Outsourcing : Outsourcing Of Outsourcing Essay

1307 WordsOct 22, 20166 Pages
1. What is BPO Business Process Outsourcing? BPO is a subset of outsourcing that involves subcontracting of various business-related operations such as accounting and customer service to a third party. The global BPO industry is estimated to be worth more than US$952 billion and is forecasted to experience strong growth between 3.5% and 7.6% CARG as can be observed in Figure1. BPO is often divided into two categories: a. Back Office Outsourcing: Internal business functions such as billing or purchasing are outsourced. b. Front Office Outsourcing: Customer Related Services are outsourced. Figure 1: Market size by segment (US$bn) and forecast growth obtained from HFS Research, 2013; KellyOCG – 6 Key Trends in Outsourcing 2. What is offshore outsourcing? BPO offshore outsourcing is where contracts taken outside company’s own country is known as offshore outsourcing. In the last decades, Asian countries such as the Philippines, Indonesia, India and China have been a prime host to such outsourcing due largely to their lower wages and skilled workforce in the area of outsourced business processes. Figure 2 shows the popular locations in China for offshore outsourcing. Figure 2: China’s 20 designated strategic sourcing locations sourced from KPMG New Dawn. 3. What is near shoring? BPO near shoring is where contracts are taken to a company’s neighboring country. For the U.S, Mexico is largely becoming an attractive near shoring destination. As wages rise and
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