Business Process Outsourcing: Back to the Basics

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The Basics Business Process OutsourcingBusiness process outsourcing or BPO is not a new phenomenon, but rather a normal economic activity. This has in fact become a strategic business option as a result of globalization that is boosted by the development of Internet technology.

Misunderstanding the terms can indeed create confusion. Thus, there is a need to define them in order to put things in proper perspective.


What is BPO?

Business process outsourcing refers to utilizing the services of a third party by a company. Its general purpose is to get the third party to perform certain office or business operations including, but are not limited to, the following:

  • Human resources
  • Logistics management
  • Medical transcription
  • Payroll administration and maintenance
  • Customers’ call centers or help desks
  • Finance, accounting, and billing services
  • Tele-marketing, tele-servicing and product support
  • Insurance claims processing and management
  • Legal database management and maintenance

Advantages of BPOs

Business process outsourcing provides an array of advantages such as the following:

  • Increase productivity
  • Cut down operational expenses
  • Improve products and services
  • Upgrade business liability

An emerging industry

Business process outsourcing has emerged as an industry itself in the past few years, apart from traditional or Information Technology -related industries.

This type of industry is currently booming in countries like India, China, Mexico, South Africa, and the Philippines, contributing hugely to the economic development of these countries.

Through outsourcing, many U.S. firms have in fact saved billions of dollars, gained significant lead over their competitors, ensured high quality of products and services, and boosted customer satisfaction further.

Such innovation is prompting more and more companies that are based in the U.S. to utilize business process outsourcing, creating favorable conditions for the continued growth of the industry. And with technology making new waves, it is expected that profits can be generated instantaneously than before.

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