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Outsourcing is a process wherein an organization enters into a contract with another business organization to operate and manage a portion of its business operations or process. This strategy had been applied initially in support back end operations such as billing, payroll and data entry.
Outsourcing may be generally classified as BPO (business process outsourcing, ITES (IT enabled service) and KPO (Knowledge Process Outsourcing). ITES pertains to business processes that relates to information technology such as software development and maintenance and programming. KPO pertains to the outsourcing of knowledge such as legal services, financial analysis and consultation. Finally, BPO pertains to the outsourcing of business processes such as customer relationship management, human resource functions and administrative management.
At the moment outsourcing is getting popular because of the following strategic advantages. First of is the cost advantages as it allows business to reduce its expenses. Second is economy of scale which also results to reducing cost as business expands or increase production. Third is it mitigates risk as it spreads out cost. Fourthly, it allows business to obtain superior competency as outsourcers specialize in a particular business function. Finally, it frees the organization from other function so that it can concentrate on their core operations.
Among the different type of BPO services included data entry services, OCR editing and indexing, insurance processing, and web research. However the most popular and biggest type of BPO service in the Philippines is the contact center industry or the call center industry. The call center is a type of BPO and not the other way around. As its name implies, a call center company provides that portion of the client's business which involves handling telephone calls, the most popular of which is CRM or customer relations management.
CRM included customers support services, technical support services, telemarketing services and other such services directed to the clients of the business organization which outsourced. A call center company is therefore a BPO organization and not conversely because not all BPO organizations are call centers. A BPO organization can be software development company, a medical transcription company or data entry company among others.
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