Business Process Outsourcing Management Research Paper

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Innovation is an essential and enduring aspect of any human enterprise. Management of contemporary organizations is no exception. Amidst globalization and technological breakthroughs, the industrial economy that dominated the 20th century is slowly but steadily giving way to an information or knowledge economy. This new economy is characterized by a rapidly globalizing world, radical technological advancements, hyper competition, ever-changing business and management models, and associated constant change and uncertainty. Revolutionary technological developments in information technology, communications, production, and infrastructure have made it possible to produce goods and services in one part of the country, region, or indeed the world, for consumption in another part.

Accompanied by these changes, business process outsourcing (BPO) has quickly emerged as a key business strategy in the last decade or so. More than half of Fortune 500 companies are outsourcing and off-shoring to varying degrees, and others are actively considering them. According to Gartner, a research consultancy firm, the worldwide BPO market was worth $132 billion in 2006 (Singh, 2006). The most outsourced services included vertical industry operations, customer relationship management (CRM), supply management, human resource management, finance and accounting, payment services, and administration services. The main objectives of companies that considered BPO were to focus on business functions that helped to create competitive advantage, reduce costs, and improve service levels.

BPO is also very controversial. While business leaders heap praises on BPO’s merits and stress the necessity of BPO as a key sustainable competitive advantage, critics, including many political leaders and trade unionists, blame it for loss of jobs, especially when it includes off-shoring. BPO is not just a business strategy but encompasses broad economic, technological, and social aspects. While it is underpinned by technical innovations, its success depends on how the social and human aspects are managed.

Outsourcing essentially involves redefining the boundaries of the organization. It can range from peripheral activities such as security and cleaning to major organizational change with significant impact on organizational structure, employee skills, and performance management. If managed appropriately, BPO can result in significant performance improvements and productivity gains and offer strategic and competitive advantages to the organization.

As with any other management concept, organizations need to pay careful attention in evaluating whether outsourcing is beneficial and if so, in what areas. Once a decision to outsource is made, selecting an appropriate vendor and defining the relationship and performance parameters need to be carefully managed. Failure to manage the outsourcing process can result in serious consequences, such as decline in revenue, customer backlash, and employee demotivation. The success of outsourcing is in its governance. It is not a silver bullet to solve the internal organizational problems.

Overview Of BPO

What is BPO? Why is it important? How should it be managed? To answer these questions, one needs to understand the way business is conducted and the environment in which it is conducted. As a business enterprise evolves, it is structured into several functional areas for better organization such as design, production, materials management, logistics management, marketing, finance, and human resources. These functions, however, are interdependent and therefore, need to work together for the overall success of the organization.

Depending on the nature of the organization, the activities are divided into core and noncore functions. The core activities are central to the organization and have direct bearing on the success of the organization. The noncore activities are supportive or secondary functions. The division of activities is also dependent on how the organization defines its business processes. A business process combines various inputs to create an output that is of value to the internal or external customer. A well-defined business process is customer centric, that is, it is meant to serve the customer. It is designed to address many of the problems with traditional organizational structures which create a huge and unwieldy bureaucracy that impedes rather than addresses customer service.

Organizations need to continuously evaluate and improve business processes to suit the business environment in which they operate. The key considerations are reducing cost, gaining efficiency, and improving customer service. This calls for business process reengineering. One of the major reengineering initiatives in the recent past is outsourcing of noncore business functions. BPO refers to the shift of noncore business processes from internal management to outside third-party providers. The outsourced activities may not be the core part of an organization, but that is not to say that they are less important. For example, some of the most outsourced processes such as payroll and benefits administration and customer call centers are an important part of any organization but they are outsourced simply because a third party can provide them faster, better, and cheaper. Further, as organizations gain experience in outsourcing and develop maturity in managing the process, they may start outsourcing even their core functions and processes.

