In today’s increasingly competitive environment increasing efficiencies and cost optimisation are key concerns for business owners. Business Process Outsourcing (“BPO”) offers many advantages including improvements in business effectiveness, efficiencies and cost optimisation, but also it can help increase a company’s flexibility.
- BPO can transform fixed costs into variable costs. A variable cost structure helps a company responding to changes in required capacity and does not require a company to invest in assets, thereby making it more flexible.
- BPO contributes to a company’s flexibility in that a company is able to focus on its core competencies.
- BPO increases organisational flexibility is by increasing the speed of business processes. Supply chain management with the effective use of supply chain partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a manufacturing company.
- BPO allows a company to maintain growth goals while avoiding standard business bottlenecks.
Management needs to be careful with the implementation of BPO as there are issues, which can work against the advantages outlined above. Among problems, which arise in practice are; a failure to meet service levels, unclear contractual issues, changing requirements and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in BPO.
At WENTWORTH our experts have vast experience in the implementation of BPO strategies. We can assist with the provision of back office support services directly where appropriate and/or provide advice and assistance to ensure the effective engagement and management of outsourcing suppliers from IT and back-office functions to establishing shared services centres for major business processes.
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