Yes, they were different!
The global market sees how Business Process Outsourcing brought million peso in revenue. In the Philippines alone, IT-BPO revenues rose to 17% to $15.5B in 2014. On the other hand, Business Process Management, Global Market analysts Research said that the Global BPM market will reach $5.3 Billion by 2017. Those are just few of positive effects of both the BPO and what we call now, the BPM.
But before that, what’s the difference of these two distinct world? Which is more effective and productive? All that and more as we take a glimpse on these different business cycles.
BPO: Operations Outsourced
Business Process Outsourcing (BPO) is a subset of outsourcing that involves hiring an outside company to handle business operations for you. BPO that is contracted outside a company’s own country is sometimes called offshore outsourcing.
BPO that is contracted to a company’s neighboring country is sometimes called near shore outsourcing, and BPO that is contracted with the company’s own county is sometimes called onshore outsourcing. Commonly, BPO takes place for a lot of reasons such as low cost, effective manpower, and others.
Currently, Business outsourcing is also focused on hiring companies to do those non-core business management process that is typically involves voice, financial and administration processes, Human Resource functions, and customer representatives’ functions.
Another term attached to this is the KPO. Knowledge Process Outsourcing is a subset of outsourcing that deals with hiring a company that requires handling a specific, highly skill, and expertise works like insurance job among others.
Types of BPO Service:
2. Technical support
3. customer support
4. Insurance processing
5. IT Support
6. Data processing
7. Data conversion
8. accounting services
9. Web content research and writing
Among all these types of BPO service, customer services ranks the highest process outsourced by a company. Followed by non-voice like technical support, insurance processing, etc.
BPM: A Business Management Approach
If BPO is a subset of outsourcing, BPM is a subset of Infrastructure management.
Business Process Management (BPM) is a systematic approach to making an organization’s workflow more effective, more efficient and more capable of adapting to an ever-changing environment. The BPM aims to eliminate human lapses and miscommunication based on the company’s goal requirements.
To simplify, BPO is a process of a business, while BPM is a systematic approach to a business operations. BPM, since it is a systematic approach, is more comprehensive and goal-oriented that follows specified procedures. Also, BPM was considered to have a life cycle that includes the following:
1. Designing the process. What is the existing process? What and how to develop?
2. Modeling the design. Are there changes in the process? Are any changes in cost, variables, financial, structural, physical matters that affects the process?
3. Executing the process. Are you going to use an application? Human Intervention or combined?
4. Monitoring the process. Are there any vital observations, changes observed? Are the statistics, observations are properly analyzed? Do these affect the process?
5. Optimizing the process. How will you modify the process? Are there changes in the process to hold for betterment?
6. Re-engineering the process. Does it need to be re-engineered? What process must be under the re-engineering?
While the Business Process Outsourcing scheme is an abrupt type of business nowadays, it is still essential to not the difference between this and the Business Process Management. BP is process of a business, it is typically doing a business while outsourcing its operation to a third party workers while BPM is an approach that focuses on making a business process more effective, productive, and more capable of adapting a business environment. To simplify, BPO is a process and BPM is an approach.