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BPO

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).

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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:

BPO risks include

  • Data privacy breaches
  • Underestimated running costs
  • Overdependence on service providers

Business process outsourcing (BPO) is the contracting of a specific business task, such as payroll, human resources (HR) or accounting, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain their position in the marketplace.

Two categories BPO is often divided into are back office outsourcing, which includes internal business functions such as billing or purchasing, and front office outsourcing, which includes customer-related services such as marketing or tech support.

Back office outsourcing offers organizations services to help manage tasks like data entry, data management, surveys, payment processing, quality assurance and accounting support. Back office tasks are integral to a company's core business process and help keep business running smoothly

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