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Understand Technology Outsourcing - BPO
Understand Outsourcing - BPO
Switch Technology Outsourcing - BPO
What is Business Process
Outsourcing
The Future of Business Process
Outsourcing
Why Business Process
Outsourcing
Types of Business Process
Outsourcing
Benefits of Business Process
Outsourcing
Pitfalls of Business Process
Outsourcing
Steps to Planning a Business
Process Outsourcing Strategy
Steps to a Business Process
Outsourcing Agreement
Frequently asked questions &
Summary
Videos (11)
White Papers (4)
Case Studies (9)
Types of Business Process Outsourcing
Human Resources (HR)
Most companies need HR or personnel services to recruit new staff, implement
new procedures and processes, draft employment contracts etc. Because HR
legislation is updated regularly, and general management might not always be
aware of the latest changes, potential legal implications can be expensive.
Key HR areas that can benefit from being outsourced:
benefits administration,
salaries and holiday admin,
recruitment, training and personnel development,
organisational personnel requirements,
disciplinary issues.
If certain processes and procedures are not adhered to, for example with
regard to disciplinary issues, this can result in costly litigation. Typical
businesses that outsource HR tend to be in the region of 25-1,500 employees.
Companies that are larger tend to keep HR in-house as at that point it can be
more cost effective.
Finance
Finance is one of the most important functions within an organisation and
processes must be followed meticulously. Finance can be a high overhead in
terms of resource and procedures even to the extent of raising invoices,
matching them against purchase orders and bank reconciliation which have to
be accurate and in most instances can not be replaced by accounting
software.
For example, payroll is a frequently outsourced process, simply because
having the resources to carry out the task just once per month are worth
having. However, when it comes to critical business processes like accounts
receivable, do bear in mind that any issues can have a major impact to your
business so you want to retain this in-house. Ultimately the Finance Director
should still retain control and have overall responsibility.
This means that (as with all business process outsourcing processes) the
finance team can focus on more strategic issues or areas that are more
important to the day-to-day running of the business.
Document management
By outsourcing the document management process, companies can improve
their use of data and find documents quicker. Information will be more easily
retrievable and stored on a computer system to save physical office space. A
document management system is held online with the data being held at a
third partys premises and accessed via the web.
Even small companies generate large amounts of data and recording and
storing this can be time consuming and expensive.
Furthermore, being able to access records and data quickly can help a
company maximise its intellectual property. For example, if an individual has
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already written a particular document that can be re-used many times, then
this saves time and resource.
It is also very important to be able to record and access key records for
compliance purposes. All companies have to adhere to some form of
legislation that compels them to retain information for a set period of time. For
instance, HM Customs and Revenue in the UK require individuals and
companies to keep financial records for at least seven years.
Procurement
Procurement or purchasing is a function of the Finance Department.
Regardless of the sie of a company, this can be an overhead especially if the
finance department have to negotiate and look for appropriate suppliers.
By outsourcing procurement a company can benefit in a number of ways. The
BPO service provider can:
monitor supplier performance.
implement appropriate processes and procedures,
manage requests for information or proposals and recommend the best
potential suppliers,
select suppliers and issue and manage legal contracts.
The BPO service provider can help reduce costs through more thorough
evaluation of supplier performance, an in depth knowledge of the markets
within which they work and because they may purchase in volume for a
number of customers, these savings may be passed onto the customer.
Software development
This is increasingly being outsourced or off-shored, with software
development teams based in areas such as Central and Eastern Europe and
Asia where there is access to highly educated, low cost personnel. This is
because the social costs in these growing economies are currently far lower
than in the western economies.
It is also far more productive and effective to have a team of people used as
and when required rather than having full time developers on site unless the
business can really warrant it. The majority of software vendors have teams
based outside of their main domain for this reason.
Call centres
A call centre is a centralised office that facilitates large amounts of inbound
and outbound telephone calls. Call centres have a number uses:
Telemarketing and telesales (out-bound calls)
BPO can encompass the outsourcing of sales and the sales process.
Certain products and services are much easier to sell via the phone
and dont require a face to face meeting. As a result, the costs for
marketing and selling such a product will be drastically reduced.
Furthermore, when this process is off-shored because of labour costs,
the cost of sale will be further reduced. BPO companies that are able to
carry out this function have all the facilities including specialist phone
systems and software to monitor and manage calls and the process
thereafter.
Data cleansing
Data cleansing is a system where an individual or individuals phone the
contacts within a database in order to ensure that all the details such
as contacts, phone numbers etc. are correct. This allows sales people
to phone and send emails safe in the knowledge that the information is
up to date. Again, it is far more cost effective to offshore this process
as the costs to do this activity in the UK can make it uneconomical.
Customer services (in-bound calls)
To outsource the inbound call process is also generally more
economic. Many banks and financial services organisations have
outsourced their customer services facilities. BPO companies that
facilitate this, again have the up to date equipment and software that
enables a seamless and fast way of dealing with queries and resolving
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issues. Such systems include the ability to ensure that customers never
have to wait for too long for a call to be answered, if at all by using an
automatic call distribution system that will route each call automatically
to the next free call-centre employee. Some even have the capability to
recognise when a customer is getting irritated or annoyed and
automatically sends an alert to a manager who can intervene if
necessary.
egal issues
You have to keep a number of key business issues in mind when outsourcing,
especially when it comes to personnel and their contracts of employment and
their legal rights. This is encompassed by a piece of legislation entitled
Transfer of Undertakings (Protection of Employment) Regulations 200 or
TUPE as it commonly known. In summary, TUPE ensures that:
Employees are not dismissed before or after any BPO agreement is in
place. This means that BPO cannot be used as an excuse to make
personnel redundant.
Employees are informed and represented throughout the process.
Employees rights are not affected by the BPO, i.e. their salaries and
packages must not be worse. This includes pensions and pension
rights, holidays etc. In essence, employees terms and conditions must
remain the same.
If these regulations are not adhered to, and an employee is dismissed as a
result of the BPO, then this will be regarded as unfair dismissal and the
company may be held legally liable.
The links below may be useful for companies seeking further information and it
is highly recommended that a specialist lawyer be involved at some point.
http:www.berr.gov.ukemploymenttrade-union-rightstupepage12.html
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