Their regional offices operate autonomously because the corporation has no ability to track information across the enterprise. In some cases, global corporations have systems that are unable to handle the multiple currencies and languages with which they do business. The BPO provider implements a uniform system across the enterprise. As a result, the company can eliminate purchasing duplication and achieve significant economies of scale between 10-15 per cent, representing millions of dollars at large companies. At the same time, service levels can be improved.
Travel is one simple example.
Company X s regional offices each employ a different travel agency. Executives in one office have come to insist on specific airlines, hotel chains, and car-rental companies because they amass more points, while travellers in another region use another set of companies. The BPO provider is able to sort through all this data and leverage it in purchasing. By guaranteeing one travel agency a certain number of bookings per year, Company X is able to negotiate significant discounts and upgrades. Company X increases its margins, passes savings to customers, and makes executives happy at the same time.