The introduction of BPO(BPO 简介 英文版)

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BPO - What is Business Process Outsourcing?

BPO is referred as "Business Process Outsourcing". The act of transferring some of an organization's repeated non-core and core business processes to an outside provider to achieve cost reductions while improving service

quality is referred as Business Process Outsourcing (BPO). In BPO outsourcing, the outside provider not only takes on the responsibility to manage the function or business process, but also re-engineers the way the process has been traditionally done.

Originally, this was associated with manufacturing firms, such as Coca Cola that outsourced large segments of its supply chain There are two primary types of BPO now: back office and front office outsourcing. Typical back office processes that may be outsourced include payroll, billing, logistics and human resources. Some companies offer their services in collections, credit analysis and job recruitment. More than ever, processes that one would never think would be outsourced, such as claims processing at an insurance company, are being outsourced to separate companies. Examples of front office outsourcing include technical support, customer service, marketing and advertising.

The Business Process Outsourcing (BPO) provides innovative, effective, and high-quality services to customers all over the world. The Business process outsourcing, BPO outsourcing is becoming extremely demandable and

promising in new generation. BPO outsourcing is emerging as a powerful and flexible approach that business kings can use to achieve a highest range of tactical and strategic aims. Effective BPO outsourcing encompasses much more than just changing who is responsible for performing the process. Advantages of BPO

An important aspect of business process outsourcing-BPO is its ability to free corporate executives from some of their daily process management responsibilities, thus helps increase a company’s flexibility. By outsourcing their business operations to third party, companies have the following advantages:

However, several sources have different ways in which they perceive organizational flexibility. In early 2000s BPO was all about cost efficiency, which allowed a certain level of flexibility at the time. Due to technological advances and changes in the industry (specifically the move to more service-based rather than product-based contracts), companies who choose to outsource their back-office increasingly look for time flexibility and direct quality control. Business process outsourcing enhances the flexibility of an organization in different ways:

Most services provided by BPO vendors are offered on a fee-for-service basis, using business models such as Remote In-Sourcing or similar software development and outsourcing models . This can help a company to become more flexible by transforming fixed into variable costs. A variable cost structure helps a company responding to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible. Outsourcing may provide a firm with increased flexibility in its resource management and may reduce response times to major environmental changes.

Another way in which BPO contributes to a company’s flexibility is that a company is able to focus on its core competencies, without being burdened by the demands of bureaucratic restraints. Key employees are herewith released from performing non-core or administrative processes and can invest more time and energy in building the firm’s core businesses. The key lies in knowing which of the main value drivers to focus on customer intimacy, product leadership, or operational excellence. Focusing more on one of these drivers may help a company create a competitive edge.

A third way in which BPO increases organizational flexibility is by increasing the speed of business processes. Supply chain management with the effective use of supply chain partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a manufacturing company.


Finally, flexibility is seen as a stage in the organizational life cycle: A company can maintain growth goals while

avoiding standard business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.

A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for

people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time. limitations

Although the above-mentioned arguments favor the view that BPO increases the flexibility of organizations, management needs to be careful with the implementation of it as there are issues, which work against these

advantages. Among problems, which arise in practice are: A failure to meet service levels, unclear contractual issues, changing requirements and unforeseen charges, and a dependence on the BPO which reduces flexibility.

Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing.

A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality Improvement approaches. Threats

Risk is the major drawback with Business Process Outsourcing. Outsourcing of an Information System, for example, can cause security risks both from a communication and from a privacy perspective. For example, security of North American or European company data is more difficult to maintain when accessed or controlled in the Sub-Continent. From a knowledge perspective, a changing attitude in employees, underestimation of running costs and the major risk of losing independence, outsourcing leads to a different relationship between an organization and its contractor. Risks and threats of outsourcing must therefore be managed, to achieve any benefits. In order to manage outsourcing in a structured way, maximizing positive outcome, minimizing risks and avoiding any threats, a Business continuity management (BCM) model is set up. BCM consists of a set of steps, to successfully identify, manage and control the business processes that are, or can be outsourced.


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