Question

Explain the advantages of Business Process Outsourcing (BPO).

Answer 1

1. Productivity improvement: Educated or skilled people perform the task efficiently and thus improve productivity.
2. Optimum utilization: BPO enables optimum utilization of scarce resources.
3. Reduction in cost: Cost saving can be significant to any business. BPO not only helps to reduce costs but also increases productivity and increases revenues.
4. Improved human resources: Improved human resources is another great advantage of BPO. Outsourcing allows a company to get access to skilled and trained manpower at low rates.
5. Boost to Economy: Offshore outsourcing benefits the economy by increasing entrepreneurship, employment, and exports in host countries. For example, India has benefited significantly from worldwide outsourcing of IT-enabled services.
6. Expansion and Growth: Outsourcing reduces investment, allowing firms to focus on their core activities for expansion. Furthermore, outsourcing promotes information exchange and collaborative learning. It contributes to the preservation of a competitive advantage.
7. Benefits of New Developments: The outsourcer maintains a world-class IT infrastructure and stays up-to-date on industry advances. As a result, the client organization benefits from ongoing technological advancements.