The Pros and Cons of Business Process Outsourcing in India

When some non-core business processes of a firm are delegated for handling to another company, then it is termed as business process outsourcing. This type of outsourcing is quite flexible in the manner that the entire process area is outsourced and not just a specific function of the firm. BPO in India is usually done for high-level processes like human resources, legal and financial matters. It mostly does not happen for auxiliary processes. Here are some of the advantages and disadvantages of outsourcing to an external service provider.

Pros of business process outsourcing

• Cost reduction: Since the service provider has expertise in dealing with specific processes, it reduces the operational costs of a process significantly. Thus, the company outsourcing its business processes has much to gain out of it. If the initial preparations are done efficiently, then cost savings can be quite high in case of business process.

• Better process/cost control: Another factor driving business process outsourcing is the greater control a company may have over the outsourced process. The costs of running a process and the operating procedures become more transparent, as the service level agreements and outsourcing contracts list everything in detail. Thus, more transparency brings better control for a company.

• Flexibility to grow: When a company outsources its business processes, it goes free of some burden. It can give the company a bit of flexibility to focus on other important growth-oriented activities.

• No need of temporary hiring: There are several temporary processes that need professionals to handle them. If these processes are outsourced, then the outsourcer may not need to hire additional staff to work on them on a temporary basis.

• Swift operations: The work can be completed swiftly once experts take charge of it.

Cons of business process outsourcing

• Complexity: It requires effective planning and careful selection of a service provider before a company can outsource its business processes. The company has to assess the efficiency and expertise of a firm before handing over an entire process to it. Thus, some prelim analysis and competence assessment is required to overcome the complexity of outsourcing.

• Customer satisfaction: Many times, outsourcing may be a cause of concern to internal and external customers. They may worry about the service quality, as these services come from a vendor instead of the firm they deal with. Thus, an outsourcer may also be concerned about its customers’ satisfaction.

• Data safety: Business Process Outsourcing in India may be cost-effective, but can involve safety issues with the shared data. Thus, a reliable service provider must always be chosen.

Jack Joness from his school and college days only had a passion for Mathematics and Statistics. He even used to work as a Data Analysis and Statistics Analysis freelancer during his Post Graduation days. Then after working really hard and gaining lo