The philosophy behind BPO is specific, do what you do best and leave everything else to business process outsourcers. Companies are moving their non-core business processes to outsource providers. BPO saves precious management time and resources and allows focus while building upon core competencies. The list of functions being outsourced is getting longer by the day. Call centres apart, functions outsourced span purchasing and disbursement, order entry, billing and collection, human resources administration, cash and investment management, tax compliance, internal audit, pay roll...the list gets longer everyday. In view of the accounting scandals in 2002 [Enron, WorldCom, Xerox etc], more and more companies are keen on keeping their investors happy. Hence, it is important for them to increase their profits. BPO is one way of increasing their profits. If done well, BPO results in increasing shareholder value.

Typically, a customer calls the call center [usually a toll-free number]. After pressing numerous numbers [1 for English, 2 for Spanish, 3 for bank balance!] the operator will answer your query by accesing the database. Call centres address sales support, airline/hotel reservations, technical queries, bank accounts, client services, receivables, tele marketing, market research.

If a bank shifts work of a 1000 people from US to India it can save about $18 million a year due to lower costs in India. According to Mckinsey, giant US pharma firms can reduce the cost of developing a new drug, currently estimated at between $600 million and $900 million by as much as $200 million if development work is outsourced to India.

Benefits derived from BPO can be summarized as follows:

Outsourcing is not new - it has been a popular management tool for decade. One can safely say outsourcing has evolved :-