Advantages of Business Process Outsourcing Services

BPO or Business Process Outsourcing is a form of easy task management available to big and small companies whereby the parent company leverages on the technical expertise provided by service providers in various third world countries in order to fulfill a job or task that was once undertaken by the parent company itself. In simpler words, it is the process of shifting a job to an external company that might have a totally different physical address.

Generally, services that are most suited for business process outsourcing include billing, data entry, payroll processing, call center and so on. These are tasks that are vital to the survival of the organization but they do not contribute to the overall productivity. But they do need special training and expertise.

Typically, a good part of the total outsourcing volume is coming from developed economies like the US, UK and other nations. Third world nations like India, Philippines, Malaysia and China take up the outsourcing work. The reason for this is simple. These countries have a large pool of educated people who can speak fluent English. These people receive accent and technical training needed to handle multinational requirements. The youth here can take up work for a much lower salary than their counterparts in developed nations.

Business process outsourcing services provide a win-win situation for both parties in the deal. The parent company can utilize their resources for development activities. They can book higher profits as their operational costs are down. At the same time, they can still boast of very high quality in work because service providers are well educated and trained. They can also afford to recruit more labor as the cost is low and can thus offer much better quality of work than they could otherwise. On the other hand, service providers can trade their technical expertise for a steady stream of work and decent pay. A large volume of much needed jobs are generated.

Business process outsourcing services are evolving as time goes by. In the early days, jobs like payroll processing were outsourced. Soon, more complicated, non-core tasks like benefits management, cataloging, indexing and media analysis were included. Many administrational and financial processes are also being outsourced. Certain tasks relating to the HR department too are being outsourced. In the coming years, more and more repetitive tasks are likely to be outsourced as companies utilize maximum resources to improving their core competencies.

Skilled professionals are necessary for the success of any outsourcing partnership. Competent service providers generally have the backing of world-class infrastructure, knowledge and expertise. If you choose an experienced and reported service provider, you can be sure of receiving services that are carried out in the most professional manner.

Business Process Improvement - Eliminating Bureaucracy

You can use several different techniques to improve a business process and you should put eliminating bureaucracy at the top of the list. Do you remember Jack Welch calling bureaucracy "productivity's enemy?" Seems very fitting!

In a business process, bureaucracy requires following a complex series of activities that hinder the process. We have all seen bureaucracy and red tape continually added to a business process. Bureaucracy does not happen all at once, but rather incrementally over time. The process can easily become bloated, making it ineffective, inefficient, and inflexible.

You might wonder, because bureaucracy seems so counterproductive, how it can have any advocates. You can normally trace the cause of bureaucracy to either the need for excess control, the fear of making a mistake, the desire to cover our backs in case something goes wrong, or simply something that grew over time.

Even though no one outwardly admits to supporting bureaucracy, you will run into resistance as you work to eliminate it because of the fear of the unknown and the inclination of human nature to just carry on doing things in the same old way.

So, how do you go about eliminating bureaucracy? After drawing a process map of the current state, walk the project team through the map activity-by-activity and ask if bureaucracy exists in each step. If it does exist, use a blue highlighter to color the box on the map to denote bureaucracy. You should move slowly through this step. If everyone immediately says that no bureaucracy exists in a step and you think it does, you may have to force the project team to feel uncomfortable. Hesitate. Do not say anything for a few minutes. You will start to see the project team squirming, but eventually someone will talk. You have to possess good facilitation skills to feel comfortable challenging a group, but you have to do it if you want to improve the process.

Think of the case where a process requires multiple approval levels. Are they needed? Could you reduce the number of approvals by fifty percent? If one of your goals is to reduce the time a process takes, then you should challenge the number of approvals required because this will shorten the cycle time (the time required to complete a process from its first to last step). Ask simple questions like, what would happen if the company eliminated some levels of approvals, would the world fall apart, is a particular employee incompetent, or would the next approval level not catch any possible errors?

Another filter you can use to eliminate bureaucracy is evaluating whether an activity supports a statutory, audit, legal, or tax requirement. If it does, then it may have to stay. You have to show a little caution with "audit" though because sometimes we audit too frequently. Validate the reason for the audit to determine whether it should continue. If it does remain, still ask if you can use a "spot" audit, instead of a full audit, where you only examine a subset of the data.

Bill Gates wrote in his book Business @ the Speed of Thought: Succeeding in the Digital Economy that "A rule of thumb is that a lousy process will consume ten times as many hours as the work itself requires."

Eliminating bureaucracy is one of the steps to improving a business process so that you can make it more effective, efficient, and adaptable.