Soon~~'''	+	Business process outsourcing (BPO) is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting and customer/call center relations. BPO is also known as[[Information_Technology_Enabled_Services_(ITES)\| Information Technology Enabled Services (ITES)]].<ref>What is Business Process Outsourcing? [https://www.techopedia.com/definition/13776/business-process-outsourcing-bpo Techopedia]</ref>
		+
		+
		+	'''Benefits and Limitations of Business Process Outsourcing'''<ref>Business Process Outsourcing:Benefits and Limitations [https://en.wikipedia.org/wiki/Business_process_outsourcing Wikipedia]</ref><br />
		+	The main advantage of any BPO is the way in which it helps increase a company's flexibility. However, several sources[which?] have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost efficiency, which allowed a certain level of flexibility at the time. Due to technological advances and changes in the industry (specifically the move to more service-based rather than product-based contracts), companies who choose to outsource their back-office increasingly look for time flexibility and direct quality control. Business process outsourcing enhances the flexibility of an organization in different ways:
		+	*Most services provided by BPO vendors are offered on a fee-for-service basis, using business models such as Remote In-Sourcing or similar software development and outsourcing models.This can help a company to become more flexible by transforming fixed into variable costs. A variable cost structure helps a company responding to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible.
		+	*Another way in which BPO contributes to a company’s flexibility is that a company is able to focus on its core competencies, without being burdened by the demands of bureaucratic restraints. Key employees are herewith released from performing non-core or administrative processes and can invest more time and energy in building the firm’s core businesses. The key lies in knowing which of the main value drivers to focus on – customer intimacy, product leadership, or operational excellence. Focusing more on one of these drivers may help a company create a competitive edge.
		+	*A third way in which BPO increases organizational flexibility is by increasing the speed of business processes. Supply chain management with the effective use of supply chain partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a manufacturing company.
		+	*Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth goals while avoiding standard business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.
		+
		+	A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time. Although the above-mentioned arguments favour the view that BPO increases the flexibility of organizations, management needs to be careful with the implementation of it as there are issues, which work against these advantages. Among problems, which arise in practice are: A failure to meet service levels, unclear contractual issues, changing requirements and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing. A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality Improvement approaches.
		+
		+
		+	===See Also===
		+	[[Outsourcing\|Outourcing]]<br />
		+	[[IT_Sourcing_(Information_Technology_Sourcing)\|IT Sourcing]]<br />
		+	[[Business_Process_Offshoring_(BPO)\|Business Process Offshoring]]<br />
		+	[[Vendor_Relationship_Management_(VRM)\|Vendor Relationship Management]]
		+
		+
		+
		+	===References===
		+	<references />
		+
		+
		+	===Further Reading===
		+	*Getting A Piece Of Business Process Outsourcing [http://www.forbes.com/sites/greatspeculations/2015/06/22/getting-a-piece-of-business-process-outsourcing/#2d04af106f90 Forbes]
		+	*How technology is changing BPO [http://www.computerweekly.com/feature/How-technology-is-changing-BPO Computer Weekly]
		+	*10 outsourcing trends to watch in 2016 [http://www.cio.com/article/3018638/outsourcing/10-outsourcing-trends-to-watch-in-2016.html cio.com]