Searching for a more effective way to access cutting-edge technology without the huge capital outlay? Driven by an increasing cost structure in a competitive business? Then business process outsourcing may just be answers.
BPO is the delegation of one or more IT-intensive business processes to an external provider that in turn owns, administers, and manages the selected process based on defined and measurable performance criteria
Once used for cost savings in transaction-intensive, back office business processes, BPO has emerged as a flexible and powerful approach to achieve a wide range of tactical and strategic aims, among others:
- Speed to market. BPO allows start-up firms to be fully operational with state-of-the-art capabilities in weeks rather than months.
- Competitive capabilities. Established organizations can turn also-ran processes into world-class capabilities.
- Cost savings. BPO can dramatically lower costs.
- Growth stimulus. BPO can be used to achieve unique, competitive capabilities.
- Revenue. Firms partner with their BPO provider enhance their knowledge in exchange for shares in the revenues.
BPO, or outsourcing in general, has conventionally been seen as a way of cutting down on overhead expenses. This point of view has changed over time. Now, BPO is seen more and more as a strategic move. Outsourcing enables the company to concentrate on its core functions and delegate noncore activities to a provider that specializes in it. In the case of human resource outsourcing, HR functions such as payroll and benefits, recruitment, and personnel evaluation are passed on to an outsourcer that specializes in human resource management (HRM) and who will keep the company abreast of constant change in the field of HRM.
Frank Casale, president of the Outsourcing Institute, says the real benefit of BPO is in the value it brings that doesn’t necessarily equal cost savings. “Things such as time to market and support may not necessarily show up on a balance sheet, but can be critical to a company’s success.”
In the Philippines, BPO is seen as one of the drivers that would secure the country the position of being top destination of choice for ICT services. Some noncore yet critical backroom operations that have been outsourced to the Philippines include accounting, contact center services, human resource administration, claims administration, and logistics. With its excellent telecommunications infrastructure and its pool of superior talent, the Philippines is at a good position to accommodate these demands.