To understand why BPO is becoming so popular, let us look at the outsourcing of payroll and benefits administration. This function or business process is responsible for calculating and timely payment of wage and salaries and other employment benefits such as superannuation, leave administration, and medical expenses. Depending on the size and complexity of organizations, this function is run by a number of people using an appropriate information systems package with considerable fixed costs. While this function is important to serve the internal customers, that is, employees, it is a noncore function. Such functions are often better handled by third-party providers who specialize in such activities by servicing several companies at a time, enabling them to spread their fixed costs and achieve economies of scale. They also acquire specialist knowledge in how best to deliver these services and can invest in new technologies. Therefore, they are able to deliver the services cheaper, better, and faster.

Outsourcing is not just confined to large organizations. They may equally benefit small- and medium-sized enterprises (SMEs). For example, a small firm may decide to outsource such functions as billing and customer service, statutory compliance reports, accounting and taxation, human resource management services, and packaging and shipping. By outsourcing such activities, firms can tap into external expertise and technological advances without having to invest in them and maintain flexibility in the scope and scale of their operations. Even not-for-profit organizations, such as Red Cross, can better spend their money and offer faster and better services by outsourcing procurement and transport of supplies to remote regions of the world.

Outsourcing, however, is not right for every organization, every time, and every activity. As with any management concept, it is not just the idea but the way it is actually implemented that determines its success. Organizations and business leaders that embrace a concept simply because it is the latest fad, ignoring organizational realities, are bound to fail. Outsourcing is a complex process and can prove to be costly and damaging if not handled well. It requires a good understanding of what and when to outsource, whom to outsource to, and how to manage outsourcing on a sustainable basis. For example, if the corporate culture of the organization is characterized by blame shifting, internal politics, and learning disability, then outsourcing may actually complicate matters further. Short-term and narrow objectives such as cost cutting without considering long-term implications can result in serious damage to the future of the organization. That is why outsourcing is a strategic business decision and tool.

Driving Factors

Globalization

The business world is rapidly becoming a global village. The decline of communism as an economic ideology; growing regional trade agreements and alliances, such as the European Union (EU), North American Free Trade Agreement (NAFTA), and Asia-Pacific Economic Cooperation (APEC); growing influence of the World Trade Organization (WTO) in defining trade agreements and arbitrating trade disputes, and so forth have all contributed to what Friedman (2005) refers to as the “flattening of the world.” The 21st century is most likely to be dominated by Asia with China and India quickly emerging as economic giants.

Comparative Advantages

According to Ricardo’s (1821) economic perspective, nations should compete with each other based on the relative advantages they derive from their natural resources, geography, intellectual capital, and so forth. For example, Singapore’s Changi Airport has emerged as the Asia-Pacific hub for airlines primarily due to its location aided by entrepreneurial spirit and government support. India, which is home to more than a billion people, half of whom are under 25 years of age, produces several million university graduates every year, most of whom speak English and a considerable number who specialize in science, engineering, and technology (SET). In contrast, a majority of the Western countries have aging populations and suffer from skill shortages in SET. It is no wonder Indian workers are in demand worldwide for their skills. The difference in time zones across the world is another advantage of outsourcing and off-shoring. For example, most of the Indian call center operations take place at night time to cater to day time customer service in the United States.

The comparative advantages between nations and firms keep changing depending on circumstances and accordingly, they need to pursue their economic interests. For example, the Asian Tigers such as Singapore and Taiwan started as low-wage countries to attract direct foreign investment, but as their economies grew and became developed, they started outsourcing to other low-wage countries such as China. In recent times, China has emerged as the manufacturing hub of the world, and India is quickly becoming the services hub. India is called the “electronic housekeeper of the world” in recognition of its dominance in information technology (IT) and information technology enabled services (ITES) such as call centers.

Technology Trends

Transformational advances in transportation, production, information, and communication technologies have accelerated outsourcing in the manufacturing and service industries. For example, broadband Internet, enormous and secure data storage capabilities, analytic software, collaborative technologies, and so forth have revolutionized global information and communications enabling outsourcing and off-shoring in the information technology industry.

