मराठी
CISCEISC (Commerce) Class 12
प्रश्नपत्रिका३७९
पाठ्यपुस्तक उत्तरे१८२१७
महत्वाचे प्रश्न आणि उत्तरे६२४१
संकल्पना स्पष्टीकरण आणि व्हिडिओ६३६
टाइम टेबल१६
अभ्यासक्रम

Overview of Outsourcing

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Estimated time: 27 minutes
CISCE: Class 12

Key Points: Concept of Outsourcing

  • Outsourcing means contracting certain business functions or processes to an external agency or third party.
  • It helps companies use the expertise and specialised services of outside service providers.
  • Outsourcing services are usually cheaper as specialised firms operate on a large scale.
  • It allows companies to focus on their core activities, thereby improving efficiency.
  • In outsourcing, there are mainly three parties involved – the outsourcer (company), the outsource (vendor), and the service provider.
CISCE: Class 12

Key Points: Parties Involved in Outsourcing

  • The outsourced is the external agency that agrees to perform specific business functions.
  • The outsourcer is the company that hires the external agency to carry out certain tasks.
  • The service provider is the agency or individual who actually performs the assigned work.
CISCE: Class 12

Key Points: Advantages and Disadvantages of Outsourcing

Advantages of Outsourcing

  • To the Outsourcer: Focus on core activities, cost reduction, less investment, and access to expert services.
  • To the Outsourced: Earning income, expanding client network, and better use of expertise and experience.
  • To the Service Provider: Better monitoring of performance and clear understanding of process costs.

Disadvantages of Outsourcing

  • To the Outsourcer: Risk of high fees and leakage of business secrets.
  • To the Outsourced: Uncertain repeat business and responsibility for maintaining quality standards.
  • To the Service Provider: Need to train employees and manage additional responsibilities.
CISCE: Class 12

Definition: Business Process Outsourcing

According to Gartner, "Business Process Outsourcing is the delegation of one or more IT enabled business processes to a third party that owns, administers and manages the business process according to a defined set of matrics".

CISCE: Class 12

Key Points: Business Process Outsourcing (BPO)

  • Business Process Outsourcing (BPO) means transferring certain business processes to an external agency for better efficiency and management.
  • It usually involves outsourcing non-core activities, such as security, housekeeping, payroll, or customer support.
  • The outsourced agency is generally a third-party firm, though sometimes a company may create its own captive unit to handle such processes.
  • The external agency manages the day-to-day operations of the outsourced function according to agreed terms and standards.
  • The service provider performs the work on a contractual basis and charges a fixed fee for the services rendered.
CISCE: Class 12

Key Points: Knowledge Process Outsourcing (KPO)

  • Knowledge Process Outsourcing (KPO) means outsourcing high-level knowledge work to external experts to improve quality, efficiency, and reduce costs.
  • It is the higher-end of BPO and focuses on knowledge expertise rather than routine process work.
  • In KPO, there is no fixed procedure to solve problems; experts develop their own methods and solutions.
  • It mainly covers non-core but specialised activities such as research, data analysis, legal services, and consultancy.
  • KPO requires highly skilled professionals with proper knowledge, experience, and analytical abilities.
  • India has become successful in KPO due to cost advantages, skilled workforce, and operational efficiency.
CISCE: Class 12

Difference Between BPO and KPO

Basis of Difference BPO KPO
Level of Expertise Low level of industry or domain expertise High level of industry or domain expertise
Nature of Process Repeatable processes, require quick learning Non-repeatable processes, require regular learning
Client Involvement Low involvement with clients High involvement with clients
Workforce Large workforce, can go up to thousands Smaller workforce with tighter teams
Billing Rates Low hourly billing rates High hourly billing rates
CISCE: Class 12

Key Points: Legal Process Outsourcing

  • Legal Process Outsourcing (LPO) means outsourcing legal work of a company to specialised law firms.
  • Business firms outsource legal matters because they may not have expertise in all types of laws.
  • LPO covers areas such as labour laws, taxation, corporate laws, funding laws, and marketing laws.
  • Companies hire specialised law firms for tasks like patent registration, trademark protection, and intellectual property rights (IPR) matters.
  • LPO is becoming popular because legal compliance is complex and companies cannot afford to violate laws.
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