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Outsourcing: Business Process Outsourcing
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Some of the major potential disadvantages to outsourcing include poor quality control, decreased company loyalty, a lengthy bid process, and a loss of strategic alignment. All of these concerns can be addressed and minimized... by companies who go about the outsourcing process in an informed and deliberate fashion. Info World's Maggie Biggs counsels businesses to define "exactly what business processes and/or functions it makes sense to maintain via a service relationship. Unless you have a lot of resources to expend, it may make sense to prioritize outsourcing projects based on the number of benefits you expect to gain from the arrangement." There may also be inherent advantages of maintaining certain functions internally. For example, company employees may have a better understanding of the industry, and their vested interests may mean they are more likely to make decisions in accordance with the company's goals.
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According to the Business Process Association of the Philippines, the Board of Investments and the Commission on Information and Communications Technology, the Philippine outsourcing industry is expected to create 103,000 new jobs in 2006, a 44-percent increase from 2005. This is in spite of the threat coming from other countries like India and China.
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Currently, outsourcing takes many forms. Organizations still hire service providers to handle distinct business processes, such as benefits management. But some organizations outsource whole operations. The most common forms are information technology outsourcing (ITO) and business process outsourcing (BPO).
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There is a proliferation of smaller business process and call center outsourcing operations throughout the Philippines. Typically, these operations are locally-owned and have between 10 and 100 seats. Because these businesses are small and foreign-owned, they generally have little or no marketing presence in the US.
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This is by no means the death knell for outsourcing as Diamond sees continued growth for both IT and Business Process outsourcing. Buyers of the future... will be more prone to re-insource when their expectations are not consistently met.
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Business Process Outsourcing