Global Pool of Creative Talent

Creativity and innovation are the lifeblood of the knowledge economy. With ageing populations and growing skill shortages, the Western economies are increasingly dependent on the global pool of knowledge workers. According to Florida (2002), creative people are highly mobile and willing to relocate for the best social, cultural, and economic opportunities anywhere in the world. The multinational corporations are therefore setting up their research and development (R&D) centers in places such as India, China, Ireland, and Israel, where there is a relatively abundant supply of scientists, engineers, and technologists.

Public Sector Reforms

In countries with liberal democracies, widespread public-sector reforms have resulted in privatization and liberalization of public services in order to strengthen accountability for public expenditure and better returns on investments under competitive market conditions. These policies have often led to outsourcing of public services and civic amenities, such as electricity, water, education, health, and garbage collection to private providers. The public tender process for these services is aimed at awarding the service contract to the best bidder who can provide quality service at the least cost.

Hyper Competition and Demanding Customers

With increasing globalization, markets have become extremely volatile and competitive. Accordingly, organizations are being forced to cut costs to the minimum and strive for the best possible returns for shareholders, failing which investors will withdraw their investment and go elsewhere in search of better returns. Further, consumers are becoming increasingly demanding and sophisticated. Market-savvy customers search for products and services that meet global standards in quality, cost, and features. Outsourcing is increasingly seen to be a key business strategy to achieve maximum returns on investment and meet customer expectations.

Focus on Core Competency

Division of labor and specialization of tasks were two of the key scientific principles of management that dominated the 20th century industrial economy. In contemporary firms, streamlining or standardizing business processes across the organization results in restructuring of the organization to focus on activities in which the organization has core competency and outsourcing the rest.

Changing Organizational Structures

A bureaucratic organization with traditional hierarchical boundaries between departments and functions leads to waste of scarce resources, such as money, time, and efforts with duplication, poor quality, and cost blowout. Today’s quickly moving and changing world calls for flexibility and agility. Autonomous and cross-functional teams that facilitate networking and cooperation between people, jobs, and units by becoming flatter, more flexible, and responsive are therefore replacing bureaucratic structures. With reengineering of business processes and restructuring of work units, organizations are in a better position to determine which functions need to be carried out in house and which need to be outsourced.

Types of BPO

Outsourcing can be classified based on the location of the outsourcing provider or vendor, that is, where the work is performed. It can be on-site, that is, on the client’s premises or off-site, where the vendors operate on their own premises. Off-site operations can be

  • onshore, where the work is conducted within the same country as the client—for example, a vendor based in a regional or rural area may service a client based in a metropolitan center by leveraging on locational advantages such as lower cost of living and infrastructure;
  • nearshore, where the work is performed in neighboring countries—for example, Canadian vendors servicing American clients or Eastern European countries offering low-cost services to Western European clients; or
  • offshore, where the vendor’s work location is in a country that is at a considerable distance from the client—for example, Indian and Chinese vendors servicing American and European clients.

In some cases, the vendor may operate both on-site and off-site at different stages of the project—for example, the information technology employees of a vendor may work on the client’s premises during the project-needs assessment and analysis stage, go away to do the coding work, and then come back for implementation and maintenance work.

Outsourcing may also be classified based on the breadth and depth of work being performed, such as

  • short term versus long term;
  • single-process functions versus multiple-processes functions;
  • low value, routine transactional work versus higher value, transformational strategic and knowledge-intensive work;
  • process-oriented work (i.e., routine, structured, and standardized work, such as payroll processing) versus project-oriented work (i.e., unique and loosely defined work, such as R&D); and
  • single vendor versus multiple vendors (also called, multi-sourcing) versus integrated vendor (different suppliers managed by a single vendor).

