Business Process Outsourcing (BPO)
Business Process Outsourcing, or BPO, is a business practice in which an organization hires another company to do one work (i.e., process), which requires its own business to successfully operate a hiring organization it occurs.
BPO has its roots in the manufacturing industry, with the hiring of other companies to handle specific processes, such as parts of their supply chain, which are not related to the core competencies necessary to make their final products Were.
However, organizations in other industries have adopted this practice over the years. Now, the use of BPO has expanded so much that all types of organizations - profits-for-profit businesses, non-profits, and even government offices and agencies - with BPO service providers in the United States, Northern Take many procedures to make contracts in the US and around the world.
What BPO is used for?
Organizations are involved in business process outsourcing for two main areas of work: back-office functions and front-office functions.
Organizations can outsource a series of back-office tasks (also referred to as internal business functions) including accounting, IT services, human resources (HR), quality assurance (QA) and payment processing.
Similarly, they can outsource various front-office functions, such as customer relationship services, marketing and sales.
In addition to outsourcing a whole functional area (i.e., human resources), organizations can outsource specific tasks (i.e., payroll) in those areas.
Types of BPO
Because the companies around the world provide BPO services to other organizations, BPO can be divided into different types depending on the location of the service provider.
Offshore outsourcing, or just offshoring, occurs when an organization contracts for services provided with a company in a foreign country.
Onshore outsourcing or domestic outsourcing occurs when an organization contracts for services provided by a company that acts as a hiring organization in the same country.
Nearby outsourcing is when an organization contracts the services provided by companies located in neighboring countries.
Business process outsourcing is sometimes also known as information technology-enabled services or ITES - a name that recognizes that IT infrastructure enables outsourcing to happen.
KPO, LPO and RPO
Business process outsourcing is sometimes classified based on the types of services offered. There are three common categories:
Knowledge process outsourcing, or KPO, in which outsourced service providers are not only hired for their ability to do a particular business process or work, but also to provide expertise around it.
Legal process outsourcing, or LPO, is a type of KPO that - as the name suggests - is specific to legal services, from legal research to formulate legal documents and to advise.
Research process outsourcing, or RPO, another type of KPO, refers to research and analysis functions; Biotech companies, investment companies and marketing agencies are the types of organizations that will be involved in the RPO for services.
Benefits of BPO
Organizations are involved in business process outsourcing because they expect to be benefited from the system.
Generally the benefits quoted by supporters of BPO include:
Financial Benefits: Organizations often find that an outsource provider can do a business process at a lower cost, or often find that by contracting with an outsource provider, they can save money as a result of relationships in other ways, such as Tax saving
Flexibility: BPO contracts can allow organizations to accommodate more flexibility, how this meets the outsourced business process, so that they can get a better response to the changing mobility of the changing market.
Competitive Advantage: BPO allows organizations to outsource those processes which are not important for their businesses or missions, allowing organizations to focus more on their resources on their resources, which give them different recognition in the market.
High quality and better performance: Because the main business of BPO providers are displaying specific processes that they are hired to do, they are able to focus in principle on providing those processes at the highest levels. Often, with greater accuracy, efficiency Speed.
Risks of BPO
In addition to expected expectation of profit, organizations engaged in BPO also take potential risks and drawbacks. Those potential problems include:
Security breaches: Organizations should have a technology relationship between themselves and their service providers, which can become another potential point, which can be exploited by bad criminals; Apart from this, organizations often need to share sensitive and / or regulated data with their service providers - another potential security risk.
Unexpected / High Cost: Organizations can reduce their value from work they are outsourcing, either because they underestimate the amount of work or they have the full cost of contract with their providers. . Do not count or estimate.
Challenges of relationships: Organizations can face communication problems with their outsourcing providers, or they may find that there are cultural barriers to a strong business partnership, problems that can disrupt organizations by seeing the full benefits of their BPO contracts .
future directions
The practice of business process outsourcing may be at least partially displaced by technology in the years to come.
Robot Process Automation (RPA) and Artificial Intelligence (AI) Certain business processes can now be outsourced frequently, and these technologies can often do those tasks at low costs and high speeds.
However, not all processes are easily automated; Apart from this, a service provider may be in a better position to use those techniques which are in order to automate their service offerings compared to organizations, so that the BPO provider is looking for the best way to handle business operations. . This helps organizations to maintain your appeal.
