Business process outsourcing: the latest buzz
The most ringing these days is customer service and call center outsourcing, also known as BPO (Business Process Outsourcing). The market for offshore outsourcing (to low wage countries) is growing with a whopping 40% this year. Now is that phenomenal or what.
In these days of tight budgets and heightened attention on ROI (Return on Investment) and TCO (Total Cost of Ownership), companies are taking a good look at what they are in business for, and what they are best in. This focus on the core business has lead to the selling of complete branches of companies. Now, businesses go even further by taking a look inward, in search of generic processes to outsource, because now they want to focus only on the core areas of their strength.
Benefits of Business Process Outsourcing:
1.The #1 reason for outsourcing is, of course, to lower costs. Outsourcing companies can have lower rates because of the greater efficiency, but also through economies of scale, which actually means that fewer personnel is needed for servicing the combined contracts than when each company would organize it themselves.
2. Lets companies focus on core areas of their work.
3. It’s easier mix more junior and senior staff, which is a near to impossible feat if you have just two customer service reps!
Pitfalls of outsourcing:
1.Outsourcing projects often fail on unclear expectations at both the customer and service provider.
2. Anxiety for outsourcing is often fed through the loss of operational control. You no longer handpick customer service personnel, and you are much more limited in directing the service. Also, you may have to fit in the standard approach of the service provider.
Advent of offshoring:
With the advent of off shoring, a lot of vendors are now operating the market. Although the cultural differences can be enormous, especially when outsourcing to India. Looking at both the benefits and pitfalls of outsourcing call centers and customer service, it is clear that there are clear opportunities for reducing the level of costs for organizations, however with its own risks.
