BPO Basics: What Every Manager Needs to Know

You've heard the buzz, you've seen the deals that the Fortune 500 companies and your competitors are designing, but is your organization ready to reap the benefits of business process outsourcing (BPO)?

Before going any further, let's define the term BPO. BPO is the act of transferring some of an organization's repeated non-core and core business processes to an outside provider to achieve cost reductions while improving service quality. Because the processes are repeated and a long-term contract is used, outsourcing goes far beyond the use of consultants. If done well, BPO results in increasing shareholder value. The main difference between BPO and more traditional IT outsourcing is that BPO offers companies a way of achieving transformational outcomes much more quickly.

In a typical BPO contract, a service provider takes over a specific corporate function. Effective BPO encompasses much more than just changing who is responsible for performing the process. In BPO, the outside provider not only takes on the responsibility to manage the function or business process, but also re-engineers the way the process has been traditionally done. Re-engineering includes implementing new technology or applying the existing technology in a new way to improve the process. That tends to be the hard part.

As French poet Victor Hugo put it, "nothing in the world is so powerful as an idea whose time has come." BPO's time has come. Managing BPO relationships is a skill every manager will need to survive and thrive in the global economy. To better comprehend the management issues it is important to understand the basics.

Featured Research:

		BPO: Fad or Mega-Trend
		BPO Terminology: Organizing the Chaos
		BPO Evolution: From Time-Sharing to Offshoring
		Global Mega-Trends Shaping BPO
		BPO: Frequently Asked Questions