1. Business Process Outsourcing
Steve Sugulas Study
 Advantages of Business Process Outsourcing Services
BPO or Business Process Outsourcing refers to management of the core and non-core
business tasks and processes of big and small companies through a business process
outsourcing service. The parent company leverages on the technical expertise provided
by business service providers in various developing countries by achieving cost
reductions and enhancements in the quality of their services. Business process
outsourcing services assume responsibility of fulfillment of a job or several tasks and
play a crucial role in the management of business processes. Common business process
outsourcing industry services include but are not limited to: Call centers Medical
Transcriptions Research writing Catalog data entry Data entry services Other forms of
Business Process outsourcing services include: Catalog processing services E-commerce
data entry Product library management Online product entry Catalog process While many
or all of the above tasks are essential for the successful function.
 Competition in Business Process Outsourcing
BPO has emerged as one of the leading business and economic issues of our time. It has
become very competitive and a strategic business choice. There is an increase in
outsourcing of key business functions and related IT operations, as companies intend to
get the right things done for less money. There are 3 types of BPO: offshore, onshore and
nearshore. Offshore outsourcing means outsourcing to one who is not on your shore.
Offshore outsourcing is a concept of hiring an external organization to perform some
business functions from some other country. Onshore Many US businesses are
outsourcing back-office functions to firms based in America. They are worth considering
for services or even if their costs are higher. Nearshore “Nearshore outsourcing is used to
refer to the practice of outsourcing on North American continent. Nearshore outsourcing
allows companies to test the BPO waters without the level of risk associated with going
offshore.
 How Affordable Is Outsourcing?
Outsourcing has proven to be an effective way of getting business process done at a
lower cost. Good outsourcing plans can save us a lot of time. Also, outsourcing allows
you to focus on your core business while delegating the non core activities to the experts
in that field. Let’s examine the various kinds of outsourcing options that are available.
Off shoring is the highly popular ways to reduce cost. With the help of off shoring the
companies can avail an affordable but high quality system and can still benefit from
cheaper wages in the developing economy. This type of outsourcing often implies to a
particular portions of work and the most obvious reason for employing this option is
cheaper labor. The economic realty is that in some parts of the world we can get 2 to 3

2. times more labor power for the same amount of money that is spent in the US. A
variation of this model can be called as “near shoring”. Near shoring is similar to off
shoring except the foreign control.
 Advantages of Outsourcing
There has been a tremendous upsurge in outsourcing industry in many developing
countries like India because of their expertise in reducing costs while increasing service
quality. An advantage of outsourcing is the way in which it helps to increase a company
flexibility which includes savings in labor costs. It is about optimizing business
performance to attain value creation. There are many other advantages to outsource
which include: 1. Speed to Market Outsourcing hastens the process of operations for the
new business. It helps to stabilize the start up business in weeks rather than months
through the use of state-of-the-art capabilities. 2. Competitive Capabilities established
businesses can evolve their current processes into globally competitive capabilities. 3.
Cost Savings Outsourcing dramatically lowers the cost of processes through the
elimination of fixed costs. 4. Growth stimulus Outsourcing can be utilized as a learning
tool to get acquainted with the latest advantages.
 Business Process Outsourcing
The term BPO stands for Business Process Outsourcing, in which firms turn over many
back-end processes as a way to cut costs and focus on core competencies. Business
process outsourcing is one of the fastest growing segments of the Information
Technology Enabled Services (ITES) industry in a wide range of companies of all sizes.
The reasons for turning to the use of outsourced services vary greatly from one company
to another. The list of BPO services start from data entry, conversion, database
management, telemarketing, order taking, queries of the customers, lead generation,
Legal services, Medical Billing and inquiry handling to product or service promotion..
BPO services can be defined as a strategic management tool that can help organizations
to improve process level efficiency and effectiveness, as well as reduce costs. The largest
segment in the BPO market will be simple bulk transactions, broad shared services, High-
volume vertical processes, niche vertical applications.