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| Thought Paper |
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BPO - Destination India |
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| Abstract |
Business Process Outsourcing (BPO) is a structured arrangement between an organization and an
outsourcing partner to perform services, otherwise conducted in-house. The provider of the
outsourced services takes primary responsibility ensuring the process works, simultaneously
dovetailing with the rest of the organization's functions and delivering the required results.
Until five years ago, BPO was a means to achieve cost efficiencies in transaction intensive back
office business processes. Organizations used to outsource non-core activities to partners who had
built a core competency in that area. This resulted in both tangible benefits like reduction in cost, and
intangible benefits such as focusing on more "strategic" issues.
In contrast, BPO is now emerging as a key management tool, the focus of which is expanding
beyond the "non-core areas", giving an organization flexibility to achieve a certain set of tactical and
strategic goals. Organizations opt to undertake BPO because it offers them advantages of cost,
speed to market, competitive capabilities, stimulus for growth and both the time and space to focus
on their own core competencies.
While outsourcing is becoming an accepted universal business practice, organizations must install
adequate safeguards before they entrust external agencies with critical applications and company
information. Prior to taking an outsourcing decision, an analysis of the different perspectives with
their respective benefits and drawbacks must be considered. Outsourcing can encompass a wide
range of services, from a single project for a technical domain to all activities. Each situation requires
a different understanding of the priorities, measures, costs, and the benefits involved.
Today, BPO is all encompassing, as organizations outsource entirely their business processes to a
partner. As the scope of BPO increases, so does the level of complexity involved in managing
partnerships, structuring deals, and capturing values. Consequently, older paradigms of BPO no
longer hold true. For BPO to be successful, organizations must evolve their own paradigms based
upon their unique situations.
The aim of this white paper is to look at the issues involved in outsourcing, including the choice of
location vis-à-vis outsourcing and the parameters that help in evaluating potential partners for
outsourcing key business processes.
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