It is obviously the dramatic cost savings and the enhanced focus on core competencies facilitated by the BPO companies that attract the consumer goods and retail companies towards it. However any serious concerns related to outsourcing should address common concerns like the common belief that outsourcing entails a loss of in-house expertise. The argument goes that since the process is outsourced to an external service provider, there will be a reduction in process expertise and capability as a result.
However companies with many years of experience in outsourcing have strongly voted against the belief by proving that gains rather than loses in functional expertise leading to higher business performance has been seen. Most of the retail companies operate in a competitive market where fluctuations are sudden, systems are complex, thin margins and handiness is mandatory. In such a scenario only a rare enterprise can stand against the tide and afford any loss even if it is only for a brief period. Hence companies prefer outsourcing to promote process excellence as it reduces costs.
Many companies who have partnered with the BPO companies have admitted that they have noticed significant levels of expertise equal to or often greater than those enjoyed prior to outsourcing. The impact of outsourcing on innovation, key skills, and access to cutting edge technology and tools for managing a process has been prominent and profitable. Many surveys conducted on this subject matter have produced results favorable to the BPO service providers. The bottom line is that most of the companies achieve high performance through effective outsourcing partnerships.