BPO transfers all functions of functional departments (such as transaction processing, policy services, claims management, human resources and finance) to suppliers. Outsourcing providers manage these functions in their own systems according to service agreements. Some BPO contracts are paid according to the service level, which links the supplier's income with business performance or cost savings.
BPO is to outsource part of the company's business, that is, to hand over some businesses that were originally in charge of the company to external entities to complete. Therefore, there are trade-offs and choices between outsourcing business and external contractors.
The relationship between a company operating in BPO mode and an external contractor is a "long-term contract". That is, a long-term stable relationship with clear responsibilities and rights.
To realize BPO operation, there is only one starting point and ultimate goal, which is to increase the value of the company's shares, that is, to increase profits.
In a sense, outsourcing has existed for decades-especially in manufacturing, it is a means to reduce costs. The earliest attempts of outsourcing activities were mainly carried out by large enterprises, focusing on the field of information technology services.
With the development of network technology, high-speed data network and the increase of bandwidth capacity, the scope of outsourcing has expanded, including a series of management affairs, and enterprises can "unload" the whole business function.
The provision of BPO services involves finance, insurance, medical care, human resources, mortgage loans, credit cards, asset management, customer service, sales and marketing.
For a specific BPO service, its complexity is different, including basic management functions such as data entry or billing, and more complex transactions that require decision-making and problem-solving skills. With the increase of transaction complexity, the skill level required to provide BPO services is also improving.
superiority
Global labor arbitrage can save a lot of money from lower international labor costs, which may be the main motivation of offshore outsourcing. Cost savings from economies of scale and specialization will also encourage outsourcing, even if it is not offshore. Starting from 20 15, indirect income is increasingly becoming an additional driving force.
Speed of listing. Therefore, a new process is developed: "outsourcing outsourcing process". Management details of DuPont CIO? Cinda holman's $4 billion 65,438+00 outsourcing contract was outsourced by computer science company and Andersen Consulting Company, thus avoiding' invention, if we do this, it is an internal process'. ? A term developed later is tundish.
Outsourcing can provide greater budget flexibility and control, allowing organizations to pay for needed services and business functions when needed. It is generally believed that it can reduce the employment and training of professionals, provide professional knowledge, and reduce capital, operating expenses [34] and risks.
"Do what you do best and outsource the rest" has become an internationally recognized business slogan. This slogan was first "created and developed" by peter drucker, a management consultant, in the 1990s. This slogan is mainly used to advocate that outsourcing is a feasible business strategy.
As early as 1989, Drucker began to explain the concept of "outsourcing" in an article entitled "Selling the Mailroom" published by the Wall Street Journal.