What is "business process outsourcing?" Why has it become a key element in shaping functional tactics within most business firms today as a means to create an agile, virtual organization?
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1. Business process outsourcing occurs when an organization relents some of its processes or tasks to an external organization or individual that specializes in performing such tasks or process. These people or organizations receive a payment for executing the task on behalf of the parent organization. Business process outsourcing promotes the reduction of expenses or overhead, which in turn contributes to increasing the organization's bottom line. Those tasks that are outsourced usually do not bear a direct significance in promoting the company's market position but are still needed for the company to remain operationally efficient. An example would be the outsourcing of all auditing procedures to an external service provider because the parent company lacks human resources to ...
This article defines what business process outsourcing is, and the advantages of outsourcing in the organization for agility and profitability.