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Business Process Outsourcing
is the long-term contracting out of non-core business
processes to an outside provider to help achieve increased
shareholder value.
Many IT professionals are familiar with the term business
process outsourcing (BPO), but knowing how to distinguish
it from other types of outsourcing requires some scrutiny.
Though some forms of BPO may include both IT management
and business operations, the approach is primarily
about turning over functions such as payroll, accounting,
billing or even real estate management to a third
party. Though these business processes may depend
on IT, they are separate functions from core IT operations,
such as data center activities or network management.
Free Your Resources and Work On Your Strategy
An important aspect of business process
outsourcing is its ability to free corporate executives
from some of their day-to-day process management responsibilities.
Traditionally, executives spend 80 percent of their
time managing details, and only 20 percent on strategy.
Once a process is successfully outsourced, the ratio
can be reversed. Executives get more control over their
most valuable resource: time. Time to explore new revenue
streams, time to accelerate other projects, and time
to focus on their customers.
Improve
Processes - Save Money
Companies that outsource business
processes are often able to reengineer those processes
and capture new efficiencies. Then they can reallocate
resources to other important projects and leverage their
investment in technology. For example, processes that
are handled in a shared production environment for multiple
companies save everyone money. In most cases, high-caliber
subject-matter experts are brought in to design and
manage these processes, bringing with them best practices,
innovation, and years of experience that most companies
don't have access to or can't afford on their own.
Increase
Your Capabilities
With this expertise often comes increased
capability. In addition to doing things more efficiently,
you can expand your ability to deliver new products
and services to your customers. Then there are the factors
of scalability and scope. Companies that want to grow
internationally must continuously invest in infrastructure
and find talent around the world. Many outsourcing providers
are already established globally and can help make the
growth process run smoothly.
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