Outsourcing in business is the contracting out of a business process to another party (Outsourcing essentially implies the transfer of non-core services to a third party who specialize in providing such services). Outsourcing could sometimes involves transferring employees and assets from one firm to another, outsourcing is also used to describe the practice of handing over control of public services out to for-profit corporations. So, what exactly does a business process outsourcing company do?
Business Process Outsourcing Company can handle both foreign and domestic contracting, and sometimes includes offshoring or relocating a business function to another country. The opposite of outsourcing is Insourcing.
Types Of outsourcing
1. Professional Outsourcing: It is the most common of the types of outsourcing, many companies benefit greatly from this arrangement and reduce cost associated with employing professional personnel. They outsource their professional activities to third-party and pay exactly for the service they get. The outsourcing include: Accounting, Legal, purchasing, Information Technology support and other specialized services. This substantially reduces the organization’s overhead costs.
2. Manufacturing Outsourcing: Manufacturer outsourcing services usually are quite industry-specific. A typical example is when a manufacturing companies outsource the manufacturing of parts or components of their products to other manufacturing companies that specialize in the production of such components. Companies that couple automobiles can be placed in this category. This will reduce cost and assembling time. The primary risks with this type of arrangement are related to interruption of the production line and quality issues.
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3. Process-specific Outsourcing: In the service industry, it is quite common to outsource specific aspects of the operation to other companies that specialize in that service. For example, a bakery can outsource the delivery of the final product to a courier company. This type of service arrangement allows each company to focus on its respective strength and improves customer service.
4. Operational Outsourcing: This type is most common in the manufacturing industries where some operations are outsourced to third-parties. They include maintenance and repair of machine and equipment. Other types include cleaning services, landscaping, property management and facility maintenance. All can be offered by any business process outsourcing company.
Business Process Outsourcing (BPO)
Business Process Outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business functions (or processes) to a third-party service provider.
Business process outsourcing may be defined as the delegation of one or more IT intensive business processes to an external agency, which inturn owns, administers and manages the selected process based on definite and measurable performance. BPO allows companies to concentrate on their core activities there by enhancing productivity, innovative capabilities and cost reduction.
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It is an important source of strategic advantage. The client can only pay for quality service completed by BPO companies. BPO is one of the major contributors to the growth and development of country economic.
Importance Of Business Process Outsourcing
Business Process Outsourcing is contributing greatly to the economy growth and development of many countries around the world. This business services is helping companies to give out those tasks that could be a burden to other companies who specializes in those areas.
It helps organization cut costs by reducing HR Costs – salary bills, employee benefits, administration overheads. It allows companies to concentrate on their core activities.
It helps to reduce recruitment and training expenses that companies do incur. It helps Improve quality of service and productivity by bringing greater accountability and transparency in production standards.
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It enables an organization to get increasing volume of paperwork and routine administration work done quicker and at significantly lesser cost. BPO also offer all round the clock service availability which is very important in customer service related operations.
Types Of Business Process Outsourcing Services
BPO services are generally categorized into:
1. Horizontal BPO: Horizontal BPO vendor specializes in carrying out particular functions across different industry domains. The type of services companies under this category render are wide. Examples include: outsourcing in procurement, payroll processing, HR, facilities management and similar functions, benefit administration, tax solutions.
2. Vertical BPO: A vertical BPO focuses on proving various functional services in a limited number of industry domain
s. Healthcare, financial services, manufacturing and retail.
Services Rendered By A Business Process Outsourcing Company
1. Customer Service Support
2. Tele-Marketing
3. Technical Support Services
4. Insurance Processing
5. Data Processing Services/ Data Entry Services
6. Legal Services
7. Property Maintenance Services
8. Data Conversion Services
9. Research Services
10. Book keeping and Accounting Services
11. Healthcare Services
12. Technology
13. Mortgage
14. Travel and Hospitality
15. Retail
16. Transaction and Payment Processes
17. Delivery Services
Top Global Business Process Outsourcing Company/Companies
1. IBM :- International Business Machine, the company offers technological services to different companies around the world.
2. Accenture:- Accenture is a global management consulting and outsourcing company.
3. Genpact:- Genpact is a global business process and technology management services company. Genpact recently announced expansion in South America.
4. Stream Global Services:- As a global BPO, Stream is best known for its sales and customer support services.
5. Tata Consultancy Services:– It is India’s largest BPO services provider and a part of the larger Tata Group of companies (which include everything from cars to chemicals to consultants).
6. Convergys Corporation:- A relationship management BPO company.
7. Wipro Technologies:– Wipro reported $4.7 billion in revenue in 2010. Wipro is a global information technology services company headquartered in India.
8. Infosys BPO Limited:- is the BPO subsidiary of Infosys Limited. It was established in April 2002. On March 31, 2014, it had 28,658 employees servicing 144 clients in its 26 delivery centers in 13 countries.
9. Contact Solutions:- Contact Solutions was Incorporated in Nigeria as Private Limited Liability Company in 2002 and commenced full operations in Jan 2006. It is one of the leading Contact Centre Services and Customer Management Solutions provider in Nigeria.
10. CNSSL Contact Centre Limited (CNSSCC):- This is a subsidiary of Communication Network Support Services Limited (CNSS). It was formed in 2009 as the first indigenous call centre outsourcing company in Nigeria. Its contact centre services cover the entire spectrum of customer support and telemarketing needs of enterprises with expertise in inbound call centre services, outbound call centre service, market research, products consumer research, consumer surveys and data collection.
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