Understand Outsourcing - BPO

What is Business Process Outsourcing?

BPO stands for Business Process Outsourcing. Outsourcing is a system whereby an organisation can sub-contract certain areas of work or processes to a specialist third party organisation.

BPO or outsourcing is often referred to as ‘off-shoring’ because these companies have facilities and resources outside of the UK. This is so that they can employ highly educated personnel with lower social costs. As a result the services can be delivered at a much lower price than is possible in the UK.

BPO can be applied to most sizes of companies and many outsource some key services without actually realising it. An example of this is where a small company may retain the services of an accountant or book-keeper in order to keep financial records, VAT returns and payroll, simply because it is more cost effective to do so than to do it ‘in house’. Furthermore, it is useful to trust in the expertise of others rather than having to worry about the time and complexity of the finances. For an organisation this might include contracting out the finance, customer services and HR (Human Resources).

There are many benefits and reasons for BPO. One example would be how a small company, unable to justify a Human Resources professional, would benefit from outsourcing to a specialist contractor who could give advice and guidance as and when required. This means that the company has the expertise of a professional but not the overhead of a full-time resource.

The key vendors who provide business process outsourcing [BPO] tend to be offshore companies like Zensar, Tata Consulting, Computer Science Corporation, Infosys, Atos Origin, Fujitsu Services and Capgemini. Indian based companies are always at the forefront of keeping costs down and represent good value for money. Companies like Zensar support both large Enterprise and SME organisations alike and provide a valuable service for First Time Outsourcing companies.

The Future of Business Process Outsourcing

The future is set for continued positive growth within the field of business process outsourcing (BPO). This is driven generally (but there are other reasons) by cost reduction.

Forrester Research estimate that Europe, by 2015 will be a major user of BPO and the market is expected to reach nearly 25% of total global BPO spending.McKinsey suggest that the total potential market for BPO is worth $122-$154 billion so the market is set for continued to growth.

Why Business Process Outsourcing?

The main centres for business process outsourcing are India and the Far East, as well as Eastern Europe. In these regions there are pools of low cost and highly educated labour providing savings of around 20-50% on certain business operations. While there are many countries that are part of this growing market, India has by far the biggest share.

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