Business process outsourcing (BPO) means relying on an outside company for a service that was once the responsibility of the enterprise. This surely sounds complicated. But what does it really mean?
In practice, this means that when you call technical support, the operator is not an employee of Dell. This support person is not sitting in an air conditioned office in Texas, wearing a 10 gallon hat and a string necktie.
This job is now being performed in India or perhaps the Philippines. English speaking workers are taught North American slang. They are also coached to speak without an accent.
BPO has also made very strong inroads into the market for data entry, medical transcription, and medical billing.
Companies that make use of these services have more advantages than are immediately obvious. Clearly, the price of using offshore labor is much cheaper. In many cases, the most expensive cost for an business will be the cost of human resources. However, other, latent benefits exist as well. Offices that are less crowded are easier to maintain. Perhaps lease payments could be decreased by moving to a smaller office. Costs for maintaining computer systems that data entry clerks previously used no longer need to be serviced.
BPO is a small acronym, but it’s impact is extremely profound. Businesses that do not quickly adopt a progressive BPO strategy will quickly be left behind. The profit motive is very strong.
This movement has clearly been fueled by recent advancements in technology. High quality bandwidth connects North America with the rest of the world. On top of these fat data pipes, business applications are constantly improving.
The offshore BPO trend will only gain steam in the upcoming years. Currently BPO stands to compete with lower end service jobs, and high tech jobs such as programming. In the future, most functions that can be abstracted to a service will follow the same path.