BPOs, in its early days, were associated with cost-savings practices. However, it has all changed now as it has enabled companies to become more flexible thus, providing them a powerful approach to achieve a wide range of tactical and strategic aims.

Companies are now:

Raising the bar: Companies intend not only to gain cost-saving benefits but also other highly strategic objectives.

Outsourcing strategic as well as tactical processes: The pressure of introducing more value added services has pushed companies to find outsourcing vendors with whom they can form a strong relationship and share control, in order to move up the value chain by outsourcing more strategic processes.

Outsourcing several processes to a single vendor: Companies are realizing the importance of having a single outsourcing provider instead of multiple in order to control risks and improve integration.
 
Every process that a company spends time on, that does not directly add value to its customer, is a cost that can be saved. However, many organizations look at the outsourcing as not just a cheaper option, but as the only viable option for many of their activities. Some of the reasons include (see diagram):

• Reduce overheads, free up resources
• Avoid capital expenditure
• Improve efficiency
• Offload non-core functions
• Get access to specialized skills
• Save on man power and training costs
• Reduce operating costs
• Improve speed and service
• Spread risks
• Be reliable and innovative
• Provide value-added services
• Increase customer satisfaction
• Benefit from the provider's expertise in solving problems for a variety of clients with similar requirements.