Business process outsourcing (BPO) benefits both the client and the service provider. For the client, the benefits can be significantly greater than the cost savings from the pure information technology (IT) outsourcing frequently deployed in the past.But as with anything else, BPO also has downsides. Therefore, a deeper understanding of both practical and theoretical aspects is beneficial.
This paper discusses some of the important problems that arise when making the transition from simple IT outsourcing to the more complex BPO. The discussion is mostly theoretical and focuses on outsourcing from the client’s perspective. It examines outsourcing models, their implications and the systemic and organizational aspects of outsourcing. The paper touches on three important questions of outsourcing: “Why outsource?”, “What to outsource?” and “What are the implications and potential problems of outsourcing?” It presents and overview of the literature and summarizes several interesting viewpoints.