What is BPO? Business Process Outsourcing or BPO is the process of hiring an outsourcing company to provide services that a company should and could normally do. Before, BPO consists only of payroll services but now it also includes a number of functions such as financial and administration, human resources, customer services and accounting services.

Often, the outsourcing contracts between a company and the partner outsource company involves many years and millions of dollars. What are the basic know-how s for companies? A company before entering into outsourcing arrangements should know some basic knowledge about this. There is a right way to approach BPO.

1. A company should be aware that outsourcing has cycles and each cycle involves strategies. Using Gartner s outsourcing model, four phases are identified. These are sourcing strategy, evaluation and selection, contract development and sourcing management. The company management should ask itself questions on each of this strategy such as the risks and the reasons behind all the actions he has to make.

2. A company must know the duration of the contract.  Usually, BPO contracts last from three to five years. The company must be able to make a balance, making it long enough to produce results and short enough to easily make changes.

3. A company must be able to make identification and assessment of the risks involved in outsourcing. The main idea here is to be able to separate the functions that can be outsourced and those that must remain in-house. There are many processed that can be delegated but there are those that involves much risk such as policymaking and accountability. There are still many issues that a company has to evaluate before entering BPO outsourcing. Being aware of these is the first step. The next step is applying these to your company.

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