Business Process Outsourcing (BPO) Emerging Scenario and Strategic Options for IT-enabled Services

The paradigm shift that the Internet has brought about in communication has opened up a plethora of opportunities for outsourcing business processes (BPO) across continents. Success lessons in manufacturing sub-contracting are found to be relevant for understanding the logic of BPO. Outsourcing involves transferring certain value contributing activities or processes to another firm to save costs and for the principal to focus on its areas of key competence. The possibilities of disaggregating value elements for the purpose of creating value in them at the sub-contractors’ premises and final aggregation and synthesis at the parent organization are determined by the nature of industry, limitations of coordination and control, product maturity, and level of inter-firm competition.