Business Process Outsourcing - An Overview

Business process outsourcing is not a new term to businesses or companies. It has become the latest buzz in every sector and today more and more companies are outsourcing their non-core and core businesses to other companies which have expertise in that field. Outsourcing is a process or a business strategy implementation wherein the services or processes of a company are outsourced to a third party for a better and efficient management. This strategy would save the company’s time in a considerable manner while increasing the efficiency of the processes as the other company has expertise in that particular process and can efficiently manage those operations.

What are the processes to be outsourced?

Though outsourcing is a beneficial implementation, the main question to ask yourselves how to identify business processes which should be outsourced. There are two types of processes in any company, core processes and non-core processes. Core processes include the main processes a company deals with. For instance, manufacturing computers and computer peripherals is the core process of a computer firm. Maintaining telecommunication system, maintaining the HR system, payroll, transportation and procurements can be some of the non-core processes the company handles. While the company concentrates on the manufacturing processes, it becomes difficult to handle the transportation system. Outsourcing the transportation system to another party which deals exclusively with logistics can effectively handle this non-core process. When the company is free of these non-core processes, it can concentrate on the manufacturing segment to produce efficient and reliable products.

 There is no standard formula to determine which processes are to be outsourced and depends on various factors which vary from company to company. Here are few considerations to be followed while identifying outsourcing processes.

Differentiating Core and Non-core Processes

The first and foremost thing to do is to differentiate core processes from non-core processes. Prepare a list and identify the key aspects within them. At times, there are few processes which require confidentiality. Identify such processes and write them aside to come to an informed decision.

Determine the exact savings

After identifying non-core processes to be outsourced, determine the amount of work and savings involved in that process. Make sure that there is a considerable difference in terms of time and savings if that process is outsourced.

Processes needing physical environment

There are few processes involved in an organization which need a physical environment and these processes cannot be outsourced. Moving this infrastructure is not recommended and hence the idea of outsourcing is not feasible.

Savings is not the priority

Many times people tend to look at outsourcing as an option to increase savings. Though this is an advantage with outsourcing, it should not be the priority. You should always look at the efficacy, customer service and consistent performance while maintaining quality standards.

After performing a heuristic analysis, prepare a list of processes which can be outsourced. Identifying the best company to outsource your processes and services is the most important aspect in this implementation. You need to make sure that you are handling your company’s reputation to a team which has expertise and efficacy in maintaining the quality benchmarks.