Functions That Are Most Outsourced

According to Srivastsava and Theodore (2006), some of the functions that are most outsourced are

  • IT: Systems integration and information systems consulting; Application development and support, IT training, and so on. In fact, IT plays such a pivotal role in BPO that almost all the functions covered by BPO are ITES.
  • Back-office data entry and processing; customer contact services (such as complaints, telemarketing, collections support).
  • Finance: Tax compliance and planning, financial systems application support, general and financial accounting, expenses processing, accounts payables and receivables, debt collections, financial reporting.
  • Human resources: Payroll and benefits management, superannuation administration, employee help desk, training, recruitment and selection support, human resource information systems (HRIS), and wage and salary administration.
  • Operations/logistics: Order tracking/claims/application/ payment processing.
  • Miscellaneous: Cleaning, security, catering.
  • Knowledge process outsourcing (KPO): Knowledge services and decision support (such as customer analytics, claims and risk management and consultancy); R&D services (such as engineering design, content development and new product design); other professional services such as legal research, engineering, aviation, medical diagnostics and transcription, and clinical research.

Risk-Benefit Analysis

Benefits

Cost savings. Outsourcing may result in significant cost savings in overheads, labor costs, production costs, and so forth. For example, in call center operations where employee costs are significant, Indian call center agents cost one tenth of their Western counterparts and claim to offer better productivity. Outsourcing providers typically specialize in certain activities and can achieve cost savings through economies of scale. However, cost considerations need to be carefully weighed against long-term impact and sustenance of cost advantage, loss of organizational knowledge, and likely customer and community backlash.

Performance improvements. By focusing and specializing on particular activities and skills, outsourcing providers often achieve better performance standards in customer service quality. These are reflected in the service level agreements and measured by performance metrics.

Flexibility. In a quickly moving and uncertain business environment, flexibility is the key to manage the markets. By outsourcing, organizations can better manage sudden surges or drops in demand for their products and services, fix short-term problems in skills and supplies, reach the market with new offers faster than competitors, and cut expenses by not having to invest in new and costly technologies.

Focus on core activities. By outsourcing peripheral activities, organizations can direct their precious and scarce resources toward activities in which they have core competency to better withstand market pressures and improve their profit margins.

Risks

Loss of control. Organizations generally have greater control on internal activities. When activities are outsourced, the vendor exercises primary control on day-today activities, and any failure on the part of the vendor will directly impact the client.

Potential loss of organizational learning. Innovation and creativity are critical in a knowledge economy. With outsourcing, employees with critical skills may be lost resulting in adverse effects on the ability of the organization to be innovative. The outsourcing providers may hold the key to new knowledge and exploit it to their advantage.

Managing costs. In evaluating any outsourcing proposal, the management needs to examine the sustainability of the perceived cost advantages in the medium to long term. Short-term gains may be offset by long-term losses. Poorly drafted service agreements can lead to unforeseen cost increases during the term of the agreement. If the performance expectations are not clearly spelled out or market conditions change unexpectedly, they may have serious implications on cost considerations. Many costs are intangible, such as potential loss of organizational knowledge and are difficult to quantify. There are also hidden costs such as the cost of managing the outsourcing arrangements, which may outweigh potential cost savings.

Cost of mismanagement. Outsourcing is often a major organizational change with serious implications for employee careers, organizational structure, and strategic capabilities. If mismanaged, outsourcing can cause irreparable damage to the future of the organization.

Management Of BPO

BPO is essentially managed by the client, that is, the organization is outsourcing the work, and the vendor, that is the external service provider performing the outsourced work. The client can be the whole organization or just part of it (e.g., an IT department), depending what and how much is being outsourced. The vendor, in most cases, is an external organization or as in some cases, a fully or partly owned subsidiary of the client. For example, IBM USA may outsource part of its work to IBM India. The nature and complexity of the relationship between the client and the vendor depend upon the size, scope, and importance of the project, that is the work being outsourced. For example, complex forms of work such as R&D are knowledge intensive, loosely defined, and involve multiple stakeholders over a longer period of time. Outsourcing of such work requires a more strategic and collaborative approach and a relationship between the client and the vendor. Therefore, this kind of work may only be outsourced after the vendor proves its credentials and trustworthiness to the client’s satisfaction.

