Business Process Outsourcing Assignment Example | Topics and Well Written Essays - 3000 words

Business Process Outsourcing - Assignment Example However, this definition of service is redefined by the new world system with the proliferation of business process outsourcing, which allows the separate production and consumption of services. The emergence of business process outsourcing can be best understood by employing a PEST analysis, which looks at the important aspects of the society that includes political, economic, social, and technological. The political sector has created a favorable arena in which business process outsourcing can proliferate. Policies which help promote globalization are instituted facilitating the elimination the geographical boundaries among nations and easing the exchange of products, capital, and services. The economy is evolving into a single global village which allows the free flow of goods and services by the elimination of trade barriers. Labor intensive products and services are channeled to developing economies where labor is relatively cheaper. In terms of social aspects, it is visible that there has been a wide social acceptance of foreign culture which allows the acquisition of foreign language especially English. Technological advancement specifically created a way to easily t ransfer data across geographical boundaries. A European based insurance company which opts to utilise Indian firm for its data processing and call handling gains benefits through: productivity improvements; access to expertise; operational cost control; cost savings; improved accountability; improved human resource; and the opportunity to focus on core business. However, business process outsourcing runs the risk of loosing managerial control, threatens security and confidentiality, and lowers the flexibility of the service consumer to react to the changes and trends in the business environment. Business process outsourcing is considered as a sunshine industry in India. Business process outsourcing generates jobs in the economy, brings in large revenues, and aids in economic development. However, the Indian economy should also recognise the risk associated in allowing foreign firms utilise their labor force. Business process outsourcing is hasardous to workers as they need to cope with the significant time difference in between their location and the location of the service consumer. II. Introduction According to Kotler (2002), service is "any activity which or benefit that one party can offer to another which is essentially intangible and does not result in ownership of anything." In comparison to goods which are produced by manufacturers, service is characterised by four distinct characteristics which are not present in tangible goods: inseparability, which signifies that the provider and the consumer of the service should be in the same location; intangibility, which implies that the service cannot be fully assessed using the senses; variability, which recognises that the quality of the services is not consistent using different customers' perception; and perishability, which implies the inability to store services (Palmer 2004). However, service has been redefined by the current global economy. A closer look at how large business organisations undertake their day-to-day operations reveals that services are now separable. The growing globalisation ushered a new trend called business