BPO (Business Process Outsourcing) means that enterprises inspect business processes and corresponding functional departments, outsource these processes or functions to suppliers, and suppliers reorganize these processes. BPO transfers all functions of functional departments (such as transaction processing, policy services, claims management, human resources and finance) to suppliers. Outsourcing providers manage these functions in their own systems according to service agreements. Some BPO contracts are paid according to the service level, which practices the supplier's income with business performance or cost savings.
From this definition, we can make three points clear: first, BPO is to outsource part of the company's business, that is, to hand over part of the business originally handled by the company to external entities to complete. Therefore, there are trade-offs and choices between outsourcing business and external contractors. Second, the relationship between companies operating in BPO mode and external contractors is a "long-term contract". That is, a long-term stable relationship with clear responsibilities and rights. Thirdly, there is only one starting point and ultimate goal to realize BPO operation, that is, to increase the value of the company's shares, that is, to increase profits.
In a sense, outsourcing has existed for decades-especially in manufacturing, it is a means to reduce costs. The earliest attempts of outsourcing activities were mainly carried out by large enterprises, focusing on the field of information technology services. Now, with the development of network technology, the increase of high-speed data network and bandwidth capacity, the scope of outsourcing has expanded, including a series of management affairs, so enterprises can now "unload" the whole business function. At present, it provides BPO services in the fields of finance, insurance, medical care, human resources, mortgage loans, credit cards, asset management, customer service, sales and marketing.
For a specific BPO service, its complexity is different, including basic management functions such as data entry or billing, and more complex transactions that require decision-making and problem-solving skills. With the increase of transaction complexity, the skill level required to provide BPO services is also improving.
BPO has many distinctive features, which are conducive to accelerating the development of enterprises and may become a "new model for the development of companies in the new millennium".
First, BPO can effectively improve the supporting role of auxiliary business to core business and increase the overall profit. The company's business can be divided into core business and auxiliary business, and the main object of BPO operation is the auxiliary business that supports the whole business, such as finance and systems. After these auxiliary services are outsourced to specialized companies, the quality of services can be significantly improved rapidly, thus promoting core businesses and improving overall profits.
Second, BPO can further highlight the key management of core business and realize effective control of auxiliary business. Outsourcing some auxiliary businesses will help the company's management to devote more time and energy to its core business. In the management of auxiliary business, external specialized companies, as business contractors, have clear standards and commitments on the service level, cost composition and quality inspection of their contracted projects, so that the company can control the cost and quality of auxiliary business according to the performance of the contract and achieve the expected goals.
Thirdly, BPO not only improves the quality of outsourcing business, but also turns this business field into a creative field. Within the company, auxiliary business is usually regarded as "daily work" and "recurrent expenses". When employees of external specialized companies take over these businesses, the nature of these businesses is no longer "daily work" but "new employment opportunities". They can accomplish these tasks creatively with enthusiasm. In addition, external specialized companies are often technical leaders in their business fields. They optimize the design, scientifically operate and manage the contracting business, keep track of the latest technological development and constantly update the company's system.
Fourthly, BPO is conducive to breaking the traditional industry (business) boundaries in the new market environment, forming a cross-business alliance with external companies, forming a long-term strategic partnership and enhancing each other's competitiveness.
Fifth, BPO is beneficial to control and reduce production costs. Due to the realization of cost quality control of auxiliary services, business update and optimization, and the adoption of advanced technology, the cost can be effectively controlled.