14 Aug Business Process Outsourcing
What is Business Process Outsourcing?
Business process outsourcing (BPO) is part of outsourcing process in which a company uses certain services from external parties to operate and responsible for certain business process. BPO was originally used by large industry companies in their supply chain process. However, the recent development of BPO has generate broader forms and interpretations. BPO on technology assistance are become more popular nowadays as the impact of digitalization trend among corporates in global level.
There are diverse categorizations of Business process outsourcing that can be grouped by services, functions, BPO companies’ location and so forth. In categorization based on operational function, it can be grouped by two major categories of internal and external aspects of business. The categorization based on BPO companies location consists of two types which are offshore in which the BPO provider is located far away from the parent company and inshore BPO in which the parent company and BPO provider are located in the same area. The categorization based on services are the most complex categorization that covers wide variants of BPO services.
Business Process Outsourcing industry is growing rapidly as almost every company demands more flexible business operation to support the company’s growth. For instances, it is common for the major manufacture companies who use the BPO services from Asia. The trend is also generated from the growing complexity of modern business which requires more non-core competencies to support a company’s core-competencies. This condition results in growing needs for BPO services to handle the non-core competencies aspects of a company.
Furthermore Information and Technology Enable Services (ITES) BPO probably is the most fast growing BPO service recently. The raising trend of ITES BPO cannot be separated with the growth of the use of technology in business and cloud computing which generates higher demands for advance IT support. Despite the IT support’s significance, purchasing the new IT resources and hires more technician to handle the IT issues are less efficient then hire competent ITES BPO services.
What are the Benefit of Business Process Outsourcing?
BPO enhances a company’s flexibility in diverse ways. First, it makes the funds allocations more flexible as a company only needs to hire certain BPO services despite building the whole infrastructure. Second, BPO makes a company has more time and funds to develop its core competencies and leave the non-core or administrative process to the BPO providers. Third, the BPO increases the speed of business process. Fourth, the BPO maintains the growth pace of a company and avoid standard business stagnation.
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