BPO - Business Process Outsourcing
BPO - Business Process Outsourcing usually refers to activities and functions that do not fall under the technology category. Specific examples are human resources, accounting, statement preparations, analytics, employee benefits management, and call centers. Typically, these departments are considered support functions of the main business. Traditionally, many companies outsourced these functions to third party specialists in their city or region. Now, it is more likely that these functions are performed in India or elsewhere offshore. As "local" evolves into "global", business process outsourcing becomes more prevalent in today's economy and business community.
Most companies view their sales departments as the most important segments of their businesses. In a way, this is a legitimate philosophy, given that without sales, the company would wither and die. But since sales are the core business, executives and owners often resent having to set up departments for processes such as potential employee screening, maintenance of employee benefits, the actual payroll, and preparation of documents to show banks, investors, and government agencies. Indeed, while payroll and employee benefits are crucial to the operation of the business enterprise, the functions do not make money. They are cost burdens, and as such, do not carry the same weight or influence in the organizations. For this reason, companies will outsource these functions to offshore third party vendors. Actually, accounting functions were regularly outsourced to local individuals and national accounting firms. Small business owners often used the services of local accountants and bookkeepers, while large corporations had whole departments of staff at national firms.
Administrative work is another business process that can be outsourced. Data entry can be long and tedious, and it is expensive to set up offices to house all the clerks for this purpose. By outsourcing, the company can tap into services from offshore vendors who already have staff onsite, doing the same keypunching for other companies. In effect, the costs are greatly reduced, and the company does not have to worry about motivating staff and keeping employees when the job becomes too boring.
Once companies succeed in obtaining new customers, there is then the need for customer maintenance. Some customers invariably require tech support, others require information about their accounts and billing statements, while others want detailed information about upgrades or other services offered by the company. Looking after the customers is clearly a benefit of business process outsourcing. Because third world countries have become hugely competitive in their quests to find valuable work, those countries are now the places to where mainstream businesses look. Further, many up-and-coming offshore countries now have stable internet connections, skilled and educated labor pools, and very eager people who long to have what is considered a prestigious and worthwhile job.
Finally, where information technology and business processes were separate entities within an organization, it now appears as though the two are merging. The advancements in technology are making it more effective and more productive for staff in administrative areas to complete their jobs. As a result, today's clerks tend to be more skilled than their predecessors.