Benefits June 16, 2004

Study Charts BPO Expansion

June 16, 2004 (PLANSPONSOR.com) - More companies these days are making use of business process outsourcing (BPO) - to a large extent concentrated in their IT and payroll processing areas.
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A research project sponsored by HR software and services firm Genesys, Nova Amber, LLC and Outsourcing Central, found that 57% said they went outside for information technology services while more than four in 10 (44%) did the same for their payroll operations. The research is entitled Understanding the RFP Process for Companies Leveraging Business Process Outsourcing.

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According to a news release, the study surveyed BPO users on their outsourcer selection request for proposal (RFP) process and examined the use of support organizations in developing and evaluating RFP responses, RFP defined service level agreement metrics and service provider evaluation criteria.

Nearly seven in 10 have developed a RFP when evaluating outsourcing options and, the longer the firm had been outsourcing business processes, the more likely they were to develop RFPs.”For some organizations, implementing a RFP is the first step in placing parameters around an outsourcing agreement,” commented Munini. “The RFP can serve as an extremely important tool for companies and vendors to define their exact requirements and commitments.”

The survey also found that:

  • benefits management, contact centers, and other functions are increasingly being deemed non-core processes and are being sent outside.
  • Other than IT and payroll, the other most frequently cited outsourced processes include: benefits management (37%) and human resources (29%).
  • User objectives for BPO include improving company focus (68%), reducing total operating costs (67%) and making use of resources not available internally (46%).
  • More and more BPO users have designated a BPO manager and/or management team; 63% of respondents said they had taken this step.

“Business process outsourcing involves more than just turning over non-core business processes to a third party supplier. BPO is a strategic business move, providing companies of all sizes an opportunity to directly impact their bottom line, focus on core competencies and obtain a competitive advantage within their vertical market,” said Genesys President Lawrence Munini.

To request a copy of the study, go to http://www.genesys-soft.com/docs/research/research_rpt_request.htm .

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