To successfully manage outsourcing, the managers need certain skills and competencies, such as decision making in an uncertain environment, change management, negotiation and relationship building, conflict resolution, communication skills, cross-functional team management, and knowledge management.

Outsourcing is a process-driven approach. Rather than taking a sudden and serious plunge into outsourcing, organizations fare better when making incremental progress and learning from experience. They need to acquaint themselves with the entire project lifecycle starting with the strategic assessment of the case for and against outsourcing (for a detailed description, see Power, Desouza, & Bonifazi, 2006).

Building the Business Case

Every organization has its own unique context—the products and services it offers, the market environment, strengths, weaknesses, opportunities, and threats (SWOT), business strategy, and core competencies in relation to its competitors.

Business-Value Assessment

This begins with categorizing core and noncore competencies. By starting with outsourcing noncore competencies, organizations can minimize risks by taking an incremental approach. The top management team can lead and champion the process with its vision and holistic outlook. The decision to outsource needs to be in alignment with evolving business strategy. For example, a high-technology firm such as Microsoft may decide to focus on its core competency in product design and outsource the production process to competent vendors. It may also decide to collaborate with its vendors in researching and developing new technologies.

Operational Assessment

Mapping and assessment of process capabilities helps the organization identify performance metrics to test the competitiveness of a vendor’s proposal against internal and external best practices and then manage critical elements. While operational assessment can be a time-consuming process, it is a critical factor in the successful management of outsourcing.

Financial Assessment

This involves the assessment of fixed and variable costs, direct and indirect costs, and current and future costs. Outsourcing may help convert fixed costs into variable costs allowing the flexibility to adjust with fluctuating market conditions. For example, by outsourcing logistics and shipping, firms may reduce the fixed costs involved in the internal operations of the process. However, outsourcing involves certain hidden costs, such as managing the vendor contract and contingency planning as well as future costs, such as costs involved in terminating the contract if things go wrong. Financial assessment will determine whether the BPO contract is going to specify a fixed cost or a flexible fee-for-service or pay-as-you-use basis.

Risk Assessment

Outsourcing, by its very nature, is a risky and uncertain proposition. During negotiations, vendors may paint a rosy picture of their strategic capabilities, but only experience will tell whether they are true. If business conditions change drastically, the vendor contract may need to be thoroughly overhauled, which may adversely affect the pre contract assessment of the benefits of outsourcing. There may also be serious intellectual property issues that may sour the relationship between the client and the vendor. If the vendor is based in another country, legal recourse to dispute resolution may be weak and ineffective.

Other risks include operational risks such as inadequately trained employees of the vendor, technological risks such as data privacy and theft; and financial risks such as financial viability of the vendor. Once the risks are assessed in terms of probability of their occurrence and the likely damage they may cause, the organization needs to decide how much risk it is willing to bear and whether it is worth it.

If the strategic assessment results in the green signal to go ahead with outsourcing, the next step is to conduct a thorough analysis of the needs of the functions and processes that are likely to be outsourced and an assessment of the vendor’s track record against these needs.

Managing the Process

Needs Assessment

While strategic assessment refers to macro analysis of organizational needs, this step refers to the needs determination of specific functions and processes. This clearly sets the expectations of the client and the boundaries of the outsourcing project under consideration. It also involves studying the interdependencies between the processes. For example, if call center operations are being considered for outsourcing, one needs to map the entire CRM function.

It may be that servicing of existing customers is being outsourced because it involves standardized and well-tested transactional processes but not the management of new or potential customers which requires organization-specific higher level skills, competencies, and knowledge. The outsourced processes also need to have clearly defined key performance indicators (KPIs) against which the vendor’s performance is to be evaluated. Further, needs analysis should consider industry benchmarks and best practices.

The needs analysis should result in a detailed statement of work (SOW), that is, the scope of the project, details of the work assignment, and roles and responsibilities of both the client and the vendor. The SOW is incorporated into request for proposals (RFP) specifying the sourcing requirements, the profile of an ideal vendor, and process and quality issues.

