BPO and BPM: Are They Family?
Most people will be very familiar with BPO (Business Process Outsourcing), an industry that is emerging with fast growth rate. BPM (Business Process Management) on the other hand is another industry on its way to gain popularity and market size. One would easily notice that both begin with the word Business and followed by the word Process. But does that similarity already make them a family or the last two different words – Outsourcing and Management, make them not?
Business Process Outsourcing is contracting operations and responsibilities of a specific business function to a third-party service provider. Meanwhile, Business Process Management is a field of management focused on aligning organizations with the wants and needs of clients. The two definitions already made a clear distinction between the two – the former deals with business processes being outside an organization while the latter deals with business processes inside or within. Outsourcing is an outside thing while Management is within.
And a company would resort to business process outsourcing if its strategy is to increase its competitiveness by focusing only on its core businesses and outsource the rest of its business processes to an outside service provider. A more specific reason why companies outsource is because some business processes are cheaper if outsourced rather than do them in-house or inside the company. On the other hand, a company would need a business process management if it aims to make its business more effective and efficient by continuously improving its processes. And to continuously improve processes, a BPM model is needed to see the business from end to end. And so, a software called BPMS (Business Process Management System) is made available to support and manage the whole of BPM. But this software is industry-specific since not all industries have the same business processes to manage.
Comments are closed.