Question

Business-process outsourcing (BPO) is a type of outsourcing that consists of contracting operations and responsibilities of a specific business process (e.g.,human resources) to a third party service provider. Such outsourcing generally began with manufacturing firms outsourcing your supply chain but has grown into a much wider range of process, including marketing, finance, sales, and accounting. According to a recent Frobes articles, the revenue of the globe outsourced services Industry rose from 45 billion in 2000 to nearly 100,000,000,000 in 2012. Competition among firms in that BPO market is strong. Companies based in the United States include HP enterprise services, affiliated come to Peterson services, an automated data processing (ADP). A number of Indian companies, however, also provide worldwide BPO services, such as Infosys, Wipro, and Genpact. An article in business wk. suggested that BPL can save and users anywhere from 15 to 85%. International BPO service providers are particularly attractive says offshore labor I first an additional 25 to 30% cost savings. Furthermore, approximately 25% of the cost savings result from BPO firms proprietary products. The remaining 10% to 30% in cost reduction accrues from consolidated operations. Suppose you are the manager of a U.S.-based company and must decide whether to outsource your human resources department. Based on the above information and your study, please outline arguments supporting and opposing a decision to outsource this function of your business. Please explain from a purely business standpoint, any issues that might arise from contracting with an international-based versus U.S.-based BPO service firm? Explain.

Answer 1

Answer and Explanation:

A good number of problems usually arise with outsourcing from outside the country.

1. Different laws and regulations: this is one if not the greatest impediments to outsourcing staff for a business. The legal and tax implications of outsourcing to a different country creates the need to make sure business processes align with the legal frameworks or laws in these regions.

2. Language barriers: this aspect considers the challenges of communication when utilizing BPO services. There is the need for clear communication using US English from the example. Example outsourcing to an Asian country where English is somewhat a rarity.

3. There is also the need for increased data protection, privacy and security measures as there is more exposure to data breaches with this form of outsourcing.

4. However overall outsourcing makes available cheaper labour as well as more competent hands as is this case with US and China