There are many advantages and disadvantages of business process outsourcing as discussed below:
Advantages of Outsourcing:
There are many advantages of Outsourcing as explained below:
1. Improve your Productivity:
BPO saves time and helps the executives to explore new revenue areas, accelerate other projects and focus on their customers. This leads to improvement in the productivity of any organization.
2. Ideal utilization of the resources: There is an ideal utilization of the resources. BPO enables best utilization of scarce resources. Outsourcing helps to capture new efficiencies and transfer the resources. This increases the efficiency and productivity. Availability of skilled employees and implementation of sophisticated technologies leads to utilization of resources and productivity.
3. Reduction in costs: Cost saving is the major factor driving the need to outsource. BPO helps in reducing overall operational costs of business organizations and boosting all over business profits.
4. Focus on core business functions: Outsourcing document scanning and data entry work to reliable BPO firms often permits more time for business professionals to involve in core business activities, thus generating new income streams. Back office outsourcing also helps business enterprises focus more on customer care, sales and market.
5. Suitable Utilization of time: Business Process Outsourcing is very crucial for saving time and obtaining outstanding services within strict deadline.
6. Refined technology at lower costs: Technology is the leading area of business process outsourcing. Investing in new technology is essential to keep pace with the latest innovations and solutions. Thus outsourcing to companies that have the resources, expertise and desire to continuously update their technological solutions, offers a true advantage.
Generally, the advantages of BPO are very similar to those of outsourcing in general. As the most flexible form of outsourcing, business process outsourcing can bring benefits but involves larger limitations and a smaller scope of application.
Disadvantages of Outsourcing:
There are also some disadvantages of outsourcing as discussed below:
1. Lack of customer focus: An outsourced retailer may be catering to the expertise-needs of multiple organizations at a time. In such situations vendors may lack complete focus on your organization’s tasks.
2. Hidden costs: While outsourcing is considered cost-effective, there are some hidden costs. So before passing an assignment make sure to have the detailed contract paperwork.
3. Risk of revealing confidential data: When an organization outsources HR, Payroll and Recruitment services, it contains a risk of exposing confidential company statistics to a third-party.
4. Synchronizing the deliverables: In case you do not choose a right partner for outsourcing, some of the common problem areas include stretched delivery time frames, sub-standard quality output and inappropriate categorization of responsibilities. At times, it is easier to regulate these factors inside an organization rather than with an outsourced partner
So it is necessary to know the advantages and disadvantages of business process outsourcing before ensuring any task to an outsourcing service provider.
Equate the nature of services offered by various business outsourcing service providers and indicate to a BPO firm that you feel that you can meet your specific wants.
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Community, I have a question for you all. Which business books are on your must-read list? Which ones are your go-to reading for entrepreneurship? Have you recently added any to your future reading list, or do you recommend any? Contributor Kate Volman provided her choices to the StartupNation audience. You can click the link below to watch the video and find out which books are on her her must-read list. But now, I want to hear from you. Let me know in the comments. Video: https://goo.gl/aR5qiu