The Business Process of Outsourcing BPO & Information Technology

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.

Intertwined-IT& BPO

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
• Logistics
• Manufacturing
• Recruitment
• 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
• Cloudsourcing
• 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.

The Benefits of Outsourcing IT Services

The core competencies of your organization being different, you find yourself in a dilemma as to how you can complete or even take up a client's work. The lure of the volume of money that can be churned by accepting that particular business puts you in a need to perform an unrelated function.

However, there are companies that are highly qualified in this area and charge you for doing your work. Business process outsourcing (BPO) is born at this moment. Outsourcing a part of your business activity to another company that specializes in that area releases you from the burden of this task as well as it contributes to cutting of cost and time. If you were to enter an area where you do not have the right knowledge or resource, it is very likely that you will waste time and money.

Information Technology (IT) has taken giant leaps in the last two decades and is at an all time high. With the advancement has come the need to have more man power to accomplish the IT related tasks. This has proved to be a Herculean task to some of the advanced countries where such resource is scarce. Here was an opportunity for the lesser developed countries that jumped in to the IT related services field and offered services at dirt cheap prices.

It certainly makes sense to outsource IT services as these offer a spectrum of services. Once you outsource IT services you can free your resources and allow them to complete their core areas with efficiency.

Some of the benefits of outsourcing IT services:

• Cost effective and reduce overhead expenses
• Concentration on core business
• Internal recruitment for specialized personnel is no longer there
• Speed up your work by eliminating redundancy in structure
• Save on recruting new employees
• Training for the new services is not required
• Improve on client satisfaction by completing on time
• Provide reliable, accurate and value based services
• Get knowledge of the best services and practices in the domain
• Establish a strong relationship with the client
• Increase an overall efficiency

All the above benefits being similar to all outsourcing companies, companies can largely benefit from outsourcing IT services to offshore as there is a time zone difference and this would help in completing critical work quickly. For example outsourcing from US to India would mean, work during day when it is night in the US and that the work given today would be taken up immediately. Speed and efficiency spell success and accomplishment to your business and overall growth.