An Introduction to Business Process Outsourcing (BPO)

• Leveraging of technology or specialist process vendors to provide and manage an organization's critical and/or non-critical enterprise processes and applications.
• The most common examples of BPO are call centers, human resources, accounting and payroll outsourcing.
• BPO or Business process outsourcing may involve the use of off-shore resources.
• BPO means delegating the ownership,administration, and operation of a process to a third party.
• BPO is about solving a business problem.
• BPO aims to raise a client company's shareholder value because it is about delivering outcomes-that is, higher-performing business processes.
• Companies essentially have three kinds of processes: core processes (which give strategic advantage), critical, non-core processes (which are important but are not competitive differentiators), and non-core, non-critical processes (which are needed to make the environment work).

However, outsourcing does not mean handing over an entire process.


• It generally means turning over to a BPO provider the "how" aspects of a process-the systems, infrastructure, administration, execution, and some of the design of non-core processes.
• The company retains the "what" aspects of the process-the governance, policy-setting, decision making, and strategy of these processes.
• The intent is to outsource the execution of a process while retaining the direction-setting part.

• processes that link to suppliers (supply chain management)
• processes that link with customers (sales, marketing, and customer care)
• production processes (R&D, contract manufacturing)
• support processes (finance, HR). Examples of processes now outsourced include human resources, employment, accounting, finance, procurement, travel, the order-to-cash process, cafeterias, payroll, landscaping, real estate, manufacturing, advertising, and on and on-any process that is not core and should improve if managed by a specialist.

Verticals

Business Process Outsourcing

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