Changing Face of Business Process Outsourcing

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Business process outsourcing is on the verge of very interesting times. No business venture in the modern times is isolated from other related business efforts. Business process outsourcing is no different. There are some interesting changes being noted because of the effect of the recession and global meltdown. If we examine the causes and their effects deeply, we will be able to point out exactly what we are looking at in the coming years.

As you know, business process outsourcing relies primarily on the first world countries. Lack of cheap labor in these countries pushes companies to outsource their non-core business work to the third world countries due to the abundance of cheap, yet skilled labor. Cost cuts are not the only reason why business process outsourcing happens. There are other factors as well, like convenience for business firms to focus on other areas, maybe even look at expansions.

The recession has put a huge block on all of these BPO services. Companies are now on the lookout to cut costs. They are no longer looking at expansions as a sound business proposition in these trying times. As a result, they are cutting down on work that they may be outsourcing. All of this is a chain reaction. Business process outsourcing firms in the third world countries are losing out on important clients. Business is on the wane and things are at the survival level now.

To keep their heads afloat, the coming months will see lots of mergers in the BPO services wing. Business process outsourcing firms are looking at partners to join strength and try to pull through together. Mergers also mean that there will be cut-downs on the employee strength. There will be layoffs and pink slips. Because the rate of hiring is very low, laid off employees have a tough luck ahead of them. Similarly, many BPO firms look set to shut shop due to non-availability of business and clients. BPO solutions need to be at par with the best if they hope to stay in the race. Not just do they have to deliver at lower cost they also have to go high on the quality.

Gartner, an IT research and advisory firm, has come with some dire predictions for the business process outsourcing industry. It reports that one-quarter of the BPO services providers that we see today will not be acting as separate entities by the end of the year 2012. They predict the entry of dynamic new players in the industry. These new entries will bring with them advanced technology, superior quality of services and innovations. Gartner has warned BPO investors to exercise caution when it comes to new acquisitions. They recommend that you look for acquisitions only when you are backed by hard evidence that the new acquisition will be profitable.

All is not lost, however. BPO firms are looking at ways to combat the negatives. They are waking up to the idea of having people to work from home. This facility will enable more fringe people to enter the work force of BPO units.

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Alex Carlson is an expert writer on business process outsourcing, BPO services and call centers in Canada. He started as freelance writer but soon specialized himself in the field of BPO industry. He has written for various publications related to outsourcing market. Presently he is a BPO instructor for an outsourcing firm in North America.

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