Business Process Outsourcing (BPO) is one of the key areas to emerge for many organizations. The opportunity regarding outsourcing has shifted from catering, security and cleaning – activities which tend to be seen as of peripheral interest to an organization – to the more fundamental elements of activities pertaining to the core processes like marketing, distribution, information systems, design and manufacturing.
Basically the complete Value Chain is being targeted for outsourcing to external service providers. With the continuing specialization of certain industries and companies, the possibilities to safely outsource more business critical processes of a company are increasing.
A Business Strategy
Actually, Business Process Outsourcing should be considered a business strategy, as BPO is basically yet another large scale sourcing agreement carefully related to large organizations. It is best seen and interpreted as the contracting of specific business tasks of the outsourcing organization to specialized third-party service providers. Experience already has shown that this is note merely for the bigger players in the market. They may have started applying it, but it was soon picked up by others.
For instance, HR BPO is no longer merely for big multinational organizations. Medium to small size companies are also making use of the BPO opportunity and use this external resource to regain focus. In fact, it has become an important part of every type of business. In many cases, the work is outsourced to specialized companies outside the country of the outsourcing organization. When that takes place, it is referred to as offshore outsourcing.
Information Technology (IT) as Enabler
Business Process Outsourcing is considered to be one of the more effective ways to reach new levels of profitability, productivity, and success. Its effects have turned out to be far reaching many times over. The framework in which BPO operates has been researched substantially during the last decade, and with the advances of Information Technology, it has been able to mature significantly and as such has been able to firmly achieve a wide meaning across all levels of businesses.
Positive results, although not reached without hard labor, have made it a fact that Business Process Outsourcing is not going away soon; it is definitely here to stay. Which is a good sign, as it helps organizations to improve and enhance their capability for service and product innovation. Markets are changing extremely fast these days, and if a company is not able to keep up, they are soon out of business.
This is especially noticeable in the innovative and relatively young Internet Business Arena. Here start ups happen practically every day, possibly giving them an advantage over an existing company that is might be based on an already old techniques. By staying lean and mean, it will be able to quickly shift gears and adapt to the changing market conditions.
A Paradigm Shift To Regain Focus
For companies looking to cut down on their costs, and trying to regain their focus on what is really important for them, their core processes and core business practices, BPO is clearly a huge paradigm shift in the way they can and actually should operate their business model. Not because it is a growing trend which they might ride as well. But because it provides them with the proper means to shift focus.
For these organizations in particular it is important to ignore the rumors that BPO is simply not getting a foot between the door and is not taking off. Because it has already proven to be a successful business model. They should investigate if it can also be applied to their business and how it can help them get in control again, and become competitive again in the market. Because Business Process Outsourcing clearly is one of the – if not the most cost efficient and preferred solution to business currently available.
It is, and most probably will remain for quite a long time a major market strategy which organizations can utilize and exploit to their benefit.