Decisions in Pursuing Business

Process Outsourcing
For the past years, vendors have been marketing
BPO as an alternative to the typical IT
outsourcing deal, encouraging customers to
identify noncore processes that are inefficient,
too costly, or difficult to manage. The entire
process (except, in most cases, high-level
management positions) is then turned over to
the vendor, who, in turn, typically agrees to
productivity, customer satisfaction, and cost
savings commitments.
 As the IT outsourcing marketplace became
standardized, BPO customers/clients are looking
for innovative ways to increase the efficiency
and quality of an entire business process
through value-added services, customer
satisfaction, and, ideally, a direct, quantifiable
impact on cost.
Key business drivers for customers/clients
considering BPO
• Transferring the entire function (not just the IT component)
to a qualified supplier

• Enhancing/improving methodologies

• Benefiting from industry knowledge or experience

• Streamlining or standardizing processes across the

organization

• Sharing resources or technologies

Key business drivers for customers/clients
considering BPO
• Committing less up-front investment to new
methodologies or technologies

• Obtaining flexibility with respect to the roll-out of

methodologies or technologies

• Increasing productivity Quantifying savings or benefits

• Tracking customer satisfaction Enhancing shareholder

value
General BPO Types
Business process outsourcing has usually been
discussed in terms of the international relocation of
jobs and workplace functions. In reality, there are
three general types of BPO: offshore, onshore, and
nearshore.

Clients/Business customers are prone to use any or all

of these types, depending on their needs and the BPO
initiative being implemented. In some cases, firms use
a combination of types to achieve their objectives.
General BPO Types
Offshore
• Offshoring is quite popular due to globalization and there are
many good reasons to work with a foreign company. Businesses
are looking at low labor costs and tax savings when choosing to
contract an overseas company.

• Other reasons that prompt managers to offshore their processes

include the availability of qualified talent, political stability, and
the lack of language barriers. A company that decides to offshore
its customer support call center to an overseas company will
most likely see a reduction in overhead costs. Consequently, they
can lower their prices, which is beneficial to their clients.
General BPO Types
Onshore
• Also known as domestic outsourcing, onshore BPOs
involve outsourcing business processes within the
home country.

• The business may outsource the customer support

department to a company in a different city. One
reason for doing this is that the process may require
skills that are only available in a certain region
where it’s less expensive.
General BPO Types
Nearshore
• This is the outsourcing of business processes to a
company that’s close to the businesses geographical
location and most likely has the same language and
similar culture.

• If the business is in the United States, nearshore

outsourcing would be to a country such as Canada. This
is often utilized when the business need to work with
companies that are in the same time zone or that have a
similar culture and/or speak the language.
The Decision to Outsource
Business Processes
• BPO has managers around the world asking what it can do for
them and what it might do to them. They are excited about the
potential for BPO to help them manage costs and improve their
balance sheets. Under constant pressure from analysts to control
headcount, outsourcing back-office activities to contract laborers
in remote corners of the world can provide welcome and quick
relief.

• Many leaders are also concerned about the risks of BPO. They
are un- sure about the information security issues associated
with outsourcing back- office processes.

• It is critical to point out that BPO is not a technology or a

technology system; it is a business strategy.
Benefits of Business
Process Outsourcing
Some of the most common benefits of BPO are:
• Cost reduction. Hiring a company specialized in this service
can reduce the associated costs.

• Improve results in non-core functions. Related to the

previous point, having people specialized in a task can
improve its effectiveness and efficiency.

• Ability to focus on the core of the business. Some

processes are lateral to the core of the company’s
operation, so outsourcing them avoids losing focus.
Benefits of Business
Process Outsourcing
• Facilitate coverage of different time zones and regions,
hiring companies that can provide people in different
countries.

• Faster time to solve a specific problem, since instead of

developing in-house capabilities, a company that already
has them is hired.

