Business process outsourcing is a method of contracting a certain work process or procedures to an external service supplier. The outsourced services may include accounting, payroll, telemarketing, information management, social network marketing, client support, and many others. Outsourcing these or any other business process allows the company to focus on its core activities rather than having to maintain too many departments or personnel. By outsourcing, the company saves on the expense of salaries for the employees and other operational costs. This enables the company to focus on its core business and provide quality products and services to clients.
What are the uses of business process outsourcing?
One of the most common uses of business process outsourcing is in the area of payroll. Businesses that outsource payroll have the advantage of getting skilled professionals at a significantly lower cost than they would be able to afford if they hired their own payroll employees. A typical business process outsourcing program includes processing and storing employee payrolls, providing reports based on the data, collecting payments, processing refund checks, and making final contact with the employee. Many outsourcing companies also specialize in providing payroll services to small businesses. These types of business functions can greatly enhance the performance of a small company by decreasing employee turnover, increasing productivity, and reducing expenses. Another popular business process outsourcing service is in the area of information technology. Some outsourcing vendors specialize in specific areas such as application development, online shopping systems, Website development, or e-commerce. Others provide general computer programming services, database integration, optimization, or website maintenance. Regardless of the specific function, a business can find a vendor that specializes in that area.
WHAT ARE THE MAJOR BUSINESS PROCESS OUTSOURCING COUNTRIES?
India is emerging as a major provider of outsourcing activities. Many countries in South Asia such as India are experiencing rapid economic growth and prosperity. In addition, labor costs in India are lower than in the United States, Europe, and Asia-Pacific countries. In response to this situation, many businesses are electing to outsource functions such as call centres and social media optimization to countries in South Asia such as India. In terms of outsourcing functions such as call centres, business process outsourcing in India provides many cost savings options. For example, a call centre operating in India may not need to pay employees onsite because the number of workers employed is low, and the overhead is minimal. Call centres in India can purchase equipment and supplies in their country of origin at a much lower cost than what an American or European company would incur. Outsourcing employee payroll processing and maintaining employee records is another cost savings activity that can be outsourced to India.
In addition, many Indian companies are capable of employing a larger workforce than is required in the United States and Europe. As a result, many outsourcing companies are now offering payroll services that can help U.S. companies streamline their payroll functions, which generally include processing and collecting federal tax data and preparing employee checks. Outsourcing payroll services allows a business process outsourcing company to operate in a local area where labor costs are lower. This means that outsourced payroll may be required to hire locally or to have employees that live in the United States. Many Third World countries are also able to maintain high levels of productivity due to lower-than-normal labor costs, which tend to make them less dependent on imported goods and services. However, business process outsourcing in India provides an opportunity for U.S. companies to tap into the lower-cost specialized work available from India. Specifically, specialized work may include computer programming, accounting, health care, engineering, financial services, manufacturing, and the likes. In order to tap into the specialized work force of India, it makes sense for companies to outsource tasks that require programming knowledge or experience to programmers who are native speakers of English. In the case of health care and other areas in which the English language is a second language, outsourcing firms in India can be hired to set up virtual offices in such countries where healthcare providers are plentiful.
Conclusion
The U.S. business process outsourcing industry is now experiencing growth at a faster pace than ever before. While some of this growth is due to the recession and slower growth in many of the developed countries, much of it is a result of the company’s expanding their business functions beyond traditional office-based processes. Outsourcing the collection, processing, collection and submissions of paper work in the medical care sector is one example of such expansion. Similarly, a firm could consider using an outside firm to handle data entry tasks, particularly data entry performed directly from software programs instead of entering information manually.
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