Information Technology Enabled Services
Business process outsourcing (BPO) is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting and customer/call center relations. BPO is also known as Information Technology Enabled Services (ITES). A Business Process Outsourcing (BPO) organisation is responsible for performing a process or a part of a process of another business organisation; outsourcing is done to save on costs or gain in productivity. A call centre performs that part of a client's business which involves handling telephone calls. A call centre, for example, might handle customer complaints coming in over a telephone. BPO categories are front office customer services (such as tech support) and back office business functions (such as billing).
The following are BPO advantages:
- Business process speed and efficiency are enhanced
- Employees may invest more time in core business strategies to bolster competitive advantage and enhance value chain engagement
- Organizational growth increases when capital resource and asset expenditures are not required, which averts problematic investment returns.
- Organizations are not required to invest in unrelated primary business strategy assets, facilitating a shift in focus to specific competencies
The main advantage of any BPO is the way in which it helps increase a company's flexibility. However, several source have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost efficiency, which allowed a certain level of flexibility at the time. Due to technological advances and changes in the industry (specifically the move to more service-based rather than product-based contracts), companies who choose to outsource their back-office increasingly look for time flexibility and direct quality control. Business process outsourcing enhances the flexibility of an organization in different ways: