What is BPO (Business Process Outsourcing)?

Business process outsourcing (Business Process Outsourcing) is the outsourcing of some repetitive non-core or core business processes to suppliers to reduce costs and improve service quality. Because the process of conducting BPO is repetitive and takes the form of long-term contracts, BPO goes far beyond consulting. If BPO is successful, it can add value to the company. The difference between BPO and traditional IT outsourcing (ITO) is that BPO can help companies complete outsourcing faster.

BPO business process outsourcing services

In order to enter the BPO industry, enterprises should start with basic, low-risk services, and after accumulating experience and technology, then move to providing more complex services. BPO service providers should have a website on the Internet, an office in the client's country, and gradually establish partnerships with major global outsourcing companies in order to gain a foothold in this industry.

Governments in developing countries should provide appropriate and convenient telecommunications infrastructure and means of using such facilities, establish a supporting legal and regulatory framework, and provide financial incentives to promote the development and growth of BPO services.

In today's competitive business environment, companies in various countries will use basic tasks and allow resources to be effectively used for strategic tasks and core parts. With our knowledge resources and cutting-edge technology, Living Tree can help customers manage their non-strategic processes, allowing them to focus on the core parts, and to effectively maintain their daily operations under economic principles.

A proper understanding of terminology is a prerequisite for doing anything well. This section will provide a BPO terminology and explain each term in detail.

1) Business Application Outsourcing

Company A (vendor) leases the software to company B (user). Enterprises are increasingly acquiring software such as ERP, CRM, messaging and collaboration, and e-commerce through leasing. Vendors provide hosting and management of important enterprise applications. The purpose of this is to reduce the daily management work of the enterprise and reduce the total cost of ownership (TCO). Vendor hosting services ensure application performance and reliability. This is also called

ASP services.

2) Business Process Outsourcing

Business process outsourcing means that the company checks the business processes and the corresponding functional departments, outsources these processes or functions to the supplier, and the supplier reorganizes these processes. BPO transfers all functions of the functional department (such as transaction processing, policy services, claims management, human resources, finance) to the supplier. Outsourcing vendors manage these functions in their systems based on service agreements. Some BPO contracts are paid based on service levels, linking supplier revenue to business performance or cost savings.

3) Business Process Offshoring

Business process offshore outsourcing is the transfer of business tasks (such as medical transcription) or business processes (such as call centers) to low-cost countries (such as India, the Philippines). The interaction between the supplier and the enterprise is mainly carried out through the telephone and the Internet. Offshore outsourcing usually includes tasks such as accounting processing, credit card processing, call center, translation, transcription and so on. Most tasks do not require interaction with people. Offshoring of support functions is relatively rare. The trend of offshore outsourcing began in the 1980s, accelerated in the 1990s, and peaked in 2000. As global economic growth slows, offshore outsourcing has become an effective measure to save costs.

4) Business Transformation Outsourcing

Enterprise transformation outsourcing is a natural extension of a more tactical BPO model, which involves the outsourcing of all logistic functions, as well as a comprehensive outsourcing of enterprise transformation management processes. Its purpose is to maximize the long-term benefits of BPO operations and carry out a comprehensive corporate transformation. Transformation outsourcing is not a tactical issue, but a forward-looking strategic change tool. Its theoretical basis is: Only through enterprise transformation can a large-scale performance improvement be achieved.

5) Multioutsourcing

Multi-party outsourcing is the outsourcing of different business processes to multiple BPO vendors. For example, outsourcing human resources processes to the supplier that is best at it, and outsourcing logistics to another supplier, IT development and maintenance is another supplier. Multi-party outsourcing is mainly to avoid too high risk and to avoid being stuck on one supplier to achieve the best combination of advantages.

6) Shared Services / Insourcing

Shared services are some form of "insourcing" that allow companies to achieve specific economies of scale by creating independent internal entities to perform specific services (such as payroll management, accounts payable, and travel expense processing). Typical shared services can use companies' applications and other technologies to help companies further improve the quality of their processes (such as finance, accounting, procurement, IT, human resources).

The core idea of shared services is:

New technology can

a. Benefit scarce skills resources more effectively;

b. Provide services and information more effectively;

c. Reduce management costs.