Business Process Outsourcing in the 21st Century
Business Process Outsourcing
Morris Kamau N Introduction Business process outsourcing (B.P.O) is a subset of Outsourcing that involves the contracting of the operations and responsibilities of specific business functions (or processes) to a third-party service provider (Tas, J. & Sunder, S. 2004) it can also be simply described as the contracting of a specific business task to a third-party service provider.
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This process starts when a company on its verge of expansion to the global markets in other countries regardless of its nature as onshore (countries within the same continent) or offshore (countries not within the borders of a continent). There is a structured arrangement, usually between an organization and an outsourcing partner to perform certain services, otherwise conducted in-house in the mother company. The provider of the outsourced services takes primary responsibility of ensuring the process works and delivers the required results as expected by the organization. Thus Business Process Outsourcing represents a new paradigm for international trade in service delivery. (L M L. and Meyers,1998). This effective global business pivoting system is a love child born in an age where business companies grappled with how to exploit their competitive advantages for global market and the subsequent question that was the rallying cry of diversification to broaden corporate bases and take advantage of economies of scale, thus its birth. This platform overtime provided for a lot of outright advantages but this was not always the case, during its teething stages as in the 1950s and 1960s, this system was handicapped by a lack of agility that resulted from bloated management structures (Robert Handfield, 2006) Sanity eventually returned to the system in the late 1980s and not until 1989 was it recognized as a business strategy, ushering in a new age of business process outsourcing and some of the early birds to take advantage were American express and British Airways in the largest markets of India. What was initially low-end work such as data entry and call centre activity outsourced to the country grew to value added work such as processing of accounts and other non-core functions due to the increased confidence of the companies. Today with its growth in flexibility, and multi billion global companies having adopted it for years, the two Business process outsourcing giants(India and Philippines) have revolutionized the strategy, In 2010, …show more content…
Business Process Outsourcing has opened a platform for Reduction and control in operating costs. Any good B.P.O is highly equipped with well trained professional human resources as well as good infrastructure (Robert Handfield, 2006)
It also has helped Improve host company focus, thus increasing productivity and growth of a company
It also helps a company Gain access to world-class capabilities, as the flexibility provided helps the company provide the same quality as its mother company Business process outsourcing performs a critical role in supporting the evolving business models of global companies and also boosting growth, expanding in emerging markets, and improving supply chain effectiveness are top business priorities (Forbes Insight, 2009)
BPO allows for flexibility in that can be seen when a company can maintain growth goals while avoiding standard business bottlenecks that would have otherwise been experienced without bpo therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded. (Leavy, 2005)
Business Process Outsourcing
Morris Kamau N Introduction Business process outsourcing (B.P.O) is a subset of Outsourcing that involves the contracting of the operations and responsibilities of specific business functions (or processes) to a third-party service provider (Tas, J. & Sunder, S. 2004) it can also be simply described as the contracting of a specific business task to a third-party service provider.
Body
This process starts when a company on its verge of expansion to the global markets in other countries regardless of its nature as onshore (countries within the same continent) or offshore (countries not within the borders of a continent). There is a structured arrangement, usually between an organization and an outsourcing partner to perform certain services, otherwise conducted in-house in the mother company. The provider of the outsourced services takes primary responsibility of ensuring the process works and delivers the required results as expected by the organization. Thus Business Process Outsourcing represents a new paradigm for international trade in service delivery. (L M L. and Meyers,1998). This effective global business pivoting system is a love child born in an age where business companies grappled with how to exploit their competitive advantages for global market and the subsequent question that was the rallying cry of diversification to broaden corporate bases and take advantage of economies of scale, thus its birth. This platform overtime provided for a lot of outright advantages but this was not always the case, during its teething stages as in the 1950s and 1960s, this system was handicapped by a lack of agility that resulted from bloated management structures (Robert Handfield, 2006) Sanity eventually returned to the system in the late 1980s and not until 1989 was it recognized as a business strategy, ushering in a new age of business process outsourcing and some of the early birds to take advantage were American express and British Airways in the largest markets of India. What was initially low-end work such as data entry and call centre activity outsourced to the country grew to value added work such as processing of accounts and other non-core functions due to the increased confidence of the companies. Today with its growth in flexibility, and multi billion global companies having adopted it for years, the two Business process outsourcing giants(India and Philippines) have revolutionized the strategy, In 2010, …show more content…
Business Process Outsourcing has opened a platform for Reduction and control in operating costs. Any good B.P.O is highly equipped with well trained professional human resources as well as good infrastructure (Robert Handfield, 2006)
It also has helped Improve host company focus, thus increasing productivity and growth of a company
It also helps a company Gain access to world-class capabilities, as the flexibility provided helps the company provide the same quality as its mother company Business process outsourcing performs a critical role in supporting the evolving business models of global companies and also boosting growth, expanding in emerging markets, and improving supply chain effectiveness are top business priorities (Forbes Insight, 2009)
BPO allows for flexibility in that can be seen when a company can maintain growth goals while avoiding standard business bottlenecks that would have otherwise been experienced without bpo therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded. (Leavy, 2005)