Management and Information System

COMP 4153

Business Process

Outsourcing

What is Outsourcing?

To procure (as some goods or services needed by a business or organization) under contract with an outside supplier.

Outsourcing

is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business functions (or processes) to a third-party service provider.

Business Process Outsourcing (BPO)

BPO is the process of hiring another company to handle business activities for you.

Back Office Outsourcingwhich

includes internal business functions such as human resources or finance and accounting.

- which includes customer-related services such as contact center services.

There are 2 categories of BPO…

Front Office Outsourcing

Offshore OutsourcingBPO that is

contracted outside a company's country.

BPO that is contracted to a company's neighboring (or nearby) country.

Nearshore Outsourcing

Knowledge process outsourcing (KPO) and legal process outsourcing (LPO) are some of the sub-segments of business process outsourcing industry.

KPO includes those activities that require greater skill, knowledge, education and expertise to handle.

LPO is the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company (LPO provider).

In 2010, the Philippines surpassed India as the largest business process outsourcing industry in the world.

Trivia

Legal and Knowledge

The Benefits Of Business Process Outsourcing

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.

Increase a Company’s Flexibility

A company is able to focus on its core competencies, without being burdened by the demands of bureaucratic restraints. . Focusing more on one of these drivers may help a company create a competitive edge.

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.

BPO 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.

Therefore…

The Limitations Of Business Process Outsourcing

A failure to meet service levels, unclear contractual issues, changing requirements and unforeseen charges, and a dependence on the BPO which reduces flexibility.

They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality Improvement approaches.

Threats

Outsourcing of an Information System, for example, can cause security risks both from a communication and from a privacy perspective.

Risk

In order to manage outsourcing in a structured way…

Maximizing positive outcome.Minimizing risks.Avoiding any threats. A Business Continuity

Management (BCM) model is set up.Business Continuity Management (BCM)-

consists of a set of steps, to successfully identify, manage and control the business processes that are, or can be outsourced.

Thank you!Paulyne C. Flores

BSHM2-1D