Services offered in BPO (Outsourced processes)

There are a number of BPO services that can be offered by service providers

1.Call / contact centres: Call/contact centres are services that have been outsourced for many years by companies. They were one of the first services to be outsourced. Language and culture are very important factors in this segment and specific expertise is becoming important too.

2.Information processing: The advancements in ICT and digitisation of information have created new opportunities for BPO service providers. Trends in recent years the demand for these services has become dynamic with companies moving away from old fashioned data capture to information that is accessible via the Internet. In the longer run, it is expected that more and more business processes will be automated and the need for BPO within this field will decrease.

3.Web services: The demand for web services is large especially in the market for website design and will continue to grow as the demand for web services is also increasing. Also fields such as web-based market research are already outsourced on a large scale. However, cultural differences influence the potential to offshore these services. In more nearshore destinations these problems are much smaller as the cultural gap is much smaller.

4.Finance and accounting: Between 2003 and 2007, Europe was the fastest growing market in the world for finance and accounting outsourcing (FAO) with a 58% increase in annual contract value. The current global credit pressure is one of the demand drivers in this segment.

Although the more labour intensive processes that are outsourced, an increasing number of processes closer to the core activities of the company is outsourced. New service providers in the market are focusing on industry-specific tasks in order to deliver the highest quality possible. To face the increasing competition, FAO suppliers must differentiate themselves by investing in technology, focusing on vertical industries and adapting business strategies to provide complex end-to-end finance and accounting processes.

5.Human resources: The human resource BPO (HRO) is a huge market which has potential to grow much more in the coming years. The outsourcing of HR generates interest from both experienced firms and those with less outsourcing experience. This makes HR BPO one of the largest and most promising segments within BPO. Research in the European market indicates that buyers allocate at least a third of their total BPO spending to HR BPO. In the years 2005-2007, Europe saw an increasing number of HRO deals, which increased its share in the global HRO market from 16 to 30%.

6.Procurement: Procurement outsourcing can be considered as the logical next step after outsourcing finance and accounting functions. Procurement is a differentiated service as it is involved in many sectors. Recently a rise can be seen in procurement outsourcing in the financial sector, and other sectors are expected to follow. Companies that are most active in this segment are mainly the large and multinational firms. The degree of development of a company’s procurement system will have major influence on a company’s propensity to outsource procurement. If large amounts of money have already been invested in setting up a system and in hiring personnel, outsourcing may neither be cost effective nor worthwhile.

For mid-sized companies that have not yet modernised their procurement system, outsourcing this function might be very profitable and this provides a good opportunity for BPO service providers.

7.Research and development: This segment is still relatively small compared to other BPO sectors, but outsourcing of research and development (R&D) is gaining importance and is to some extent related to KPO. R&D BPO deals with industry specific research and not with general market research. A good example is the pharmaceutical industry, where R&D is already outsourced when it concerns research on the manufacturing of generic medicines.

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