The Impact of Technology on Cost in Business Process Outsourcing

Many different factors contribute to the cost of a business process outsourcing (BPO) engagement. Among them, IT, especially software, is a key cost determinant that is often underestimated. While software licenses and maintenance typically represent no more than 3% to 5% of a BPO provider’s total cost, they directly drive process automation that immediately impacts the cost of operations. Technology drives the BPO cost structure in three ways: it enables economies of scale, supports sustainable process optimization, and makes labor arbitrage possible by connecting and controlling remote location workflows. This whitepaper will discuss how organizations can balance their needs for personalization and standardization of outsourced processes by creating the capacity to design process and IT implementation jointly.