Outsourcing is not about what you can subtract from a business, it’s about optimizing business performance to attain value creation. There has been a tremendous upsurge in BPO and outsourcing industry in many developing countries like India because of their (BPO) expertise in reducing costs while increasing service quality. This partnership provides enterprises the benefits of overhead cost reduction, improved productivity and better quality. But there are also some limitations if the tasks are not outsourced to the appropriate BPO service provider. Other BPO benefits include assurance of best practices, skills, and technology. It is important to note that BPO provides access to proprietary workflow systems, process reengineering skills, and innovative staffing and delivery models, coupled with world-class technology delivered by experts.
1. Cost Savings
Most companies that provide BPO services are able to be able to carry out the work for considerably less. Companies usually outsource to a vendor that specializes in a given function and performs that function more efficiently than the company could, simply by virtue of transaction volume. For example, processes that are handled in a shared production environment for multiple companies save everyone money. In most cases, high-caliber subject-matter experts are brought in to design and manage these processes, bringing with them best practices, innovation, and years of experience that most companies don’t have access to or can’t afford on their own.
2. Quality of service
It is also possible in some instances to improve the quality of service through being able to have more resources and better qualified personnel.
3. Productivity improvements
It allows executives and management to focus on critical functions of the business. Companies that outsource their business processes are often able to capture new efficiencies and in the process improve upon their productivity. They are in a better position to reallocate their resources to other important projects. This also helps their employees to increase their efficiency and productivity. In most cases, high-caliber subject-matter experts are brought in to design and manage these processes. They bring with them increased productivity and years of experience that most companies don’t have access to or can’t afford on their own. Availability of highly qualified skill pool and faster adoption of well-defined business processes leads to productivity improvements without compromising on quality.
4. Increased Capability and Quality
With this expertise often comes increased capability. In addition to doing things more efficiently, you can expand your ability to deliver new products and services to your customers. Then there are the factors of scalability and scope. Companies that want to grow internationally must continuously invest in infrastructure and find talent around the world and this is possible only trough business process outsourcing. Many outsourcing providers are already established globally and help in increasing the capabilities of the companies that are outsourcing their work to these BPOs.
5. Improved HR
Still others outsource to achieve greater financial flexibility, since the sale of assets that formerly supported an outsourced function can improve a company’s cash flow. A possible pitfall in this reasoning is that many vendors demand long-term contracts, which may reduce flexibility.
6. Focus on Core Competency
Business Process Outsourcing gives tremendous help to the companies to concentrate more on the core areas of their business. The most important factor behind the growth in the BPO market world wide today is an increase in the number of enterprises that are reviewing their internal operations in an attempt to fully understand their true core competencies. In the process they are able to focus more on their core competencies. Business Process Outsourcing gives more freedom to the management to focus more time, energy, and resources on building the company’s core businesses. It is because the BPOs assume full responsibility for managing the day-to-day back-office operations.