Critics’ Views on BPO Offshore Outsourcing
Posted by Blog Administrator on October 29, 2009
Business process outsourcing is the arrangement of an agreement by a company,with a third party company to perform its specific business functions or operations.
BPO offshore outsourcing is one type of outsourcing where internal business functions or customer related services such as human resources, accounting, finance, call center services or claims processing, are contracted to an overseas company. For years it has helped foreign companies cope with the global economic decline. However, this million dollar industry currently faces a multitude of criticisms; this despite its helpful nature.
President Barrack Obama’s view and opposition against outsourcing is currently the biggest opposing entity to the business. With his threats to impede any outgoing transaction involving BPO, several countries may be faced with a sudden decline in revenue. India, the Philippines, China, Malaysia, Mexico, Russia, Hungary, South Africa, Mexico and Poland, are just some of the places that have welcomed and profited in the industry.
Some critics have sided with Obama, citing that BPO can create difficulty or loss of control over the service being outsourced. Aside from this, they also added that instead of being effective, several discrepancies in the output can actually arise by virtue of communication, cultural and geographical barriers. Other disadvantages of BPO that critics raise include the risk of quality of work, threat to confidentiality or security, hidden costs, loss of flexibility in reacting to business changes and a threat to the local employment.
Now, there are some who even put a pointing finger on outsourcing as the root cause of the economic recession.
However, no matter how much criticism they put on outsourcing, the advantages certainly exceed the alleged drawbacks. In line with this, BPO offer companies a chance to avail of low operating costs, and have access to cheaper and efficient services, better technology, subsequently have an increase in productivity, profits and finally, more focus on core operations of the business.
Overall, it’s not hard to see how economically helpful this business transaction is. And as such, companies will not resort to BPO offshore outsourcing if they think they are on the losing side. The pros and cons may outweigh each other but then again, it is subjective.
President Barrack Obama’s opinion on outsourcing, according to the sentiments of others, may just be controversial political move, which needs further study.