Business Process Outsourcing (BPO) is the practice of outsourcing non-core work process to an external service provider. This can enhance the management function and improve an organisation’s operations by ensuring that the organisation’s focus is only on its core operations. BPO enables an organisation to align its business processes to its business strategies, through management of processes, rather than tasks, to improve business performance and promote operational agility.
Organisations adopt Business Process Outsourcing as a strategy, to gain competitive advantage. BPO deals with the optimisation of an organisation’s processes to improve effectiveness and efficiency.
Why outsource a non-core business process?
- Cost saving – Reduced personnel and training costs, and related costs of space for housing internal employees.
- Flexibility – Outsourcing creates flexibility when managing risks associated with either setting up a new business/unit, or introducing a new product/service.
- Focus on core operations – An organisation’s available critical resources can be directed at maximizing its overall growth and realising its intended business strategies.
- Improved outcome in non-core function – An outsourcing company invests in specialised technologies and processes to be in the forefront of technological breakthroughs and solutions for its clients.
Examples of typical processes that organisations can outsource to promote operational agility:
- Payroll processing
- Accounting function
- Customer support and service
- Administrative support and data entry
- Revenue management and enhancement
- Information services
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