LEAD Reference Content:Business Process Outsourcing - Revision history

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Admin: Created page with "{{DISPLAYTITLE: How to go about Business Process Outsourcing}} == Introduction == The great interest in outsourcing since the start of the 1980s had several causes and was in..."

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Created page with "{{DISPLAYTITLE: How to go about Business Process Outsourcing}} == Introduction == The great interest in outsourcing since the start of the 1980s had several causes and was in..."

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{{DISPLAYTITLE: How to go about Business Process Outsourcing}}
== Introduction ==

The great interest in outsourcing since the start of the 1980s had several causes and was influenced in numerous ways by process work. In this chapter, we will focus on what business process outsourcing is, why it is applied, and which aspects to consider before implementing business process outsourcing strategies in an organization.

Since the industrial revolution, companies have battled with how they can exploit their competitive advantage to increase their markets and their profits. The model for most of the twentieth century was a large integrated company that can own, manage, and directly control its assets. In the 1950s and 1960s, the rallying cry was diversification to broaden corporate bases and take advantage of economies of scale. By diversifying, companies expected to protect profits, even though expansion required multiple layers of management. Subsequently, organizations attempting to compete globally in the 1970s and 1980s were handicapped by a lack of agility that resulted from bloated management structures. To increase their flexibility and creativity, many large companies developed a new strategy of focusing on their core business, which required identifying critical processes and deciding which could be outsourced.

Outsourcing was not formally identified as a business strategy until 1989 (Mullin, 1996). However, most organizations were not totally self-sufficient; they outsourced those functions for which they had no competency internally. Publishers, for example, have often purchased composition, printing, and fulfillment services. The use of external suppliers for these essential, but ancillary, services might be termed the baseline stage in the evolution of outsourcing. Outsourcing support services was the next stage.

In the 1990s, as organizations began to focus more on cost-saving measures, they started to outsource functions necessary to run a company, but not related specifically to the core business. Managers contracted with emerging service companies to deliver accounting, human resources, data processing, internal mail distribution, security, plant maintenance and the likes as a matter of good housekeeping. Outsourcing components to affect cost savings in key functions was yet another stage as managers sought to improve their finances.

'''Document''': [[Media:Business Process Outsourcing.pdf|Download the Business Process Outsourcing document]]

[[Category: BPM Concepts & Method Knowledge]]

@@ Line 21: / Line 21: @@
 Business process outsourcing is something many organizations of any size apply. In this context, BPO is often divided into two categories:
 #back office outsourcing, which includes internal business functions such as billing or purchasing; and
-#front office outsourcing, which includes customer-related services such as marketing or tech support. Business process outsourcing that is contracted outside a company’s own country is sometimes called offshore outsourcing.
+#front office outsourcing, which includes customer-related services such as marketing or tech support.
 Business process outsourcing that is contracted to a company’s neighboring country

@@ Line 20: / Line 20: @@
 Business process outsourcing is something many organizations of any size apply. In this context, BPO is often divided into two categories:
-#back office outsourcing, which includes internal business functions such as billing
+#back office outsourcing, which includes internal business functions such as billing or purchasing; and
 or purchasing; and
 #front office outsourcing, which includes customer-related services such as marketing or tech support. Business process outsourcing that is contracted outside a company’s own country is sometimes called offshore outsourcing.

← Older revision		Revision as of 10:48, 30 November 2017
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	However, the business case for procurement is about sourcing and compliance savings, i.e., effectiveness savings (doing it better or, in the case of procurement, buying the same or better for less), which can dwarf the efficiency savings (doing it quicker or cheaper). Also, the efficiency savings in procurement are often less (perhaps 20–30%) because the resources will need to be located across regional locations to support language requirements, not just in far eastern low-cost locations; hence, average savings will be less than the 40–50% above (Figure 1).		However, the business case for procurement is about sourcing and compliance savings, i.e., effectiveness savings (doing it better or, in the case of procurement, buying the same or better for less), which can dwarf the efficiency savings (doing it quicker or cheaper). Also, the efficiency savings in procurement are often less (perhaps 20–30%) because the resources will need to be located across regional locations to support language requirements, not just in far eastern low-cost locations; hence, average savings will be less than the 40–50% above (Figure 1).

−	[[File:Example of BPO procurement business case.png\|thumb\|~~1024px~~\|left\|alt=Example of BPO procurement business case.\|Example of BPO procurement business case.]]	+	[[File:Example of BPO procurement business case.png\|thumb\|800px\|left\|alt=Example of BPO procurement business case.\|Example of BPO procurement business case.]]

@@ Line 1: / Line 1: @@
 {{DISPLAYTITLE: How to go about Business Process Outsourcing}}
-== Introduction ==
+=== Introduction ===
 The great interest in outsourcing since the start of the 1980s had several causes and was influenced in numerous ways by process work. In this chapter, we will focus on what business process outsourcing is, why it is applied, and which aspects to consider before implementing business process outsourcing strategies in an organization.
@@ Line 9: / Line 9: @@
 In the 1990s, as organizations began to focus more on cost-saving measures, they started to outsource functions necessary to run a company, but not related specifically to the core business. Managers contracted with emerging service companies to deliver accounting, human resources, data processing, internal mail distribution, security, plant maintenance and the likes as a matter of good housekeeping. Outsourcing components to affect cost savings in key functions was yet another stage as managers sought to improve their finances.

@@ Line 9: / Line 9: @@
 In the 1990s, as organizations began to focus more on cost-saving measures, they started to outsource functions necessary to run a company, but not related specifically to the core business. Managers contracted with emerging service companies to deliver accounting, human resources, data processing, internal mail distribution, security, plant maintenance and the likes as a matter of good housekeeping. Outsourcing components to affect cost savings in key functions was yet another stage as managers sought to improve their finances.
 '''Document''': [[Media:Business Process Outsourcing.pdf|Download the Business Process Outsourcing document]]
-[[Category: BPM Concepts & Method Knowledge]]
+[[Category: Process Management and Process Optimization]]