BPO Basics

In today’s business environment outsourcing is often not a decision that needs to be justified. In fact some work that is handled internally but could be outsourced can be seriously questioned as a bad business decision.

Business Process Outsourcing refers to the rearrangement of entire business functions to some other service providers, mainly in low cost locations. Most of the companies that are looking to outsource are multinationals, or companies from western countries and most of the BPO units are in countries such as India, China, Malaysia and even Russia. The service provider may be either self-owned or a third party. This relocation or contracting out of business processes to an outside provider is mainly to achieve increased shareholder value. The main motive for business process outsourcing is to allow the company to invest more time, money and human resources into core activities and building strategies, which fuel company growth.

Business process outsourcing helps free up a company’s capital and reduce costs. The operations or processes being outsourced vary from manufacturing to customer service to software development and much more. BPO is distinct from information technology outsourcing, which focuses on hiring a third-party company or service provider to do IT-related activities, such as application management and application development, data center operations, or testing and quality assurance.

Why Outsource?

Business process outsourcing is growing industry because companies want to focus on their core businesses. Companies worldwide feel the need to shed their ancillary processes, free up internal resources to focus on their core business competencies. Business process outsourcing is a strategic management tool that can help organizations to improve process level efficiency and effectiveness, as well as reduce costs.

India Advantage

India's technological advances are noteworthy. Several Fortune 500 companies have opened centers here, to benefit from the technologically skilled, highly educated, motivated workforce. India ranks high in areas such as qualifications, capabilities, quality of work, linguistic capabilities and work ethics, and thus is ahead of competitors such as China, Philippines, Ireland, Australia, Canada etc. Indian companies have unique capabilities and systems to set, measure and monitor quality targets. The abundant skilled manpower has made India a target destination for multinationals to back end their operations in India.

India's advantage as the BPO destination can be summarized as follows: