Business Process Outsourcing Overview

Business Process Outsourcing (BPO) is the corporate practice of hiring an outside company to execute select business activities. This article informs the reader of the various types of BPO services available in the industry.

Business Process Outsourcing (BPO) is essentially a change in business model. It involves hiring a global services company to perform certain business tasks. Outsourcing companies are frequently employed as a corporate cost-saving measure. Generally, work outsourced to a third-party service provider is needed by the organization in order to make business processes for efficient, however is not a part of the company's core operations.

In the infancy of BPO, outsourced tasks were limited (e.g., payroll, human resources, accounting). As time progressed, business process outsourcing services have grown to include additional business value solutions such as legal services, healthcare, insurance, telecommunications, utilities and energy, and many more.

BPO can be classified into two categories: shared back office and shared front office processes. Back office outsourcing involves internal business functions, such as finance, and accounting. Front office outsourcing encompasses tech support, marketing and customer-related services. Organizations also outsource processes healthcare, insurance, shipping and logistics.

Outsourcing can be categorized into three categories based on the location of the outsourcing company (relevant to the company's primary place of operation). The three categories include: offshore, near-shore, and onshore outsourcing.

Offshore outsourcing is contracting business functions to a company located in another country. Many companies around the world continue to use offshore outsourcing to minimize overhead, to access the innovations and developments of more specialized suppliers, and to make internal process more efficient.

A task outsourced to a neighboring country, which often shares a border, is deemed as near-shore outsourcing. This is often preferred due to the closeness in geographic location, the culture similarities and the similar time zones. For example, companies in the United States frequently near-shore outsource to the adjoining countries such as Canada and Mexico.

Onshore outsourcing (also called domestic outsourcing) is contracting business responsibilities to another organization located within the same country. This option can be used for strategic reasons, including when very specialized expertise is needed that cannot be found elsewhere. The local proximity of onshore outsourcing also facilitates with in-person contact with contractors.

Regardless of the classification, outsourcing business solutions and services continue to increase, and the sky is the limit. Driven by marketing and operations performance, business executives strive to meet global productivity standards while minimizing costs. This results in more and more companies using outsourcing and business process strategy to use global services and increase business performance.

The savviest of companies have taken this great opportunity and have made global business process outsourcing part of their business strategy. If you would like to take part in this momentum of change and are looking for alternatives to implement within your business, contact a global services company for more information.

Business Process Improvement

Do You Need Business Process Improvement?

If you are trying to decide if you need to consider business process improvement, you first need to look at the business processes that your company or business utilizes. If the processes are working effectively and your business is running well then you may wish to leave the processes alone. However, if you feel that they could be improved and operations improved as well then considering business process improvement is a very wise decision.

If you feel as if your business could use a great amount of reorganization then one of the best ways to do this is by doing a business process improvement. While the process of doing a business process re-engineering plan may seem better, it is typically much more expensive as well as can cause a huge upset in the flow of business. For this primary reason most establishes will instead opt to participate in a business process improvement plan.

Another benefit to a business process improvement is that it is much cheaper than an engineering or even re-engineering process. This means that the business process improvement can be easier to fit into the budget than the re-engineering process. While some businesses do decide that the overhaul of their processes needs to be drastic enough to warrant using the re-engineering procedure, most businesses are able to find the best results possible from merely using improvement.

Some businesses do not always understand how a business process improvement can really help them. Yet an improvement in the processes can equal out to a greatly improved profit margin for the business. Aside from this, a business process improvement plan can also equal up to a streamlined improvement in the operations from a management position as well. Many times any problems with the overall organization of a business can be resolved with a simple improvement.

This means that most of the re-engineering processes are merely a waste of time and money. There is no reason to disrupt the normal operations of most businesses just with a small tightening of processes. However, if a small tightening will not resolve the needs, then often times a complete re-engineering is necessary. If you are trying to keep your business operational and functional, the best option you have is using the business process improvement plan, rather than only the re-engineering method.

As you can see there are several reasons why business process improvement is a good idea. The time and expense spent on the process can result in a huge improvement on overall business procedures. With an effective improvement plan, you will definitely notice a huge amount of difference in your business. There should be a higher profit level, less downtime and a much-improved streamline effect for your entire business.