Business transformation outsourcing, or BTO, is becoming more and more popular in the business world. However, BTO and BPO, business process outsourcing, are often used interchangeably in public discourse, despite of the methodological differences between the two.
Business transformation outsourcing is an organizational practice of delegation of responsibility for all back-office operations. It involves widespread business change management process which is passed to a service provider. Basically, the advantage of BTO over BPO is that it takes full advantage of the BPO operations. This results to a total business transformation.
However, compared to BPO, BTO is a more complicated, risky process. If the outsourcing arrangement is not made clear, the risk of imperiling the deliberate order of business is high. BTO also requires client companies to comprehensively discuss with the external vendors the scope of the work to be outsourced. Unlike BPO with easily measured outcomes, BTO involves a high level of difficulty in evaluating the outputs since the major goal in BTO is to acquire long-term benefits. Another significant risk to be considered in BTO is that in this particular agreement, the client could hardly replace the vendor in the middle of disagreeable transactions.
On the other hand, BTO is can be considered as a promising industry because unlike BPO which is contractual, BTO is committed to achieve the long-term advantages of outsourcing. With competent strategic scheme and motivated focus on enterprise outcomes, BTO can result into a complete positive overhaul for the company. Managing the critical transition pace strategically which is the most important key element of BTO enables companies to leverage new potentials in accomplishing the company’s core functions.
While BPO which stimulates service vendors to hit specific output targets, BTO has no limitations in achieving remarkable increase in enterprise level outputs. BTO motivates service providers to reach more developments in enterprise level outcomes. Furthermore, BTO allows companies and external vendors to build closer relationship with each other, giving way for more trust and coordination than what is expected in BPO.
With BTO arising as the newest outsourcing innovation and globalization strategy, it also conveys higher level of complexity. Business transformation outsourcing requires a more sophisticated arrangement between client companies and service providers. However, considering its lasting advantages over other strategic business methods, the global market can expect of its fast expansion in the next years to come.
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