Wednesday, April 11, 2012

The Business Case for Business Process Outsourcing


  • Cost Cutting
Process outsourcing has been used for times in memorial to enhance shareholder value via controlling costs and avoiding capital expenditures associated with purchase of new systems and up gradation. These savings can then be channeled into core areas of the company. Various studies have indicated that for every one dollar invested in BPOs across India, the value derived by the US economy is between $12-14. The best example for this is in the field of pharma research and development where firms can reduce the cost of developing a new drug, currently estimated at between $600 million and $900 million by as much as $200 million if development work is outsourced to India.
  • Improving efficiency and productivity
Conventionally, executives spend 80 percent of their time in management of details and only 20 percent on formulating strategies. But the scenario is remarkably different when the business process is outsourced. Once a process is successfully outsourced, the ratio can be easily reversed. In such situations, executives get more time. This saved time helps them tremendously to explore new revenue areas, accelerate other projects and focus on their customers. This, beyond doubt, leads to productivity improvements. Outsourcing provides access to proprietary workflow systems, process reengineering skills and innovative staffing and delivery models, coupled with world-class technology and assurance of best practices delivered by experts which leads to productivity improvements without compromising on quality.

  • Focus on Core Competency
The current business scenario worldwide dictates that a successful company must have great core processes to just to stay in the game. Outsourcing is the only way a company can use its time and money on these vital processes and get better performance for non-core functions.

1 comment:

seo boss said...

Enlistment handle outsourcing to various nations adds to costs for organizations, yet the upsides of enrolling neighborhood labor and mastery as opposed to sending out ability crosswise over limits and bearing the issues related with exiles are clear as crystal. RPO recruitment process outsourcing

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