Business Process Management 101

About Business Process Outsourcing (BPO)

Like manufacturing companies before, companies are now outsourcing not only their services but also their actual business process operations. There are three main models used for business process outsourcing programs:

Onsite Model for BPO. This model for business process outsourcing entails that all work occurs at the client's facilities. This is ideal for projects that are high security, mission-critical, time-critical or dynamic.
Advantages: Less errors; face-to-face contact; vendor more a part of the team
Disadvantages: Greater equipment costs and labor costs

Offsite Model for BPO. This model for business process outsourcing entails that most work occurs at the service provider's facilities located relatively close to the client. The outsourcing vendor may also have an office on the client premises as needed. This is ideal for projects that are short-term duration, well-defined, and don't change much.
Advantages: No extra equipment needed; vendor close to client
Disadvantages: Labor costs can be high

Offshore Model for BPO. This model for business process outsourcing entails that all work occurs at the provider's facilities in a different country. In addition, the outsourcing provider will not have a presence at the client premises but rather communicate using the Internet, telephone and fax.
Advantages: 24/7 "follow the sun" work cycle using all time zones; low labor cost.
Disadvantages: Risk of communication snafus; possible quality control issues.

More info on business process management