2. Contents
Introduction:What is Business Process Outsourcing?
1:Top Reasons to Outsource
2:What Processes Should You Outsource?
3:Will You Save Money? Conducting a Cost Analysis
4:Choosing an Outsourcing Location
5: Achieving BPO Success
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3. What is Business Process Outsourcing ? Business process outsourcing (BPO) is the activity of contracting out business tasks to third-party service providers. These tasks are things that a company must do to operate on a day-to-day basis, but they are not the company’s core business. Some tasks that are often outsourced include:
•Inbound and outbound mail: Mailroom staff receive, open, sort and deliver thousands of documents every day. The mailroom also is responsible for sending correspondence to customers.
•Scanning, imaging and data entry: Many companies digitize paper documents as they arrive in the mailroom. Classification of forms and capture of data is completed manually or by automated systems using Optical Character Recognition (OCR).
•Finance and accounting (F&A): Commonly outsourced functions include accounts payable, collections, payroll, requisitions and purchasing, and order-to-cash.
4. Top Reasons for OutsourcingMost business processes are established in-house, but at some point managers will decide if it makes better sense to turn over non-core functions to a service provider. Here are three main reasons why companies decide to outsource:
1.Cost Reduction—BPO providers leverage lower- cost labor markets onshore, nearshoreor offshore locations to deliver cost savings. Providers also unlock savings by using Lean Six Sigma methodologies to remove non-value-add steps from workflows.
2.Focus on Core Business—Turning over non-core processes to an outside provider allows you to focus time and talent on your organization’s core competencies: those key features of your service or product that differentiate your company from competitors.
3.Improved Quality, Efficiency and Turnaround Times—Because BPO providers focus exclusively on back-office functions, they invest in the technology, process-improvement methodologies, staff training and other resources necessary to achieve a much higher level of process performance.
5. What Processes Should You Outsource? Which Should You Keep In-House?
Before making an outsourcing decision, one of the most important questions you need to ask is: What is your company’s core business?
The answer to that question includes: what your company does best; what separates it from the competition; and what creates the “value proposition” offered to customers.
Once you understand your company’s core business, you can begin looking at the business processes that support it.
A general guiding principle is that you should retain in-house the activities that make up your company’s core competencies and outsource all non-core business functions.
How do you begin determining what processes are worthy of outsourcing? Check out our Outsourcing Decision Matrix at this link: http://bit.ly/1wgofe2
6. Will You Save Money by
Outsourcing?
How to Conduct a
Cost Analysis
A cost analysis is a smart first step in the decision- making process to determine whether it makes sense for an organization to keep a business process in- house or if significant benefits can be gained by turning it over to an expert service provider. It’s important to remember that a cost analysis is not simply a matter of calculating the total current annual costs of a business process and comparing it to a service provider’s bid. DATAMARK’s white paper, “Keep it In-House or Outsource: Performing a Cost Analysis for a Business Process Outsourcing Decision,” presents a way of analyzing differential costs–costs that will be avoided if the process is outsourced–over a multi-year period. The costs are then discounted to a net present value for an accurate comparison of in-house costs versus outsourcing costs. Want to learn more? Download the white paper at this link: http://bit.ly/1DCu3yP
7. What’s the Best Location for
Your Business Process?
Onshore, Nearshore, Offshore?
After companies have embraced the concept of outsourcing, they are faced with some important questions:
“Where should we outsource our process?”
Where will we find the best balance of cost-savings, process visibility and tolerance for risk? Onshore, nearshore, or farshore?”
To help answer these and other questions, DATAMARK offers a concise guide to outsourcing location analysis.
The document compares each outsourcing destination’s key attributes, such as wage and real estate savings, security and business continuity, and cultural fit.
Also addressed are the benefits and risks of each outsourcing location.
To learn more, download “Onshore, Nearshore, Offshore: Choosing the Right Destination for Business Services” at this link: http://bit.ly/1wIGN4E
8. Achieving BPO SuccessIf your organization is considering outsourcing, be sure to watch the DATAMARK webinar,Business Process Outsourcing: Set Yourself Up for Success! In this complimentary one-hour webinar, hosted on YouTube, DATAMARK Director of Engineering Nina Brown shares the best steps for a successful business process outsourcing engagement. Brown, an ASQ-certified Six Sigma Black Belt and certified Project Management Professional (PMP), addresses these questions to help you achieve your outsourcing goals:
•Which areas of my organization or processes are ripe for outsourcing?
•How do I select the right BPO provider?
•How do I measure and ensure success with my BPO provider? Watch the webinar now: http://bit.ly/1sMtmfW