Business Process Outsourcing Is A New Management Strategy

2990 Words Apr 28th, 2015 12 Pages
Business process outsourcing is a new management strategy, which encompasses transfers of an organisation’s internal functions to a third party. In essence, it encompasses entrusting and ensuring a third party with company functions. The third party executes the function and meets the expectations of the company (Kozweska 2004). Company objectives primarily dictate the above expectations. A company transfers business tasks and processes to an external provider, a specialist in a particular field, to enhance its profitability and hence return of investment to its shareholders. Business process outsourcing also provides a basis for establishment long-term, mutually beneficial relationship between the company and the outsourced provider.
Competition is the main driver of the growth of business process outsourcing. The global business environment has become very competitive as companies try to meet their customer’s evolving needs. Changes in lifestyles, for example, necessitate a review of a company’s products. This establishes their relevance under the new lifestyle, which ensures that such products do not become redundant under it (Levy 2005). The technological revolution experienced over the last two decades is the main catalyst of the above changes in lifestyle and as such, it is imperative for companies to remain abreast with the above developments.
Globshop, a large scale duty free shops retailer, uses business process outsourcing to enhance its business performance thus…
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