Vendor Assessment

Outsourcing results in blurring the boundaries of an organization and a new relationship. Selecting a vendor is a crucial step in minimizing risks. Outsourcing of mission-critical projects, particularly with an offshored vendor or multiple vendors, is even more complex and crucial. Vendors come in all shapes and sizes. Some are best of breed, in terms of domain knowledge and expertise, backed up by world-class infrastructure and quality accreditation. Others are fly-by-night operators with questionable credentials.

A comprehensive and well-documented SOW can enhance the effectiveness of filtering and sifting vendors who respond to RFP. An examination of the vendor’s current customers, business portfolio, and customer references is the crux of the evaluation process. The vendor ideally needs to have an established reputation of successfully handling the business functions and processes under consideration with similar organizations and industry. Also, the vendor’s customers need to vouch for the vendor’s commitment to quality, work ethic, timeliness, and cost effectiveness. The vendor needs to strictly adhere to statutory regulations such as data privacy and labor laws. A good track record in the protection of intellectual property and disaster management procedures is also essential.

Negotiation and Contract Management

Good negotiation leads to a well-documented contract, normally referred to as a service level agreement (SLA). To negotiate well, one needs to have a thorough understanding of one’s own requirements. The negotiating team should be competent enough to understand the dynamics of the negotiation process to ensure that all the key requirements, measurement mechanisms, and contingency provisions are unambiguously spelled out in the contract in a time-bound fashion. An appropriate due diligence process needs to be performed before signing the contract to make sure that the vendor has the financial, intellectual, and infrastructural capability and competence to honor the deal. Documentation of minutes of negotiation meetings and undertakings is very crucial.

Finally, it needs to be remembered that the contract is just one aspect of the outsourcing relationship and what is equally important is trust, honesty, and mutual respect throughout the life of the contract. No contract is perfect and both parties need to be pragmatic and flexible to account for changing business conditions.

Project and Relationship Management

Once the project is underway, the vendor will start taking control of the outsourced functions and processes in a phased and timely manner. During the transition process, the employees of the client need to train and transfer the knowledge to the vendor’s employees by offering the necessary cooperation and support. This process may become political and hostile if the client’s employees are apprehensive of losing their jobs, power, and control after the transition; therefore, the management team needs to handle this issue sensitively, honestly and transparently, failing which the transition may stall for no fault of the vendor. Some amount of chaos, confusion, and frustration is common during this stage, but if both parties are sincere in their efforts and intention, things will become normal over time.

The project will proceed smoothly when everybody involved is clear about his or her roles and responsibilities and communicates regularly with each other. When virtual, international teams are involved in the project, management of diversity, in terms of cross-cultural awareness and empathy, becomes crucial. Differences in organizational cultures also need to be handled carefully. Regular and comprehensive documentation of project team deliberations is very helpful for the smooth functioning and achievement of the goals. When things go wrong, contingency plans need to be in place to ensure continuity and disaster recovery. Project managers from both sides play a crucial role in leading by example in the resolution of disputes, be it time or budget management or interpersonal differences. They also need to ensure the availability of resources, including time, money, and personnel necessary to undertake the project. Regular project reviews are necessary to take corrective action during the life of the project.

No relationship is rock solid. Differences are bound to occur and things are bound to go wrong, sometimes seriously. For example, terrorism is a global threat which can inflict fatal damage to people and infrastructure. A bomb explosion in India may affect banking and finance operations in the United States. While neither the client nor the vendor can envisage all potential problems, if the relationship is strong and enduring, the future of the project is secure. With changing business conditions and shifting regulatory requirements, the contract may need to be renegotiated, which is quite common. Sometimes, the situation may deteriorate to an extent where separation may become inevitable in which case a viable exit strategy needs to be part of any sound outsourcing contract.

