Business Process Outsourcing

Business process outsourcing (BPO) is a subset of outsourcing and involves using a third-party, contracted to perform specific, specialised processes on a company's behalf. Thus it essentially means handing over operations and responsibilities of specific business functions to a third-party service provider. What would otherwise be the work of an internal system or service is now purely handled by an outsider.

Business process outsourcing traces its history back to the 1800s. America used Scottish workers to help build wagons and ships, thus outsourcing them. Another outsourcing practice is called 'offshoring', i.e., when foreign countries perform BPO services. Popular offshoring countries include India and the Philippines, where skilled labour is much cheaper.

Today, several large companies and a majority of businesses indulge in business process outsourcing. Usually, the business outsources the "less important" work so that it can concentrate on its primary area of work. BPO services like technical support, back office services, telemarketing services, inbound customer care services and outbound call centre services are among the few services that are outsourced by companies today.

The objective of business process outsourcing is to typically reduce the workload on the company and also hope to cut costs by handing over the work to a third-party. Sometimes even the labour costs involved are different in different countries, which is why several companies outsource work to far off countries. A good example of this would be a London based company outsourcing its brochure content work to India, since the labour is cheap yet creativity and good-quality work is available in abundance.

Usually, there are two types of BPOs, front office and back office outsourcing. Back office processes that are usually outsourced are billing, logistics and human resources. Nowadays, even claims processing at insurance companies are being outsourced to separate companies. Examples of front office outsourcing include technical support, customer service, marketing, and advertising.

BPO companies work in a similar fashion as a creative boutique. While they have a set of clients, their main revenue comes from work that is outsourced to them from larger companies and advertising agencies. Thus, when there are deadlines to meet or a huge proportion of work to be done, the easiest way to achieve this is to outsource it to a third-party. One of the biggest reasons that smaller outsourcing units thrive and earn a constant stream of revenue is because of the larger organisations that have reputed, large companies as clients.

With the IT industry booming in India and people recognising the numerous strengths of India, organisations throughout the world are outsourcing their services to outshore countries like India. It is also good to know that the Government of India has also taken positive steps and several initiatives to urge India into to recognising its true potential.

Reasons to Automate Business Processes in Your Organization

Since the days of the automaton, workers have been searching for ways to automate the manual business processes that steal time from more important jobs. Communicating with colleagues, manipulating spreadsheets, entering customer information into a CRM... these are all examples of time-consuming manual processes that can be done better and faster by someone (or something) other than you (no offense).

If your idea of fun is copying and pasting text all day then by all means, continue doing what you're doing. Your competitors will love that. But we've got some thoughts on why you should at least consider automating business processes in your organization. Here are a few.

Reason 1: To Err is Human. It's Also Expensive.

In a compilation of error rates by business task*, as reported by studies over the last 30 years or so, error rates for medication prescriptions were found to exceed 1.6%. Data entry error rates for expert typists ranged as high as 6%. In general, the human mechanical (I.e. by hand) error rate for data entry tasks is 0.5%. Seems small at first, but what if you're entering order data from 100 online transactions into your CRM? Or, if you're compiling stock performance for 100 different mutual funds from an online investment website? What if you're changing prescription doses for 100 patients? That's 5 errors that have the potential to cost you money and maybe lives. You can expect to make 5 errors per 100 records any time you're manually changing information. The fun part is: You'll never know which records or pieces of data will be wrong. Get yourself an automated solution that enters and changes data for you automatically, and you'll never have to worry about data errors again.

Reason 2: Have Time to Kill? Neither Do I.

Here's the great thing about never making an error: You don't need to waste time fixing them. If you're lucky enough to catch an error (see #1 above), and it's a critical one, you'll need to go back and do the job again. In some industries like health insurance, where the cost of a reprocessed claim is 4 times that of one that gets approved the first time, that rework time can be a killer

Think of an automation software solution like a "digital employee" - someone who basically does the most unpleasant parts of your job for you so that you're free to do other things. Digital Employees generally work faster than humans in most web or Windows applications, so more gets done faster without rework. Even if it DIDN'T work faster, you'd still be free to perform other tasks while your software solution did all the typing, copying, and pasting. Automation basically returns 100% of the time spent on manual business process back to you so that you can go serve customers, win business, or take a vacation.

Reason 3: It's Easier Than You Think.

A good automation software solution can be installed and put to work inside of a few hours. Sure, there are some solutions out there that require coding or programming to operate, but the kind you're looking for can be "taught" to perform tasks simply by clicking and dragging your mouse to objects on the screen. The software should then present you with a narrow list of actions that work with the object you've targeted. You shouldn't have to scroll through 200 possible choices when all you need to do is click a "Submit" button.

Automation software solutions that actually work like "digital employees" use a series of steps (called a script) to perform a task. They work off of those scripts diligently because it's what you have told them to do. And they do it flawlessly. If concerns over learning curves and installation times are preventing you from automating your workflows and business processes, choose the right solution and put those fears to rest.