Wednesday, April 13, 2011
Outsourcing Is Picking Pace
by: Mansi gupta
BPO or Business Process Outsourcing is a very common and mushrooming phenomenon these days. BPO can be defined as the accomplishment of a business task from some outside agency. For instance a company can ask or hire an external agency to maintain its old records and accounts. The phenomenon of outsourcing was not so well established before a decade. Initially some of the relatively small and low grade jobs like old storage record of the company were outsourced in United States. Gradually with the budding success and confidence, valuable and crucial jobs like payroll accounting, human resource tasks – recruitment, training and development of employees joined the fray.
Outsourced jobs most often involve the ones, which need to be performed on a regular or daily basis. The companies now no more perform such tasks which they used to perform themselves. Like hiring of a consultant company for training of new employees, getting advertisements made from an advertising firm across the seas.
Outsourcing has many benefits. It allows a company to identify and focus on its core competencies. The company can outsource every other task that can be taken up by outside agencies and that requires significant time and energy (like training of new employees, making recruitments, marketing and manufacturing of products etc.). This lends the opportunity to the company to fully concentrate on its core competency.
Along with this the low cost factor is equally important. The companies in US and Europe by outsourcing their jobs in countries like India, Japan and China accrue huge profits in terms of cost saving. Such savings in cost are in the form of cheap and skilled labor, manufacturing or production of the goods etc. This in turn is a result of variation in salary structure across the globe.
Outsourcing proves quite worthwhile and beneficial during the period of slump in a country’s economy. When profits are under threat and it becomes imperative to reduce the costs, outsourcing is perhaps the best way to mutilate the costs without compromising on the good quality of work. Besides this BPO also liberates big companies of labor oriented problems or issues, thereby enabling them to be more focused and streamlined to enhance their work.
There are various sectors in which outsourcing is holding grips. These are Financial sector, IT, Telecommunications, Advertising, Courier Services and Customer Support Services. A case in point can be Spectra mind that undertakes many of the crucial tasks (insurance, telecom etc.) for clients in US and Europe.
But the outsourcing process is not acceptable to everyone due to its complementary disadvantages. People often believe that outsourcing leads to drainage of jobs. It is believed to create an acute unemployment for the qualified professionals of that very nation. Moreover there the threat of delayed work failing to meet the deadlines and targets and most importantly that of leakage of confidential information is always lurking in overseas outsourcing. The companies also do not get to confront or communicate directly with their key clients which makes them all the more dependent on their offshore agencies.
Like every other phenomenon, outsourcing in business too has tail of ethics attached to it. However, the truth is that it is one of the best ways for a company to expand, enhance its growth and minimize the costs. But a company should not be just enchanted by the merits of outsourcing but should also be considerate of its pitfalls.
About the author:
Mansi gupta writes about Outsourcing topics. Learn more at http://www.outsourcingconcerns.com.
BPO or Business Process Outsourcing is a very common and mushrooming phenomenon these days. BPO can be defined as the accomplishment of a business task from some outside agency. For instance a company can ask or hire an external agency to maintain its old records and accounts. The phenomenon of outsourcing was not so well established before a decade. Initially some of the relatively small and low grade jobs like old storage record of the company were outsourced in United States. Gradually with the budding success and confidence, valuable and crucial jobs like payroll accounting, human resource tasks – recruitment, training and development of employees joined the fray.
Outsourced jobs most often involve the ones, which need to be performed on a regular or daily basis. The companies now no more perform such tasks which they used to perform themselves. Like hiring of a consultant company for training of new employees, getting advertisements made from an advertising firm across the seas.
Outsourcing has many benefits. It allows a company to identify and focus on its core competencies. The company can outsource every other task that can be taken up by outside agencies and that requires significant time and energy (like training of new employees, making recruitments, marketing and manufacturing of products etc.). This lends the opportunity to the company to fully concentrate on its core competency.
Along with this the low cost factor is equally important. The companies in US and Europe by outsourcing their jobs in countries like India, Japan and China accrue huge profits in terms of cost saving. Such savings in cost are in the form of cheap and skilled labor, manufacturing or production of the goods etc. This in turn is a result of variation in salary structure across the globe.
Outsourcing proves quite worthwhile and beneficial during the period of slump in a country’s economy. When profits are under threat and it becomes imperative to reduce the costs, outsourcing is perhaps the best way to mutilate the costs without compromising on the good quality of work. Besides this BPO also liberates big companies of labor oriented problems or issues, thereby enabling them to be more focused and streamlined to enhance their work.
There are various sectors in which outsourcing is holding grips. These are Financial sector, IT, Telecommunications, Advertising, Courier Services and Customer Support Services. A case in point can be Spectra mind that undertakes many of the crucial tasks (insurance, telecom etc.) for clients in US and Europe.
But the outsourcing process is not acceptable to everyone due to its complementary disadvantages. People often believe that outsourcing leads to drainage of jobs. It is believed to create an acute unemployment for the qualified professionals of that very nation. Moreover there the threat of delayed work failing to meet the deadlines and targets and most importantly that of leakage of confidential information is always lurking in overseas outsourcing. The companies also do not get to confront or communicate directly with their key clients which makes them all the more dependent on their offshore agencies.
Like every other phenomenon, outsourcing in business too has tail of ethics attached to it. However, the truth is that it is one of the best ways for a company to expand, enhance its growth and minimize the costs. But a company should not be just enchanted by the merits of outsourcing but should also be considerate of its pitfalls.
About the author:
Mansi gupta writes about Outsourcing topics. Learn more at http://www.outsourcingconcerns.com.
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