Future Directions Of BPO

According to Gartner, organizations increasingly prefer single suppliers that deliver integrated solutions rather than piecemeal suppliers. Clients also prefer to deepen their relationship with vendors through an incremental approach rather than awarding big contracts at the initial stage of a new relationship. In keeping with these trends, BPO vendors are consolidating their operations through mergers and acquisitions. This means that exit strategy becomes even more important in contract terms and conditions. Further, Internet- and Web-enabled technologies will play a bigger role in BPO operations.

With explosive growth in off-shoring of BPO to countries such as India, new problems are emerging. Even though India produces millions of new graduates every year, many of them do not have the right skills, and those who have them change jobs too frequently pushing employee turnover to unacceptably high levels. Their wages are also going up which may in the long run upset the cost advantages. With the major offshore BPO providers increasingly setting up operations onshore and near shore, outsourcing is becoming more and more global. This may blunt the criticism often leveled against outsourcing that it leads to job losses in developed countries.

To BPO or Not to BPO?

While there is overwhelming evidence of widespread outsourcing across a wide range of industries, there is also a considerable rate of failure with BPO projects. One of the well-known cases of failure is the Australian federal government’s IT infrastructure outsourcing in late 1990s which failed badly to realize the cost savings envisaged. A review suggested that the government was overly optimistic of the benefits of outsourcing and significantly downplayed the associated risks of outsourcing large-scale projects. In many cases, clients have pulled back from outsourcing and brought the operations back in house, called insourcing or backsourcing. There is also considerable consumer resentment and employee trade union opposition to outsourcing which cannot be brushed aside by corporations with corporate social responsibility.

That said, outsourcing is a logical extension of division of labor and specialization, the key scientific principles of management that shaped the 20th century economy. Globalization and technological breakthroughs have fundamentally changed the way we work, and outsourcing is a key business strategy that harnesses the potential of the new business environment. Outsourcing and off-shoring are the key elements of the third-generation business model, after global exports and production. Businesses that provide BPO services have become a new phenomenon and can offer strategic and competitive advantages apart from cost savings. This is reflected in the fact that BPO has grown well beyond low level, transactional services to knowledge intensive, core transformational services that encompass a wide range of professional occupations such as engineering, medical, legal, and accounting.

Today, any organization, be it private or public, large or small, that strives to remain competitive and offer better services, needs to take a serious look at outsourcing. BPO is here to stay and grow. The question that every organization needs to ask is, “Is it relevant and beneficial for our customers and other stakeholders; if so, why and how?”

References:

  1. Click, R. L., & Duening, T. N. (2005). Business process outsourcing: The competitive advantage. Hoboken, NJ: John Wiley.
  2. Florida, R. (2002). The rise of the creative class: And how it’s transforming work, leisure, community and everyday life. New York: Basic Books.
  3. Friedman, T. L. (2005). The world is flat: A brief history of the twenty-first century. New York: Farrar, Straus & Girou.
  4. Halvey, J. K., & Melby, B. M. (2000). Business process outsourcing: Process, strategies and contracts. New York: John Wiley.
  5. McIvor, R. (2005). The outsourcing process: Strategies for evaluation and management. Cambridge, UK: Cambridge University Press.
  6. Power, M. J., Desouza, K. C., & Bonifazi, C. (2006). The outsourcing handbook. London: Kogan Page.
  7. Ricardo, D. (1821). On the principles of political economy and taxation. Library of Economics and Liberty. Retrieved August 24, 2007, from http://www.econlib.org/library/Ricardo/ ricP1.html
  8. Singh, T. J. (2006, June 29). Major trends in BPO—What you need to know. Pre-recorded teleconference. Gartner. Retrieved August 24, 2007, from http://www.gartner.com/tele-conferences/attributes/attr_152735_n5.pdf
  9. Srivastava, S. & Theodore, N. (2006). Offshoring call centres: the view from the Wall Street. In Burgess, J. & Connell, J. (Eds.), Developments in the call centre industry. Abingdon, UK: Routledge.

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