Business Process Outsourcing

Business process outsourcing used to be exclusively

implemented by manufacturing firms but today, even

service-oriented firms have been benefiting from them.

Business process outsourcing or BPO refers to

activities or functions that are contracted to a third

party to reduce costs, improve productivity and

efficiency, and achieve greater innovation.



Types of Business Process Outsourcing Various

functions of a business can be outsourced. What they

are will depend on your company’s strengths and

weaknesses and its projected benefits.



Customer Relations Management This is arguably the

activity that’s most commonly outsourced by both

manufacturing and service-oriented firms. Indeed, a

huge majority of the BPO industry is composed of call

centers specifically tasked to handle customer

relation needs of client firms.



Equipment Rather than invest in equipment that they

will only occasionally use, companies prefer to

outsource their need for expensive equipment by

renting them instead. Whereas outsourcing agreements

are commonly long-term for customer relation

activities, outsourcing equipment needs are commonly

done on a per-project basis.



Finance and Accounting In dynamic and highly

competitive industries, companies need to focus more

on product development and whatever aspect of their

business that serves as their core competency. Because

of this, the company has lesser time to concentrate on

administrative functions like finance and accounting.

Most companies choose to outsource finance and

accounting functions to continue devoting most of

their attention in improving organizational strengths.



Human Resources One of the best examples of

outsourcing human resources activities is the Bank of

America. For quite some time now, the well-known

banking company has relied on Exult, a BPO human

resource vendor, for all its HR needs.



HR management is not something that just about any

manager can handle as it deals directly with people

and all related issues. Recruitment, compensation, and

performance evaluation are just some of the many key

activities in HR that have direct impact on an

organization’s ability to achieve its goals.



Logistics Logistics refer to the management process of

all materials and goods used and produced by the

business. Typical functions making up a company’s

logistics include but aren’t limited to product

allocation, scheduling, and forecasting, inventory

control, and order entry.



A small fashion designing business may choose to focus

on designing products and then outsourcing its entire

logistics needs to a BPO vendor that’s well-versed and

more experienced in handling such activities.



Supply Chain Management Also known as SCM, this

process involves the planning, implementation, and

control of supply chain functions. Logistics is a part

of supply chain management. Common problems in SCM

include distribution network configuration, inventory

management, integration of information, distribution

strategizing, and cash flow management. For companies

to enjoy success in outsourcing their SCM functions,

they must be prepared to involve their partners in

local and central activities to a certain extent.



Security Finally, most companies nowadays choose to

completely outsource their security needs, regardless

of their preference for automated or human-managed

security. Security is a highly specialized field. An

advertisement firm would hardly know, for instance,

what the best security measures are in cases of

break-ins.



By outsourcing security needs to the appropriate BPO

vendors, companies are rest assured that their assets

are under strict protection of professionals. No

longer having to worry about security concerns,

companies may then concentrate more on other and

pressing activities.



Business process outsourcing is not exclusive to big

businesses and corporations. Your small business can

benefit from BPO, too, if you know the right

activities to outsource.