The Impact of BPO on the American Economy

The Impact of BPO on the American Economy

The second benefit of BPO is that it forces western businesses to concentrate on their core capabilities and higher-end, more valuable tasks. The key takeaway is that by outsourcing their routine and menial tasks, western enterprises can devote more time and resources to tasks that are higher on the value chain and, as a result, bring significant value to their organizations.

Many Western critics have called attention to this reality and urged politicians and corporate executives in the US and Europe to consider it before they raise a fuss over outsourcing. Few businesses in the US and Europe can ignore the economic advantages that the majority of work that is outsourced offers, along with the ability to concentrate on core capabilities due to lower overhead.

Third, businesses in India and other Asian nations have improved their back-office processes and productivity as a result of the BPO phenomenon. This is due to the fact that these businesses have mastered the science and art of back-office work and are currently advancing up the productivity curve, meaning that businesses who outsource can be sure of receiving high-quality work at a reasonable price. Companies in the West are embracing BPO wholeheartedly as a result of this trend of producing high-quality work for half the price. This explains the sudden increase in businesses joining the BPO bandwagon.

Finally, any cost savings are appreciated during these hard economic times, and BPO gives recession-stricken Western enterprises a surefire means to boost their profitability and margins. Companies can expand by increasing their sales, reducing costs, or doing both. As growing sales become challenging due to gloomy economic conditions, it is common for businesses to attempt to decrease costs during economic downturns. Therefore, it would be a logical and apparent choice for such a project to contract out their back office work to organizations in India and other Asian nations.

In summary, BPO creates a win-win scenario for businesses that outsource their labor and those that serve as vendors and partners. As a result, the BPO phenomenon has produced net benefits for both parties to the exchange.