Business Process Outsourcing

1. Business Process Outsourcing

2. What is Business Process Outsourcing? • 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. Originally, this was associated with manufacturing firms, such as Coca Cola that outsourced large segments of its supply chain. In the contemporary context, it is primarily used to refer to the outsourcing of business processing services to an outside firm, replacing in-house services with labor from an outside firm.

3. Back Office Outsourcing which include internal business function such as: Human Resource Finance Accounting Front Office Outsourcing which include customer related services such as: Contact Center Services BPO is categorized into back office outsourcing, and front office outsourcing

4. BPO- Types • There are three types of BPO. • Offshore Outsourcing • Onshore Outsourcing • Nearshore Outsourcing

5. BPO that is contracted outside a company's country is called offshore outsourcing. • What is offshore outsourcing? is the practice of hiring an external organization to perform some business functions in a country other than the one where the products or services are actually developed or manufactured is the practice of hiring an external organization to perform some business functions in a country other than the one where the products or services are actually developed or manufactured.

6. There are 4 basic types of OFFSHORE OUTSOURCING: • ITO — Information Technology Outsourcing • BPO — Business Process Outsourcing covers things like running call centers, processing insurance claims. • Software R&D — offshore software development • KPO - Knowledge Process Outsourcing covers things that require a higher skill set such as reading X-Rays, performing investment research on stocks and bonds, handling the accounting functions for a business or executing engineering design projects.

7. BPO that is contracted with company's own country is called onshore outsourcing. • What is offshore outsourcing? Onshore outsourcing (also called domestic outsourcing) is the obtaining of services from someone outside a company but within the same country. Also see offshore outsourcing, the obtaining of services from people or companies outside the country.

8. BPO that is contracted to a company's neighboring (or nearby) country is called nearshore outsourcing • What is nearshore outsourcing? Nearshoring is "the transfer of business or IT processes to companies in a nearby country, often sharing a border with your own country", where both parties expect to benefit from one or more of the following dimensions of proximity: geographic, temporal (time zone), cultural, linguistic, economic, political, or historical linkages. The service work that is being sourced may be a business process or software development.

9. There are some sub-segments of business process outsourcing industry. • Knowledge process outsourcing (KPO) is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost.  KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions—typically those that are easily undone if they conflict with higher-level business plans.

10. Legal Process Outsourcing (also known as LPO) refers to the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company. LPO providers have established themselves in Canada, India, the Philippines, the US, Israel and Latin America. They traditionally offer services in the areas of document review, legal research and writing, drafting of pleadings and briefs, and patent services outsourcing.

11. Why BPO is gaining ground? Few of the motivation factors are: • Factor Cost Advantage • Economy of Scale • Business Risk Mitigation • Superior Competency • Utilization Improvement

12. Different Types of services being offered by BPO • Customer Support Services • Technical Support Services • Telemarketing Services • Employee IT Help-desk Services • Insurance Processing • Policy Maintenance/ Management: • Data Entry Services/Data Processing Services • Scanning, OCR with Editing & Indexing Services • Internet/ Online/ Web Research

13. Advantages of BPO • Cost reductions- Cost reduction is done through process improvements, reengineering and use of technologies that reduce and bring administrative and other costs under control. • Concentration on core business- With the day-to-day back office operations taken care of, the management is free to concentrate more on the core business of the company. • Outside expertise- Company is saved from the hassles of recruiting and training personnel. BPOs ensure that experts from another company provide the needed guidance and skills. • Cater to changing customer demands- It is another great advantage of out sourcing the business processes. Many BPOs provide the management with flexible and scalable services to meet the customers' changing requirements, and to support company acquisitions, consolidations, and joint ventures. • Revenue increase- As stated above, by outsourcing non-core processes, companies can concentrate on increasing their sales and market share, develop new products; spread out into new markets and increase customer service and satisfaction

14. Disadvantages of BPO • Odd working hours • Health issues • Abusive clients • Age factor • Social issues/ alcohol consumption/sex • Future trend of call center jobs

15. Prefer BPO… Did not get a better job Find nothing better to do Education level doesn’t matter Good work environment Good Benefits Flexibility of time Attractive life style Transport facility Leave BPO… No growth opportunity/ lack of promotion For higher Salary For Higher education Misguidance by the company Policies and procedures are not conducive Physical strains Uneasy relationship with pears or managers Why people