Posted by Business process outsourcing (BPO) is the corporate practice of hiring an outside firm to carry out specific business activities. This article informs the reader about the different types of BPO services available in the industry.
Business Process Outsourcing (BPO) is basically a change in the business model. It involves contracting with a global service company to perform certain business tasks. Outsourcing companies are frequently employed as a cost-saving measure for businesses. In general, an organization needs to outsource to an external service provider in order to make business operations efficient, yet it is not part of the company’s core operations.
In the beginning of outsourcing, outsourcing tasks were limited (eg, payroll, human resources, accounting). With the progression of time, business process outsourcing services have grown to include additional business value solutions such as legal services, healthcare, insurance, telecom, utilities, energy and many more.
BPO can be classified into two categories: shared back office and shared front office operations. Back office outsourcing includes internal business functions, such as finance and accounting. Front office outsourcing includes technical support, marketing, and customer-related services. Organizations also outsource healthcare, insurance, shipping, and logistics operations.
Outsourcing can be classified into three categories based on the location of the outsourcing company (related to the company’s primary place of business). The three categories include: offshore, nearshore, and onshore outsourcing.
Offshore outsourcing is the contracting of business functions to a company located in another country. Many companies around the world continue to use outsourcing to reduce overhead, access the innovations and developments of more specialized suppliers, and to make internal operation more efficient.
An outsourcing job to a neighboring country, which often shares borders, is like outsourcing close to shore. This is often preferred because of the closeness in geographic location and the similarity of culture and similar time zones. For example, companies in the United States often outsource close to shore to neighboring countries such as Canada and Mexico.
In-house outsourcing (also called on-premises outsourcing) is the contracting out of business responsibilities with another organization located within the same country. This option can be used for strategic reasons, including when highly specialized expertise is required that cannot be found elsewhere. Local proximity to outsourcing also facilitates personal contact with contractors.
Regardless of the rating, business to business solutions and services continue to increase, and the sky’s the limit. Driven by marketing and operations performance, business managers strive to meet global productivity standards while minimizing costs. This results in more and more companies using outsourcing and business process strategy to use global services and increase business performance.
The smartest companies have seized this great opportunity and made it work Global business process outsourcing part of their business strategy. If you want to take part in this momentum of change and are looking for alternatives to implement in your business, contact a global service company for more information.