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Things that Have Changed in BPO

by: Sarah Joson

Monday, October 7, 2013 |

An article posted at Outsourcing-Center.com highlights six ways the global business process outsourcing environment has changed over the years. According to Professor Ilan Oshri of Technology and Globalization at the University of Loughborough, today’s larger volume of experienced buyers for both captive operations and third party service providers and new technologies used in outsourcing have contributed immensely to the rapid progression of the industry.

Before, clients chose a specific process to outsource. Now, a growing number of buyers make use of the hybrid model which often consists of several processes in one contract. Hybrid models are now also integrated in the internal communications and day-to-day aspects of a company, rather than being treated as an external department.

Here are six ways the global business process outsourcing industry has changed:

Almost everything is digital.
Simple and repetitive processes are now being done using technology instead of manpower as business executives are beginning to differentiate high-end processes from low-end ones.

Boundaries have been broken.
Higher attrition rates and labor cost inflation are pushing pioneer outsourcing hubs such as India to farm out processes as well. Competition in the offshoring market is getting more intense as well because of the emergence of new players in niche segments of outsourcing.

Experienced clients are now more confident.
Enterprises that know the ins and outs of outsourcing are seen outsourcing more and more complex and high-valued processes to service providers. They do this in order to bring forth innovation to the company and improve the internal process flow.

Deals are now more flexible.
Clients are no longer stuck in one agreement. They can now create contracts that can be edited as the operation progresses. Most of these contracts focus on the performance of the provider and the growth of the company.

An example would be a company outsourcing a specific portion of their back office operation. After a year or so, the operation is now optimized and is able to function independently – without the reinforcement of the service provider. They can now create a new arrangement with the service provider where they could focus on a different department that needs improvement.

Risks are now also brought up a lot during the creation of contracts as providers are willing to undertake new clauses that are based on their output and unforeseen challenges that can come along the way.

There's a fusion of management and control.
Some clients are now sending their employees to where their providers are, instead of farming out internal processes. Providers will then work with the existing employees and work as a team instead of two different parties. This contributed to the growth of onshore operations as clients are now looking for captive centers near them, while using the skills of the local talent.

Once outsourced, processes are now insourced.
New managers, strategies, inadequate performance of providers, and external issues are pushing clients to move jobs back in-house. Some of the segments seen doing this are the voice-based segment and information technology.

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