Benefits of Business Process Outsourcing

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Business Process Outsourcing (BPO)

By Mary K. Pratt and Emily McLaughlin,Content Development Strategist

https://searchcio.techtarget.com/definition/business-process-outsourcing

Benefits of BPO

Organizations engage in business process outsourcing because they expect to benefit from the arrangement. The benefits typically cited by proponents of BPO include the following:

• Financial benefits: Organizations often find that an outsourced provider can perform a business process at lower costs, or they often find that, by contracting with an outsourced provider, they can save money as a result of the relationship in other ways, such as in tax savings.

• Flexibility: BPO contracts can allow organizations greater flexibility to adjust how it completes the outsourced business process, enabling them to better react to changing market dynamics.

• Competitive advantage: BPO enables organizations to outsource those processes that aren't core to their businesses or missions, thereby enabling organizations to focus more of its resources on the operations that distinguish them in the marketplace.

• Higher quality and better performance: Because the core business of BPO providers is performing the specific processes they're hired to do, they are, in theory, able to focus on providing those processes at the highest levels, often with greater accuracy, efficiency and speed.

• Quicker access to innovations in the process: BPO providers are also more likely and better positioned to know about advances and innovations happening in the area they specialize in, and they are more likely to invest in new developments in process automation that can improve the speed, cost and/or quality of the work -- benefits that flow back to the organizations that contract with the provider.

• Expanded coverage: Outsourced providers can expand the hours or geographical reach of an enterprise in a cost-effective manner. For example, an organization that wants to have 24/7 call center operations may be able to more quickly and more efficiently provide that capability by contracting with a partner which has existing around-the-clock capabilities, perhaps even in multiple geographic locations to enable a follow-the-sun business model.