Business Process Outsourcing

What is Business Process Outsourcing?

Business Process Outsourcing (BPO) is a cost-effective tactic employed by organisations to provide a variety of services through a third party. For example, in the retail industry it is quite common to outsource customer experience services to a third-party company which specialises in doing so. This enables companies to save costs, optimise efficiencies and free up time to focus on other aspects of their business.

Although business process outsourcing companies are sometimes synonymous with call centres or customer service, the industry’s offerings have expanded to encapsulate a myriad of services such as lead generation, content moderation, content creation, and even financial services depending on the vendor.

Categories of Outsourcing

While there are various services that can be outsourced to BPO companies, there are three core types of outsourcing operations offered to potential clients. These are Onshore, Offshore and Near-Shore operations. The most fitting choice varies depending on the company in question, the industry in which it operates and their organisational structure. Some may benefit most from a mixed approach while others may only require one, with cost being a key determining factor.

Onshore

Onshore outsourcing refers to a practice in which the BPO company operates within the same country as their client. This typically costs more with the added benefits of easier acquisition for culture fit and the required languages as well as the option to have closer oversight of operations.

Near-Shore

Near-Shore outsourcing has operations within the same geographic region as the client without being in the same country. This method doesn’t facilitate the expansion into other time zones but costs less than Onshore operations.

Off-Shore

Off-shore is the lowest investment form of outsourcing and comes with the advantages of easier expansion, cost savings and a wider range of available languages. However, it does offer the least amount of operational control and presents higher security requirements.

The advantages of Business Process Outsourcing

The advantages of partnering with a BPO vendor in an increasingly dynamic modern business environment are abundant and ever-expanding. Not all organisations are structured in a way which notably benefits from outsourcing, however those that are typically witness an increase in performance at lower cost. Below are some of the benefits of Business Process Outsourcing.

Cost Savings

The most discussed benefit of outsourcing is cost savings and efficiency. BPO companies talent acquisition abilities facilitates the hiring of high-quality employees at a lower cost. This can significantly reduce the overall operating costs of the outsourced service.

Consultation and Risk Management

BPO companies will often have deep expertise in their field and can provide insightful consultation for their clients. This expertise offers accurate threat detection and forecasting capability to the client, allowing them to mitigate potential risks.

Language Access

As companies expand into new markets, they inevitably develop the need to provide multi-lingual services to their customers. The process of acquiring talent in new countries is often costly and time consuming. BPO providers are structured to hire staff rapidly in multiple languages across countries, while also eliminating the requirement to set up foreign entities in new countries or hire recruiting agencies. Instead of stagnating, BPO clients can focus on other areas of the expansion while the rest is taken care of.

Flexibility

The importance of being able to adapt cannot be understated in modern business. As the rate of change increases, some companies are left in a proverbial tug of war between operational mobility and robustness when reviewing their long term sustainability. Many companies also have seasonal or unforeseeable surges in demand. When this happens, the need for new staff arises but is replaced by overstaffing issues after the surge has passed. BPO providers are able to rapidly implement temporary teams to meet demand and remove them just as quickly. This can provide considerable savings by eliminating recruitment, training, onboarding and offboarding costs.

Accelerated Expansion

When scaling rapidly, the greatest decelerator in doing so is often the hiring process. Interviewing, onboarding, and training new employees comprehensively takes time. Leadership also must increase proportionally to the overall expansion, which is an even more carefully deliberated and extensive process. BPO providers are able to streamline team expansion with their existing talent acquisition networks and are likely to have existing staff that are ready to enter team leadership roles. This enables BPO clients to scale their operations at a pace that would otherwise be unachievable.