An overview of business process outsourcing

Type :

Term papers

Pages :

14 pages

Format :

.doc

Published date :

05/26/2009

Category :

Business & market

Sub category :

Business strategy

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Summary :

What is a BPO?
Why outsource?
Back office operations evolution
Types of back office services
1. Administration
2. Finance
3. Human resource
4. Payment services
5. Other transaction processing
Setting up a back office business
Rules for success
Business process outsourcing includes
Advantages and disadvantages of BPO in it industry
1. Business benefits
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
Offshore outsourcing: Implementing change
Offshore outsourcing: Building processes and identifying suitable
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
Bibliography

Abstract

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.