Business Process Outsourcing and India
October 18, 2007
Management Online REview (MORE), September 2008
Business Process Outsourcing is the leveraging of technology or specialist process vendors to provide and manage an organization's critical and/or non-critical enterprise processes and applications. Outsourcing, Offshore-Outsourcing and Off-shoring are used interchangeably despite important technical differences. Outsourcing involves the transfer of organizational function to a third party; when the third party is located in another country the term Offshore-Outsourcing should be used. Off-shoring in contrast, represents the transfer of an organizational function to another country, regardless of whether the work stays in the corporation or not. Outsourcing and off-shoring are not new concepts to the global economy. Earlier, off-shoring was mostly restricted to manufacturing through technology-transfer during the maturity and decline phases of product life cycle. Major advantages of outsourcing are cost-reduction, comparative advantage by division of labor and economies of scale, lower turn-around time, data-backup for disaster management. Areas of concern are service quality, data-theft, attrition rate, privacy laws and personal-information misuse and credit-card frauds. There are other issues also like job-lose in the outsourcing country, cultural differences and information security. The Indian outsourcing industry is growing fast and has become a major investment area. With increased focus on information security and a comprehensive IT act it is going to get a further impetus in coming years.
Number of Pages in PDF File: 22
Keywords: Business Process Outsourcing, BPO, Outsourcing, Offshoring, Offshore Outsourcing, India
Date posted: October 18, 2007 ; Last revised: May 27, 2011