What Is So Revolutionary

about BPO? 
Samonte, Raissa Mae E.  |  BSBA HRM 2-2D

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Business Process Outsourcing
(BPO) is a business innovation
practice of contracting a specific
non – critical core
function/s from an organization
to external service provider. The
services can include payroll,
accounting, telemarketing, data
recording, social media BPO
marketing, customer support,
and more.  Overview

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  In the Philippines, the operation of BPO started in 1992 where an International Global Resource
Center has initiated the beginning of local BPO industry in the country. Because of this, three years
after, the Congress passed the Special Economic Act.
 Five BPO top hotspots globally specializing in various business processes and exporting services: 
1. India. Engineering and Technical 
2. China. Manufacturing and Technical 
3. Mexico. Manufacturing 
4. United States. Analysis and Creative 
5. Philippines. Administrative 
 Back-office function processes:
• payroll and benefits administration,
• customer service, 
• call center, and 
• technical support 
Removing these functions enables to reduce payroll and other overhead costs. 

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BPO:ASOCIO-TECHNICAL INNOVATION
BPO is a socio-technical business
innovation that provides a rich new
source of competitive advantage. By
socio-technical we mean that BPO
requires skillful management of people
and technology (hardware and
software).
Many managers prefer to stay away from
this concept of BPO as they believe it
quite wrongly to be technological
innovation and better left to the Chief
Information Officer.  
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 Human factors/ skill set include the following: 
• Developing various teams to manage the BPO initiative throughout its
life cycle 
• Reassuring staff of their role in the company 
• Training people on the new way of doing business
• Dealing with job loss and/or reassignment 
• Keeping morale high throughout the change process 
• Encouraging people to participate in decision making 
• Understanding cultural differences between the organization and BPO
partner

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 The implementation of a BPO project also require attention to
technology issues, like the following:
• Compatibility of systems between the BPO buyer and vendor 
• Data and system security 
• Backup and recovery procedures in the case of system failure 
• Data interface challenges and strategies 
• Software and database compatibility challenges 
• Data and knowledge management

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Driving Factors of
BPO Revolution
Educational Attainment
Broadband
Data Storage
Analytic Software 
Internet Security
Business Specialization

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Driving Factors of BPO Revolution
Educational Attainment
• Educational attainment around the world will
drive BPO innovators to seek new ways to tap that
talent for business purposes.
Broadband Internet​
• Broadband spreading around the world is driven by the
creative and business behaviors of users.
Analytic Software
• Software is a major source of business competitiveness in
BPO industry, a tool for us to work with and has been
designed to perform work for us.
• Online analytic processing (OLAP)
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Abundant / Inexpensive Data Storage 
• Storing data has always been a critical resource
for businesses. Before, it is paper-based data
storing. Now, it is computerized data storing.
Internet Security
• In the past, the executives were reluctant to
conduct any back-office business transactions online
with the fear of security risks.
• Republic Act 10173 or the Data Privacy Act of 2012
Business Specialization
• The benefits of specialization are a key to productive
exchange among economic agents.
• The idea of focusing on core competence leads to the
idea that a business organization should operate as
few non–revenue producing units as possible
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BPO TYPES 
• Offshore
• Onshore
• Nearshore

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BPO TYPES • Offshore 
Type Locations Functions Offshore is a type of BPO that outsourcing work
to a far-away foreign country. This type of BPO
India Manufacturing is the most challenging type of approach to
Offshore
China
Philippines
Programming
Financial Analysis
conducting business but potentially the most
Russia Call Center rewarding.
Mexico • Nearshore 
Canada Manufacturing
Nearshore Central America Call Center Nearshore is the outsourcing of business
Latin America
processes, especially information technology
Onshore U.S.A HR Administration processes, to companies in a nearby country,
Call Center often sharing a border with the target country. 
• Onshore 
Onshoring is the exact opposite of Offshoring, it
refers to the relocation of business processes to
a lower-cost location inside the national borders

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Summary
• Business process outsourcing (BPO) is simply the movement of business processes to the
highest-skill/lowest-cost provider.
• There are talent hot spots around the world, including India, China, Mexico, the Philippines,
and the United States.
• BPO is a socio-technical revolution in that it is both a social shifting of jobs and a technology-
based method of doing so.
• BPO is an emergent phenomenon to the extent that it is a result of several driving factors,
none of which was intended to create the potential for BPO.
• There are six primary driving factors of the BPO revolution: educational attainment,
broadband, data storage, analytic software, Internet security, and business specialization.
• There are three types of BPO: offshore, onshore, and nearshore.
• A BPO initiative requires both technical and nontechnical managers in order to implement it
properly.

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 ThankYou
Raissa Mae E. Samonte
samonte.raissa.mae@gmail.com
BSBA HRM 2-2D

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