What Is BPO (Business Process Outsourcing)? How Does it Work?
Business process outsourcing (BPO) is a process of subcontracting different business-related operations to other third-party vendors.
Although BPO originally was applicable solely to manufacturing entities, like soft drink manufacturers who used to outsource large segments of their supply chains, BPO is now applicable to the outsourcing of services, as well.
Understanding Business Process Outsourcing (BPO)
From small startups to large companies, many businesses opt to outsource processes, as innovative and new services are increasingly available in today’s highly competitive, ever-changing business climate.
Speaking on a broader scale, companies prefer adopting BPO practices in the two main areas of front-office and back-office operations. Back office BPO refers to those companies that contract its core business support operations like IT services, accounting, human resources, payment processing, quality assurance and regulatory compliance to outside professionals who make sure the business runs smoothly.
By contrast, front office BPO tasks mostly involve customer-related services like marketing, tech support, and sales.
Special Considerations
The breadth of a business’ BPO options are mainly dependant on whether it contracts its operations outside, or within the borders of its home country. BPO is considered as “offshore outsourcing” if the contract is sent to another country where there is lower labor costs, tax savings, and political stability. A business in the US using an offshore BPO vendor in India is an example of offshore outsourcing.
BPO is considered as “nearshore outsourcing” if the job has been contracted to a company in a neighboring country. This would be the case if a US company partnered along with a BPO vendor who is located in Canada.
The third option available is known as “domestic sourcing” or “onshore outsourcing”, occurs when BPO is contracted within the company’s own country, although their vendor partners may be located in different states or cities.
BPO is usually referred to as information technology-enabled services (ITES) as it depends on infrastructure/technology that allows external companies to perform their roles efficiently.
The Attraction of Business Process Outsourcing
Companies are usually attracted to BPO because it affords them better operational flexibility. By outsourcing administrative and non-core functions, companies could reallocate resources and time to core competencies such as product leadership and customer relations and, which ultimately leads to advantages over competing businesses in their industry.
BPO offers businesses access to the latest innovative technological resources that they could not otherwise have exposure to. BPO companies and partners constantly strive to improve their processes by adopting the most recent practices and technologies.
BPO also offers companies the benefits of accurate and quick reporting, ability to swiftly reassign its resources when required and improved productivity.
What Are the Advantages of BPO?
There are a number of advantages to BPO. One of the main advantages is that it helps to lower costs. Performing a particular job function internally costs a certain amount. BPO can lower these costs by outsourcing this job to an external agency, usually in a low cost-intensive country, reducing the overall cost of performing that specific job function.
Other benefits involve a company being allowed to concentrate on core business functions that are crucial to its success, instead of administrative tasks or other aspects of running a business that are not that important. BPO also assists with growth, particularly in terms of global expansion. If a company is interested in starting an overseas branch, utilizing a BPO company with experience in the local industry that speaks the language is extremely advantageous.
How Legacit Can Help Your Business Grow!
Being industry leaders in the BPO and Call Centre space for many years, we have developed unique insight into how the BPO industry functions and how this edge could help you reap all the benefits with a fast return on investment. We mainly focus on ensuring that your business benefits from a wide pool of talent with the correct mindset, ensuring that you can wow your clients on each interaction right from the initial step.
By leveraging the latest technologies and methodologies in this field, and by developing an in-depth understanding of your line of work, we make sure that the integration is seamless and beneficial.
If you have queries about our services and would like to understand more of the benefits you could unlock from outsourcing your customer support or BPO services to Legacit, feel free to reach us at 0484 4348888 or mail us at info@legacit.com for more information.