What is outsourcing?
Outsourcing is a strategic initiative that organizations take to employ external resources to conduct functions and run business processes that are both core and non-core activities and critical for business success. These functions or processes, which were traditionally handled by in-house resources, are delegated to an external party with specialized skills to perform them efficiently.
What is Business Process Outsourcing (BPO)?
Business Process Outsourcing (BPO) refers to engaging the services of an external provider to manage certain non-core yet critical processes of an organization. BPO services come under the larger outsourcing umbrella
In today’s global economy, many companies outsource business functions to reduce costs, create efficiency and add value to their business. Most industries outsource to some extent, but the most common ones are Information Technology, Financial Services, Communication (Telecoms), Consumer Goods/Service and Manufacturing.
Why is outsourcing needed?
Outsourcing comes into play when companies want to stay on the cutting edge in the market. To grow their business and increase their profitability, outsourcing has become a viable option for many companies. More than a means of just reducing costs, it has become a tool for creating and adding value to business, while allowing companies to have the ability to concentrate more on core functions and competencies. Furthermore, it helps management to re-configure business processes and provide the necessary information to assist effective decision-making and ensure quality and cost control.
What are the advantages of outsourcing?
Outsourcing carries with it many advantages for companies that engage with BPO firms.The top eight advantages that companies have access to are:
- Ability to focus on core activities
- Cost and efficiency savings
- Reduced overheads
- Operational control
- Staffing flexibility
- Continuity and risk management