BPO .....to bpo or not to bpo is an obvious question for a company to answer,but it becomes an easy task to answer this question when we have knowledge about it!!!!
so here i am gonna share with you that is bpo a right option to hire employees and how to analyse its opportunity...
Do comment me whether you liked my post and any other requirements if any ?? and if you want me to make a post on any other topics related to business case studies you can comment me below....
What is business process outsourcing ?
Business process outsourcing, or BPO, is a business practice in which one organization hires another company to perform a process task that the hiring organization requires for its own business to operate successfully.BPO as an option....
BPO is not right for every company, nor is it right for every process in a given company, but its promise makes it imperative that managers seek out BPO opportunities and exploit them where possible.
Whether or not your company has formal functional boundaries, it has processes that may be suitable for
outsourcing to third-party providers.
outsourcing to third-party providers.
BPO was pioneered primarily by large companies, eager to reduce their costs and bloated payrolls.
Today, many small- to medium-sized enterprises (SMEs) have discovered BPO advantages that enable them to compete with the larger firms that have been using outsourcing for years.
In 2001, 75 percent of BPO users were firms with greater than $500 million in revenue. By 2002, that number had dropped to 64 percent.
What is indisputable is that any business that has grown to more than about $25 million in sales has begun to encounter growth-related challenges in back-office processes that may be suitable for handing over to an outsourcing
partner.
partner.
For example, an exhibits design company in Illinois has 25 employees.
To control costs, the firm had whittled down its health care coverage over a period of years.
As a result, it had begun to struggle to attract and retain talented employees.
In an effort to remedy the situation, the company outsourced its HR and benefits processes to a professional employer organization (PEO).
By outsourcing to the PEO, the company now can offer a lower-deductible plan with better health care and dental coverage,while gaining the use of a professional claims manager.
The firm was able to offer its employees these additional benefits while saving 40 percent overall on its health care costs.
Without question, the decision to implement a BPO solution for any organization
has far-reaching consequences and risks.
has far-reaching consequences and risks.
At the same time, these implications of the decision-making process should not lead to paralysis— there are too many possible benefits to fall into the trap of doing nothing.
It is important for decision makers to recognize that undertaking a BPO initiative is a strategic action.
With the increasing sophistication of BPO providers,the decision to outsource is no longer one of mere cost savings or headcount
reduction; it is also one of performance enhancement in critical functional areas.
reduction; it is also one of performance enhancement in critical functional areas.
Is your technical support team overwhelmed by customer inquiries? Consider a BPO provider.
Is your new-product development cycle too slow? Consider a BPO provider.
Is your accounts receivable department tardy in tracking down late payers? Consider a BPO provider.
In each of these examples, and many others, the choice of adopting a BPO solution is based on improving the company’s performance in that process.
In each case, performance enhancement may mean much more to the firm than simple cost reductions.
With these potential advantages, it is not difficult for organizations to justify a decision to at least investigate BPO opportunities.
At the same time, inquiring into BPO has potential organizational consequences in the short term that must be considered and addressed.
The most effective way to analyze and select a BPO opportunity is to utilize a deliberate, systematic approach that minimizes risk each step of the way.
We have developed and recommend a six step process for analyzing and selecting the BPO opportunity.
This process has been designed to integrate and align the decision-making process with longterm organizational strategic objectives and near-term organizational needs.
If handled systematically, the BPO analysis and selection process can be an effective way for an organization to examine itself.
Whether a decision to undertake a BPO initiative is made or not, this process will shine a light on organizational processes and activities.
This illumination will, at a minimum,help the organization identify and change underperforming processes and activities.
ANALYZING THE BPO OPPORTUNITY:
Analyzing the BPO opportunity for your organization means identifying core competencies and determining the most effective way to support high performance in those activities.
Analyzing the BPO opportunity for your organization means identifying core competencies and determining the most effective way to support high performance in those activities.
As many organizations have discovered, an increasingly effective way to support core competencies is by outsourcing noncore
functions to third-party providers.
functions to third-party providers.
We have developed a six-step process for organizations to use to analyze and select BPO opportunities.
Each step in the process is designed to help organizations link BPO decision making to overall organizational strategy:
1. Establish a BPO analysis team (BAT).
1. Establish a BPO analysis team (BAT).
2. Conduct a current state analysis.
3. Identify core and noncore activities.
4. Identify BPO opportunities.
5. Model the BPO project.
6. Develop and present the business case.
Although these steps seem transparent, many organizations overlook opportunities or misunderstand the true value versus risk proposition by skipping steps in the analysis.
An organization can also find itself managing confusion
if a non-systematic approach is used.
if a non-systematic approach is used.
This six-step process is not the only known approach to analyzing the BPO opportunity.
However, this proven process can increase the likelihood of success and minimize the risks associated
with a BPO initiative.
BPO types:
with a BPO initiative.
BPO types:
when thinking to outsource the work the most important which is but obvious to come to our mind like
hey,
how many types of bpo are there?
or be it
what are the types of bpo:
there are mostly main three main types. those are KPO, LPO & RPO.
but there are other types also so i am listing all of them,
let's get going,
1.Information technology enabled service abbreviated as ITES, is defined as process outsourcing which are information technology enabled and diverse areas like manufacturing,finance , administration,HR, etc. related to technology and man power, these services are provided through E-enabled locations.
This radically reduces cost and improves service standards.
2.Knowledge process outsourcing abbreviated as KPO, is defined outsourcing of knowledge,skill and expertise based processes which are vital part of a company's value chain.
kpo requires advanced analytical and technical skills as well as high specialist expertise to gain competitive advantage.
3.Recruitment process outsourcing abbreviated as RPO, is defined as a process of outsourcing of management of the process of recruitment to drive benefits of cost,scalability, efficiency and expertise.
4.Legal Process outsourcing abbreviated as LPO, is defined as a process of outsourcing of In-house legal departments,law firms and other to other firms in order to reduce cost and increase efficiency.
also see :
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