BPO

Business process outsourcing (BPO) is a form of outsourcing that involves the contracting of the operations and responsibilities of specific business functions (or processes) to a third-party service provider. Originally, this was associated with manufacturing firms, such as Coca Cola that outsourced large segments of its supply chain. In the contemporary context, it is primarily used to refer to the outsourcing of services.

An advantage of BPO is the way in which it helps to increase a company’s flexibility. However, several sources which have different ways in which they perceive organizational flexibility. Therefore 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[citation needed. This can help a company becoming 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

Advantages of Outsourcing

A few of the many advantages out of sourcing a work outside, is explained in detail below:

• Getting more time to concentrate on the major business aspects by the parent company
• Marked increase in the productiveness of work
• Weapon against demanding competition
• The portfolio effect
• Finally, the cost benefits