Business processes outsourcing can become a serious competitive advantage today. It allows you to reduce costs, gain access to highly qualified personnel and advanced technologies, and focus on the company's core business processes. So what is a BPO company? Why do we need BPO?
What Is BPO?
What is business process outsourcing? It is a type of outsourcing, where non-core business processes of one organization are transferred to another company. The key difference between outsourcing tasks and BPO is the lack of set indicators such as time or budget. It means that when you are involved in outsourcing tasks, you allocate time and set a particular budget for its accomplishment. With BPO, you may not have time constraints and a fixed budget because you transfer not just individual tasks, but a whole functional area within the business.
Despite the quite clear definition of BPO as the transfer of any processing activity to outsourcing, this term corresponds to narrower areas of outsourcing. For example, the company wants to outsource industrial production which is the fact that this type can be distinguished as a separate form of production, or simply out, industrial outsourcing.
Most often than not, the BPO refers to the outsourcing of high-level processes, which require more knowledge and experience from workers. Usually, such processes encompass personnel, accounting, marketing, logistics, financial management, or legal support of organizations.
What happens to market functions when outsourcing? Outsourcing as a form of business has a dual impact on market relations. On the one hand, outsourcing transfers the former internal processes that were not included in the system of commodity relations within the company into the market. On the other hand, outsourcing undermines market relations. In outsourcing, the price of a service is determined before the start of its provision and for a long period. In addition, with simple buying and selling, market transactions are free of charge, and with outsourcing, a contract must be entered into, hence there are contract costs. Thus, outsourcing is a symbiosis of the market and non-market relations.