Business Process Outsourcing

BPO is a type of outsourcing wherein a third party service provider is employed to carry out one or more functions for a company. There are both specialized and non-specialized agencies who provide these services in return for pay/commission. The former is specialized for one particular type of service like HR or accounting while the latter ones provide chain of services ranging from production to after sales service.

Mostly small but also few big organizations outsource their non-core operations because of following advantages it offers:

i) Customized Solution

ii) Cost cutting- in house maintenance of staff or technology not required

iii) Negligible requirement of infrastructure facilities

iv) Speedy operations and skilled manpower

v) Resolution of communication problems like in case if the process is required to be performed in totally different environment than that of company.

However, with every pros, comes cons. The biggest con here is lack of personal touch with employees working for the organization. BPO companies are given targets and a fixed pay. In return of the same, they have to deliver desired results by hiring employees of their choice as per their budget requirements. So, BPO companies often exploit employees by hiring lesser number and taking most work out of them so that their profit margin could enhance and there is cost-cutting. Also, some of them do not provide proper infrastructure like laptops and internet connection, allows them to work from home and arrange all necessary things on their own. In this process, they keep hiring and firing frequently which ultimately affects the quality of service at ground level. This is most common in case of customer service outsourcing wherein the company does not exactly get to know that went wrong. It is only after heavy decrease in number of customers that they realize that something is wrong at ground level from BPO’s side. It leads to lack of direct control from company.

So, following points need to be considered before outsourcing of business processes:

1. Policy on data security be signed.

2. Provisions for unforeseen costs be made

3. Outsourcing for long-term may lead to overdependence on BPO.

Hence, if according to business needs advantages outweigh disadvantages, then the company may go for outsourcing. However, even if full trust is there still some policy should be adopted so that regular communication with employees of BPO who are handling company’s work can be maintained.

By CS Bhavya Taneja

Bhavya Taneja
Bhavya Taneja
Bhavya Taneja is a Practicing Company Secretary, speaker on various academic and non-academic topics and a writer. She has an experience of 8 years as a professional and 5 years as a faculty of Economics. She has authored a book of quotes called 'Crisp Talkings' and is actively involved in social welfare activities as well.

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