Business Process Outsourcing, or BPO, is a business practice in which an organization hires another company to do one work (i.e., process), which requires its own business to successfully operate a hiring organization it occurs.
BPO has its roots in the manufacturing industry, with the hiring of other companies to handle specific processes, such as parts of their supply chain, which are not related to the core competencies necessary to make their final products Were.
However, organizations in other industries have adopted this practice over the years. Now, the use of BPO has expanded so much that all types of organizations - profits-for-profit businesses, non-profits, and even government offices and agencies - with BPO service providers in the United States, Northern Take many procedures to make contracts in the US and around the world.
What BPO is used for?
Organizations are involved in business process outsourcing for two main areas of work: back-office functions and front-office functions.Organizations can outsource a series of back-office tasks (also referred to as internal business functions) including accounting, IT services, human resources (HR), quality assurance (QA) and payment processing.
Similarly, they can outsource various front-office functions, such as customer relationship services, marketing and sales.
In addition to outsourcing a whole functional area (i.e., human resources), organizations can outsource specific tasks (i.e., payroll) in those areas.
Types of BPO
Because the companies around the world provide BPO services to other organizations, BPO can be divided into different types depending on the location of the service provider.
Offshore outsourcing, or just offshoring, occurs when an organization contracts for services provided with a company in a foreign country.
Onshore outsourcing or domestic outsourcing occurs when an organization contracts for services provided by a company that acts as a hiring organization in the same country.
Nearby outsourcing is when an organization contracts the services provided by companies located in neighboring countries.
Business process outsourcing is sometimes also known as information technology-enabled services or ITES - a name that recognizes that IT infrastructure enables outsourcing to happen.
KPO, LPO and RPO
Business process outsourcing is sometimes classified based on the types of services offered. There are three common categories:
Knowledge process outsourcing, or KPO, in which outsourced service providers are not only hired for their ability to do a particular business process or work, but also to provide expertise around it.
Legal process outsourcing, or LPO, is a type of KPO that - as the name suggests - is specific to legal services, from legal research to formulate legal documents and to advise.
Research process outsourcing, or RPO, another type of KPO, refers to research and analysis functions; Biotech companies, investment companies and marketing agencies are the types of organizations that will be involved in the RPO for services.
Benefits of BPO
Organizations are involved in business process outsourcing because they expect to be benefited from the system.
Generally the benefits quoted by supporters of BPO include:
Financial Benefits: Organizations often find that an outsource provider can do a business process at a lower cost, or often find that by contracting with an outsource provider, they can save money as a result of relationships in other ways, such as Tax saving
Flexibility: BPO contracts can allow organizations to accommodate more flexibility, how this meets the outsourced business process, so that they can get a better response to the changing mobility of the changing market.
Competitive Advantage: BPO allows organizations to outsource those processes which are not important for their businesses or missions, allowing organizations to focus more on their resources on their resources, which give them different recognition in the market.
High quality and better performance: Because the main business of BPO providers are displaying specific processes that they are hired to do, they are able to focus in principle on providing those processes at the highest levels. Often, with greater accuracy, efficiency Speed.
Risks of BPO
In addition to expected expectation of profit, organizations engaged in BPO also take potential risks and drawbacks. Those potential problems include:
Security breaches: Organizations should have a technology relationship between themselves and their service providers, which can become another potential point, which can be exploited by bad criminals; Apart from this, organizations often need to share sensitive and / or regulated data with their service providers - another potential security risk.
Unexpected / High Cost: Organizations can reduce their value from work they are outsourcing, either because they underestimate the amount of work or they have the full cost of contract with their providers. . Do not count or estimate.
Challenges of relationships: Organizations can face communication problems with their outsourcing providers, or they may find that there are cultural barriers to a strong business partnership, problems that can disrupt organizations by seeing the full benefits of their BPO contracts .
future directions
The practice of business process outsourcing may be at least partially displaced by technology in the years to come.
Robot Process Automation (RPA) and Artificial Intelligence (AI) Certain business processes can now be outsourced frequently, and these technologies can often do those tasks at low costs and high speeds.
However, not all processes are easily automated; Apart from this, a service provider may be in a better position to use those techniques which are in order to automate their service offerings compared to organizations, so that the BPO provider is looking for the best way to handle business operations. . This helps organizations to maintain your appeal.
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