More and more companies are now outsourcing or planning to outsource their businesses or some facets of it.  For those who are not too familiar with this practice, outsourcing is defined as the movement of specific functions within an organization to a third-party firm.  There are two subsets of this strategy, Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO).

Do you know that outsourcing a business does not necessarily mean to commission a firm overseas?  Although it is the most common perception, it not right.  Many companies have been hiring the services of subcontractors, and some people don’t recognize it as the said misconception inhibits them.  It is possible that your organization’s housekeeping staff is not employed by the company itself but by another business entity that specializes in providing workforce services.

Why have companies outsourced their business processes?  Mainly for economic reasons and to drive profit – save money mostly, access the latest technology, focus on more pertinent issues, tap a highly specialized workforce, and address the lack of resources.  In the realm of outsourcing anything related to the computer and the internet, web design, programming, etc., are under ITO.  Human resources, billing, payroll, and other functions fall under BPO.

Quite a several companies stand by and give ITO a nod.  They get to hire the best minds in the industry offshore or not, and on the other hand, freelancers find it easier to find themselves jobs.  As with barriers in communication and location, the internet is a reliable bridge.  BPO, offshore in particular, is not received as warmly as ITO is.  Besides the usual complaint of diverting jobs overseas, much to the benefit of employees of the subcontracting party and woe to that of the outsourced business, clients are complaining about the declining quality of service being provided.  Because the bulk of the jobs outsourced offshore are from the call center industry, clients have issues regarding failures of communication.  This can be avoided by putting in place stringent requirements and choosing a reputable third service provider that can live up to the contracting company’s and the client’s expectations.

India and the Philippines have become the centers of BPO and are further expanding. The former is known for its technical expertise while the latter for their sales and customer service skills. For businesses that are planning to jump into BPO, they must weigh the pros and cons. It is best to not only be driven by profit and go for the lowest contracting price. The ability of a BPO company to deliver and be up to par with the highest standard should be given as much weight.