Business Process Outsourcing

Flashcards covering the key concepts, definitions, and distinctions in Business Process Outsourcing.

What are the two main classifications of outsourcing?

Classification by Function/Type of Work and Classification by Geographic Location.

What is IT Outsourcing (ITO)?

Involves contracting out services related to the technology infrastructure and applications of the client company.

What is an example of Business Process Outsourcing (BPO)?

Customer care, payroll, human resources administration, billing and invoicing.

What drives Offshore Outsourcing?

Labor cost arbitrage.

What is Nearshore Outsourcing?

Services delivered from a neighboring country or one in a similar time zone.

What are Core Functions in outsourcing?

Activities that create the firm's competitive advantage, typically retained in-sourced.

What constitutes Highly Suitable Activities for outsourcing?

Transactional, repetitive, high-volume tasks that require low-to-medium skill complexity.

What is the difference between Single-Sourcing and Multi-Sourcing?

Single-Sourcing contracts all services to one vendor, while Multi-Sourcing contracts different services to multiple specialized vendors.

What does Managed Services mean in outsourcing?

The vendor takes full operational responsibility for a defined process against a fixed fee or performance metric.

What is a Joint Venture (JV) in outsourcing partnerships?

A formal structure where the client and vendor create a new legal entity to deliver the service, sharing investment, risk, and profit.

What is the Global Delivery Model (GDM)?

The framework specifying where and how services are delivered, optimizing cost, quality, and time zones.

What is a key function of Service Level Agreements (SLAs)?

Defines the specific level of service the vendor must provide, including measurable metrics and penalties for non-performance.

What role does Cloud Computing play in outsourcing?

Allows for scalability, global access, and cost-effectiveness in service delivery.

What is Robotic Process Automation (RPA)?

Technology that automates high-volume, repetitive, rules-based tasks using software robots.

How does Artificial Intelligence (AI) support outsourcing?

Simulates human intelligence to perform complex tasks, including reasoning and decision-making based on data.

What is the importance of Advanced Cybersecurity in outsourcing?

Protects sensitive client data transferred across global networks through measures like encryption and multi-factor authentication.