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Understanding a Global Phenomenon: the Mushrooming of BPO Companies
The turn of the century paved the way to a global phenomenon in economy that ever strengthened the ties binding the east and the west, facilitated by the ever growing field of information technology. By the dawn of the new millennium hundreds of firms emerged as the pioneers of what would become a booming industry for the years to come. These firms came to be known as BPO companies – companies that engage in a relatively new economic venture called business process outsourcing. It is amazing to see how far this development has reached through the years and how much BPO companies have instigated such a major change in economic scene all over the world.
BPO 101
BPO is the term used to refer to the process where companies avail of the services of other companies to provide and administer an enterprise’s business applications and processes, both critical and non-critical. The prime example of BPO companies would be call centers, which are now one of the fastest growing sectors of the economy. Other examples include payroll, accounting, and human resource management outsourcing services. What makes BPO companies a global phenomenon is that it may involve overseas resources, and it has now stimulated economic growth in developing countries such as India and the Philippines.
The process involved in availing the services of BPO companies is quite different from that of the ones involving the seemingly similar application service providers or ASP. With BPO, greater work is delegated to the service providing companies, freeing the outsourcer from a great bulk of responsibilities that keep them from focusing on their main business process. While ASP companies would only provide access to certain features and functionalities by means of software, BPO companies would run the business processes themselves. Apart from the use of software, BPO companies would also provide process management together with the people to work on the service availed.
Why Great Multinational Companies Avail the Services of BPO Companies
A great number of the world’s corporate giants have delegated big bulks of their business processes to BPO companies because of the many advantages provided by outsourcing. Here are the major reasons great industry players hire BPO companies:
1. The endeavor allows companies to purchase valuable intellectual capital – BPO companies can provide their clients with great technological advantages operated by highly skilled and trained workers. Instead of the outsourcer exerting efforts to obtain the latest technology and train their own people to operate them, they can just delegate projects needing these intellectual capitals to BPO companies who already have them. This then allows the businesses to avail of specific features that they would need to pursue their objectives.
2. With a great bulk of non-vital business processes done by another company, the outsourcer can then focus on their core business functions – many companies waste a lot of resources tending to non-vital aspects of their business processes that they may lose focus on the main parts of their business. Though these projects are still important to sustain the flow of the business, great relief can be achieved if they can just be delegated to another party so that the company can focus more on what their business really entails. With the help of BPO companies, businesses may just focus on their main operations and no longer mind other processes such as customer care, accounting, payroll management and the like.
3. The outsourcer would also be able to make better anticipations of future costs – because BPO companies include cost computations in their proposals to their clients, the businesses availing their services would be able to know the exact costs of the projects being outsourced. Organizations usually choose BPO companies through biddings and by that, they would be able to determine which ones would be able to provide cost effective services. When the company accepts a bid, they would get the exact figure of the expenses involved in the project that they put of for outsourcing.
4. Best of all, a company availing the services of BPO companies can greatly lower their overall business costs – perhaps the main reason great corporations avail of BPO companies is the lowered costs of operations. The cost of delegating projects to BPO companies has been observed to be greatly lower when compared to the costs of companies managing the projects internally. This is especially true with BPO companies who have off-shore operations in developing countries, where business costs are so much cheaper.
With these great advantages of BPO companies, there is no wonder why business process outsourcing is turning out to be the fastest growing industry in the world. Truly, this phenomenon has shaped the economic landscape globally.
