Business Process Outsourcing is hiring external businesses to deliver a task that you otherwise had to do inhouse and has been around for many years, but has with the introduction of the Internet and globalisation taken a new dimension. Many large businesses have chosen to outsource some of the activities, simply so they can focus on their core business. Companies such as Microsoft have outsourced not only much (if not nearly all) of their high end jobs such as software architecture and development to offshore outsourcing companies in India, but also their customer service. Large companies that operate in Australia are also using BPO to a large extend. Hutchinson, Vodafone and Telstra have outsourced a great deal of their customer service to call centre locations in India and there are too many other examples to mention.
The trend is very clear, many if not all large companies choose when possible to outsource and they all have one thing in common. Cost of labour. No Australian, American or Western European call centre can compete with labour costs of less than $10 AUD an hour. Sure, the customer may experience an operator who speaks with an accent, but when you can save over 50% in costs, it is worth while.
Why should small business outsource
Clearly the large companies benefit from this, but why can’t medium and small businesses copy the large companies? They can, but for some reason they choose not to. Business owners who have spend their life building their business may not see outsourcing as a viable option for their business, because it will not fit into their business model, which is very similar to the way many business owners were regarding the Internet and email some years ago. Outsourcing may not reach the same level of popularity as the Internet, but there is little doubt that the businesses, who chooses to focus on their core business and outsource the non core activities to experts will become more competitive, simply because they do not have to allocate time, money and dedication to activities that does not contribute to the bottom line.
For details read here.
