Saturday, 3 December 2011

Business Process Outsourcing: A Step Forward

Business process outsourcing is making its presence felt in the global economic forum. It is fast becoming a necessary tool for all businesses, either big or small. The rise of a BPO is hugely influenced by the technological progress in the field of communication and digital storage facilities. The advent of IT also played a pivotal role in its success.

In today's world, the BPO industry has grown multifold facilitating cost-effectiveness while improving on services offered. Business process outsourcing has been serving numerous industries from retail to telecommunications, from hospitality to insurance and many more. The practice of off-shoring is spreading like wildfire as companies look for expansion and cost-saving at the same time. These firms are attempting to attain the fine balance between consolidation and standardization by outsourcing their non-core areas to third-party vendors.

One major factor affecting the cost-effectiveness of a BPO is the lower wage rate prevailing in the developing countries like India, Philippines and other South Asian and Latin American countries. A recently concluded research by the Nelson-Hall suggests that more than 4/5th of the surveyed firms claimed increased profitability after outsourcing. The same percentage of firms also accepted the fall in cost and improvement in the business processes since they opted for a BPO.

Industry news suggests that the BPO industry is expected to grow at a phenomenal rate with the total revenue touching $14 billion by 2010. Fears of recession curtailing this growth rate have been decimated by the heightened rate during that period. In case of India, the business process outsourcing industry is expecting to witness consistent growth in the coming years in spite of the slowdown. Both the revenue and the employment are estimated to grow in the recent future.

The success of the BPO should be attributed to the surge in technological growth during this period. The innovation of optical fibers and the easy availability of the internet have paved the way for this outsourcing revolution. We can only infer from the prevalent growth rate that this trend will continue as more business houses, irrespective of their market size, will find outsourcing to be the road for success. Hence, we can proudly say that the world has not only shrunk in size but it has also entailed a more efficient way of life.