BPO both liberating and strategically valuable.  An important point in the context of business process outsourcing is that it is different from the normal purchase of services as well as contracting of services.  While in the case of an organization buys a product or a service.  In the case of outsourcing, an organization is essentially buying the results as a process.  Further, while in the case of contracting a process, the organization retains control over the process, in the case of outsourcing, the organization allows the supplier or the vendor to exercise control over the process. 

The global major companies have rated India, as a prime destination for outsourcing. Recent surveys suggest that most US companies consider India as the best destination for offshore outsourcing.  Satellites transit millions of lines of code of minutes, India offers exports software to 95 countries around the world and it has expertise in global methodologies.  Given the compulsions for outsourcing and the lack of equally cheap and good quality outsourcing destination, India can except to garner a good share of the offshore outsourcing pie.

Forms of Business Process Outsourcing 

While the most common form of outsourcing is to enter into a contract with a third party or a vendor, it is not the only form in which a company can go for outsourcing. There are instances where a joint venture has been formed between the service provider and its client.  Another route which can be followed by companies is through the set up of its own subsidiaries.  Through such captive subsidiaries the company cannot only outsource its own business but is can also cater to the demand of other organizations.

The range of processes that can be outsourced are the handling of calls from organizations present and/or prospective customer is first example tat one comes across when studying about business process outsourcing.  A large number of companies have wither set up their own BPO centers or are outsourcing to Indian companies/MNCs various internal processors. An indicative list of internal processes, which are increasingly being outsourced, is as follows: purchasing and disbursement, order entry and data mining, billing and collection. Benefit Administration, Records Management, Finance and Accounting, Tax compliance and Management, Cash and Investment Management, Financial Analysis, Risk management, Financial Analysis, Risk Management, Internal Audit, Customer Relations, Insurance Administration, Employee Benefits, Travel Services, Logistics, and Sales Management, content Development Market Research and Surveys. 

Strategic outsourcing enables an organization to focus on its core competencies, management can focus on increasing sales and market share, development new and improved products, expanding into new markets and enhancing customer service and satisfaction.  The service provider can double up as a consultant and suggest better ways to manage processes.  Outsourcing enables the companies to obtain outside expertise, which the company may not have in-house.  It can help keep a check on the employee headcount.  It requires less upfront investments and at the same time the benefits are more easily and readily quantifiable. The company can more easily with the regulatory changes as and when they take place. This in one hand eliminates the unnecessary operating costs and on the other reduces and brings other administrative costs under better control.