Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business …
Getting into the Business Process Outsourcing (BPO) trend also means acquiring a third-party company in which the transmission of company services with its associated operational activities and responsibilities will take place. This is yet another business strategy with certain expectations to meet such as providing services with at least a guaranteed equal service level so as to avoid client-customer conflicts. BPO indeed provides definite solutions to companies while promising more efficient organizational designs as a result of productivity growth, cost reduction and innovative competencies.
Currently, BPO is divided into two categories: (a) back-office outsourcing and (b) front-office outsourcing. If back-office outsourcing deals with internal business functions such as payroll and human resources, front-office outsourcing, on the other hand, includes customer-related functions such as tech support through phone, chat or email. These categories are further subdivided into three, namely (a) inshore outsourcing (b) nearshore outsourcing and (c) offshore outsourcing, depending on the BPO location. Inshore outsourcing means that the BPO company contracted is within a company s own country. If the contracted BPO is located on a company s neighboring country, then this is called nearshore outsourcing. Once the BPO company contracted is located outside the company s own country, it is then an offshore outsourcing.
There are also certain risks involved to acquiring BPO services. This is because it is more like transferring all business elements including process management, software and people to a third-party company on behalf of the outsourcer. Risks should be carefully managed to successfully achieve desired benefits. Otherwise, this will only lead to failing of company expectations, therefore business growth and development will be at stake.