• Improve or solve communication problems, since the

entire team is hired to handle the outsourced process
from start to finish.
Risks of Business
Process Outsourcing
1. Inaccurate Definition of Task Areas
2. Lack of Expertise in Outsourced Tasks
3. Choosing the Wrong BPO Service Provider
– Expertise
– Experiences
– Real-life Operational Capabilities
– Professional Support and Trustworthiness
– Optimization Strategy
Risks of Business
Process Outsourcing
4. Selecting the Appropriate Outsourcing
Approach ack of Expertise in Outsourced
Tasks
– The three most popular outsourcing models are:
• Time and material contract
• Fixed-price contracts
• Dedicated teams
Risks of Business
Process Outsourcing
5. Hidden costs
6. Misunderstanding Cultural Context
7. Poor Knowledge Transfer
8. Poor Management and Communication when
outsourcing
9. Obstacles from BPO Contractual and Legal
Risk Processes
10.Change BPO partner
Business Process
Outsourcing Vendors
• BPO vendors are businesses that offer outsourcing
services, and they may specialize in specific functions,
such as information technology (IT), or in a range of
functions, such as different types of customer service.

• They may be based in low-cost areas that enable

them to offer their services at competitive prices, and
they may enable their clients to increase flexibility
and vary the level of services received as required to
maintain a viable business model.
Effectiveness of choosing
BPO Vendors
• The effectiveness of a BPO vendor can be the result of a location in a
low-cost area combined with a skilled and specialized workforce.

• Some successful BPO vendor companies are based in countries where

the vendor can combine efficient operating costs with English language
skills and specialization in particular areas, such as IT services.

• Other BPO vendors may specialize in functions such as human

resources or customer service.

• One aspect of customer service is the call center, which is the function
most often associated with outsourcing and the one most frequently
encountered by the general public.
 When identifying vendors to provide BPO services, the customer’s
spectrum of possible vendors will depend on the particular process
under consideration as well as the scope of the outsourcing.

The customer may consider one vendor to simply continue the

operation of an existing process service but another for a more
complex outsourcing that requires the development,
implementation, and management of new methodologies and/or
technologies.

Another factor to consider when selecting possible vendors is the

geographic scope of the outsourcing. For multinational transactions
or transactions in foreign countries, the customer should identify
vendors with resources in the locations under consideration for
outsourcing.
Top BPO Companies
Accenture – a cutting-edge IT company as well as a BPO offering a talented
workforce. They have a presence in over 120 countries and employ more
than 500,000 people globally. They have several major clients in the Fortune
Global 100.

Cognizant - This US multinational company offers smart digital solutions in

business operations, consulting, and information technology. They
specialize in working with banks, retail consumer goods, and insurance.

Concentrix – a BPO that subsidizes companies in automotive, healthcare,

finance, and e-commerce. Concentrix offers solutions to clients in 140+
countries from its US base in California. It even acquired Convergys, another
third-party service provider, to increase its client engagement services.
Top BPO Companies
DOXA - DOXA supports small to mid-size businesses to help
them reach their greatest heights. They specialize in the
factors that can make or break smaller businesses to even the
playing field with large companies without breaking the bank.
They work to build scalable, high-performing, global teams for
companies where it has never been possible before.

Wipro - This company supports businesses in banking, retail,

travel, and education from their base in India. They service
major clients like Walmart, Philips, Best Buy, and HP using
Cloud infrastructure.
Top BPO Companies
Genpact - a BPO company that offers AI-based digital solutions for many
industries such as banking, hospitality, energy, and manufacturing. It has a
presence across 30+ countries and over 85,000 employees.

EXL Service - This New York-based BPO company offers insurance,

healthcare, banking, and logistics solutions in countries like India, the United
Kingdom, and the United States. They have over 30,000 employees who use
advanced analytics to determine specific insights for each client and enable
knowledgeable operations.

Teleperformance - This French-based BPO focuses on customer service. They

offer an assortment of invaluable services in the customer service industry,
such as intelligent automation, social media, and analytics. They also provide
content moderation which is helpful to startups of any size.
Top BPO Companies
Skyes – a multinational BPO company headquartered in
Florida. The company is known for its exceptional ITES
services and IT consulting in helping its clients create
meaningful and smart customer experiences.

SunTec India – a well-recognized, multi-network BPO

company headquartered in India. It is acclaimed for its
overabundance of IT services that help businesses more
efficiently realize their ROIs. The company has been a BPO
since 1999. It provides services in data entry and
management, as well as e commerce and SEO.