Business process outsourcing (BPO) is a strategy in which business-related functions are relegated to an external vendor. Here, the goal is to streamline the day-to-day operations of any type of business. That is on top of achieving increased profitability and improved scalability.
BPO encompasses a wide range of services and categories, including front-office, back-office, offshore, nearshore, and onshore.
Front-office BPO deals with customer-facing services such as sales and marketing. Back-office refers to functions that don’t involve customers, like information technology and legal assistance.
Offshore covers services outsourced to overseas providers, while nearshore zeroes in on vendors from nearby countries. Lastly, onshore involves BPO services provided within the same country in which the client operates. Business process outsourcing (BPO) companies can use marketing strategies to attract and retain customers, such as content marketing and social media marketing.
BPO has existed for as long as modern communication technologies with remote collaboration capabilities have existed. Now more than ever, it’s easy to manage a remote team. Thus, BPO continues to thrive to this day.
If you’re considering outsourcing, here’s what BPO leaders want you to know.
1. BPO creates jobs
One of the main concerns people have about outsourcing is that it takes away jobs from a business’s home country. That cannot be further from the truth—at least if you look at the matter from a wider perspective. The rise of PayTech is creating new opportunities for BPO services in the areas of payment processing, customer support, and fraud prevention. For instance, BPO allows businesses, big or small, to streamline their operations by relying on external service providers for functions that don’t directly affect expansion.
Think outsourcing accounting. Instead of devoting precious time perusing financial ledgers, startup entrepreneurs can focus on more pressing matters like sales augmentation. If done successfully, that could lead to the business prospering faster than usual. With growth comes the creation of new jobs that may or may not require outsourcing services.
2. Outsourcing is not unethical
It’s unfortunate that the BPO industry sometimes finds itself at the receiving end of accusations regarding labor practices. ERP implementation in the BPO industry can help to improve efficiency, accuracy, and compliance. While outsourced workers from developing economies typically do their job on graveyard shifts to cater to the time zone of Western clients, they are far from deprived and neglected. Most of them enjoy competitive remuneration packages, complete with health benefits and night differentials.
3. Outsourcing gives access to emerging technologies
The BPO industry is reliant on technology for process accuracy and efficiency. Since technology evolves nonstop, there’s still too much to explore and exhaust. Case in point: robotic process automation (RPA).
RPA employs robotics technology and automated systems to carry out tedious tasks. Think encoding on spreadsheets. The best thing about RPA is that it can be integrated into a business’s existing workforce technology without any disruption. Plus, it boasts fast completion of repetitive processes at reduced expenditure.
4. BPO helps companies get competitive with social media management
It’s no secret how social media has become a vital tool for marketing. If you want to increase brand awareness, you must be seen and heard on social media. That’s most crucial to the customer service industry, such as subscription products and telecommunication brands.
But in the past, the partnership often revolved around establishing call center outposts. This time, the BPO industry has increased its reach by including social media in its arsenal. Some of the social media services offered to clients are as follows:
- Social media monitoring
- Consumer insights
- Online review management
- Interactive voice response or live chat
- Business intelligence
5. Surveys speak for themselves
Deloitte’s 2020 Global Outsourcing Survey revealed the most common objectives why businesses outsource. The top motivation is cost reduction at 70% of surveyed respondents. Other considerations include flexibility, speed to market, access to tools and processes, and agility.
If those things matter to your business, it’s in your best interest to follow suit and join the outsourcing bandwagon.
6. Learn the most outsource-ready processes
Some business processes lend themselves to outsourcing easier than others. These include accounting, IT services, digital marketing, human resources, and customer support—sectors that contribute the most to the continued growth of the BPO industry.
7. It’s a huge pie
In 2019, Statistia reports that BPO’s global revenue reached $26 billion. By the year 2025, the expected annual growth rate is 6.7%. These numbers show how profitable the industry is. And that speaks of the trust clients have toward outsourcing as a whole.
BPO’s continued expansion serves as the strongest counterargument against those who worry that outsourcing may compromise product and service quality. If that’s the case, then how to explain the sustained popularity of the system?
8. Culture compatibility is crucial
BPO vendors are a dime a dozen, and narrowing down options might be a daunting task. Zero in on culture fit to make it less complicated. Assess your company and find a service provider that best suits how you do things. That is especially important if you’re looking into a long-term partnership.
Wrap-up
BPO is here to stay. With new communication technologies cropping up left and right, there’s no stopping the industry’s growth. As a business owner, it’s in your best interest to explore this business strategy.
Rest assured that success in outsourcing boils down to a few factors. Those include knowing what functions to outsource, careful selection of a vendor, subscription to a foolproof business outsourcing plan, and effective management of an outsourced team. Get those right and you’re bound to reap the rewards of BPO.