Business Process Outsourcing – The Progression Of Outsourcing Services
The procurement of services from a third party vendor to act upon specific functions for the business is known as Business Process Outsourcing (BPO). We’ve seen the growth of Business Process Outsourcing in countries like India and the Philippines over the past decade. It’s safe to say that the industry really came to prominence thanks to the IT industry.
In the early days, Business Process Outsourcing was a method to get lower labor cost. Manufacturing companies in the US have long been using the services of factories in China and other Asian countries to manufacture toys, clothing, shoes and other goods. It enables the manufacturing companies to save on company expenses like manpower, business structure, and overhead.
A lot has changed in the industry since then. This model has developed fields that can address the needs of other businesses aside from manufacturing. A lot can be said about Business Process Outsourcing with a look on its development in India.
Airline companies first started outsourcing their back office processes to India in the 1980′s. This was soon followed by the IT industry as the country had vast numbers of computer literate people and many of the jobs could be performed from remote locations.
Companies are able to globalize with very little costs due to advanced technology in communication and software. Corporate giants acknowledge it as a tool for strategic development instead of a simple means to decrease labor costs.
Corporate executives who know little about Business Process Outsourcing learned about its advantages through the bandwagon. The Multinationals began to benefit from the rewards of outsourcing business functions in a short period of time. Aside from manufacturing and IT, operational functions in human resources, accounting, finance and front office are also being outsourced.
The growth of business process outsourcing that specialized in customer service like those in the call center business was also observed.
It is almost a cliché now to have telesales people phoning from remote locations and pretending to be culturally aware. Call centers train their employees to have more cultural awareness and even adopt westernized names.
Other sub-segments like knowledge process outsourcing and legal process outsourcing came about with the expansion of business process outsourcing.
Functions that require special skills or field expertise along the lines of animation, content writing, product and research development, content development and others are covered by these subsets. The wide range of services that may be outsourced provide businesses plenty of options to delegate functions which are not within their core competence and focus on what they do best. It is now easy for companies to expand their business anywhere in the globe.