Outsourcing is the process of subcontracting business to a third-party service provider that might otherwise be performed by in-house employees of the business. Companies who are interested in outsourcing are often curious to compare the pros and cons of offshore outsourcing. By becoming educated about both the advantages and disadvantages of outsourcing, companies can decide if outsourcing is right for them.
Medium to large corporations have intricate business processes integrated throughout their business. In today’s cutthroat business world, many of these processes can become expensive and difficult to manage. Business Process Outsourcing (BPO) enables these corporations to accomplish tasks cheaper and more efficiently.
Business Process Outsourcing encompasses a broad range of services, including:
- Legal Process Outsourcing
- Knowledge Process Outsourcing (KPO) such as research
- Accounting Process Outsourcing
- Recruiting Process Outsourcing
- Data Process Outsourcing
As with any type of outsourcing or off shoring, the biggest advantage of BPO is the cost savings associated with it. Small and medium sized companies rely heavily on processes such as accounting. If accounting activities can be outsourced, a small company would save a tremendous amount of money. Foreign countries often have lower labor costs. The great thing about BPO countries is that the cost of living is also much lower, so everybody wins!
Another cost savings comes in the form of more employees for the price of one. For example, your small company could hire an accountant in the U.S. to take care of the day-to-day bookkeeping, or you could hire a team of 3 or 4 accountants in the Philippines or India for the same price. In doing this, more work would get done and the cost savings are endless.
With the help a fulltime team of off shore employees, your company will become much more efficient because of the additional employees that are in place. A good example of improved efficiency involves knowledge process outsourcing. If your company needed to accomplish some market research, for example, you could hire somebody in-house to research, or you could hire four outsourced employees and achieve results in a shorter amount of time and also have more conclusive results. Four heads are much better than one. Don’t worry about the language barrier, English is the language of business, and in places like the Philippines, English is a second language for most native Filipinos.