Business Process Outsourcing (BPO)
Business process outsourcing (BPO) is a method of subcontracting various business-related operations to third-party vendors. BPO includes recruitment and customer-related services such as tech support, sales, accounts, human resources, administrative and marketing.
As businesses seek to lower costs, compete, expand their global reach and focus on their core concerns, they have turned to outsourcing their noncore business processes. Information technology (IT) was first outsourced decades ago when big data systems were too costly for smaller companies to own, but made sense to share. Now, low-cost global communication networks allow vendors to send information almost anywhere in an instant. Technicians running software thousands of miles away can produce data for you to view on your desktop at will.
“Business process outsourcing (BPO) is the movement of business processes from inside the organization to external service providers.”
3 types of BPO
- Offshore Outsourcing – Faraway countries like Australia, New Zealand, Japan, Korea, China, American or European countries
- Nearshore Outsourcing – contracted to neighbouring countries like Malaysia, Indonesia
- Onshore Outsourcing (domestic sourcing) – contracted to company in the same country
Advantages of BPO
- Flexibility and Dynamic
- Manpower cost reduction from weaker labour laws, reduced corporate income tax and personal income tax
Disadvantages of BPO
- Data Security and Privacy Breaches
- Poor Coordination from weak communication due to cultural differences
Your Relationship with Your BPO Vendor
Both your firm and your vendor must benefit for your BPO project to succeed. Build the relationship on trust and respect. It also requires six additional elements:
1. You must understand and support your vendor’s need to make a profit. Either party need to look after each other long terms interests
2. Both sides must realize that they’ll need to adjust the Service Level Agreement as they gain experience or as changing factors require new performance levels.
3. Your firm must know, acknowledge and live up to its commitment to the project.
4. The project team must prepare for any staff changes to keep the program on track.
5. Participants should use standard resolution methods to identify and fix problems.
6. The project team must understand the interpersonal norms in both companies, particularly if they are in different countries.
Handling BPO Risks
Certain risk factors accompany all BPO projects. If you have problems in these areas, have a plan
to stop the losses before they become threatening. These risks are:
• Risks to your human capital, including knowledge and talent.
• Risks associated with designing, executing and operating the project.
• Risks that your intellectual property may leak to your competitors.
• Risk that your vendor might use what it learns to become your competitor.
• Legal risks and litigation due to badly written contracts, unmet SLAs, HR issues or more.
• Risks that your vendor may not meet its commitments, may be purchased, may violate HR laws or may even go out of business.
• Risks that key project components may change and destroy your value proposition.
• Unforeseeable, uncontainable risks due to natural disasters, political change or epidemics.
Recruitment Process Outsourcing (RPO) is a form of Business Process Outsourcing (BPO) where an employer transfers all or part of its recruitment processes to an external service provider
Recruitment Process Outsourcing (RPO)
Recruitment process outsourcing is the full or partial outsourcing of a company’s internal recruitment function to a specialist firm who assumes the role of the client’s recruiting department by owning and managing the recruiting process and related recruiting relationships. RPO firms provide the necessary skills, activities, tools, technologies and process methodologies to clients in an on-site, off-site, or virtual delivery model. RPO is commonly used to recruit direct-hire employees.
We provide all services of staffing support to Information Technology/Consulting/Solutions offshore projects. We are working closely with companies to deliver staffing solution and manage their offshore recruitment needs.
Our IT consulting arm translates business strategy into viable technology solutions. We can deploy, manage, and support your IT infrastructure, whether on your premises or on the Cloud.