Business Process Outsourcing (BPO) is neither a technology nor a technology system. Business Process Outsourcing is actually a business strategy.
BPO or Business Process Outsourcing and IT or Information Technology seldom require any introduction these days. They are quite distinct from each other. While the former concentrates on using an external provider to perform specific processes on the behalf of a company, the latter is an entire industry which uses computer and software to manage information.
The surge in IT spending across markets, both emerging and rooted led to the collaboration of the Information Technology and Business Process Outsourcing sectors. Particularly in the last decade new business models and first time buyers were encouraged and the value-propositions for the existing ones were re-invented.
The two types of outsourcing are information technology (IT) outsourcing and business process outsourcing (BPO). Both types rely heavily on the application of information technology to facilitate interactions among a company and its outsourcing partners.
BPO focuses on hiring a third-party company or service provider to do IT-related activities. These activities include:
- Application management and application development
- Data center operations/testing
- Quality assurance
In the early days, BPO usually consisted of outsourcing processes such as payroll. Then it grew to include employee benefits management. Now it encompasses a number of functions that are considered “non-core” to the primary business strategy.
What embarked off in the 1970′s when companies outsourced a few services like payroll and/or maintenance came about in the ensuing decades as a strategic management issue especially for Business Process Outsourcing. A savvy and skilled organization can help define the outlay, provide the prerequisite expertise and accomplish the chore cost effectively in time.
Most of the avant-garde businesses rely on information systems from an employee e-mail, database management, to development and maintenance of applications, and network security. Even a rookie start up would need an order-tracking system, and Business Process Outsourcing could fairly serve the purpose. Also, one of the most positive attributes of outsourcing is cost-reduction(by converting fixed costs to variable costs). Flexible decision making and innovation back it up, as a good alliance takes shape among the client and a vendor and ergo serves as a one-stop terrain for technological, operational and decisive assistance.
With the advent of Information Technology solution options, in the Business Process Outsourcing and the solution design process, the most crucial facets are seen as a flexibility to adapt to buyer process specifications like cost-efficiency.
The most commonly outsourced businesses include:
- Content Development
- IT outsourcing
- Legal outsourcing
- Technical/Customer Support
- Web Design and Maintenance
Business Process Outsourcing enhances the flexibility of an organization in different ways.
Some of the key inclinations aimed at driving efficiencies in the Information Technology and Business Process outsourcing sector are as the following:
- Progressive Outsourcing
- The end of Customization
- A rise in global technology outpaced by global sourcing growth
- An enhanced value proposition
A long term vision of how these trends bring about fundamental alterations in correlating both Information Technology and Business Process Outsourcing would bring about an abundance of efficiency to the way services are delivered.