What is Business Process Outsourcing?
Business process outsourcing, or (BPO) is the process of contracting specific tasks or processes to an external service provider. Companies of all sizes outsource processes, from small startups to large Fortune 500 companies. Some will outsource one task while others will outsource several tasks and processes. The outsourced team is responsible for handling all of the operations for the particular function.
To put it simply, a company hires a third-party company to work for them. They hire the third-party to handle specific tasks that they specialize in. In 2020, BPO worth $92.5 billion worldwide.
While outsourcing has been around for decades, it’s getting increasingly popular with the number of companies choosing outsourcing as they are seeing the many benefits of outsourcing.
Types of Processes Covered by BPO
The most common processes outsourced are front office and back office which include.
Inbound support – When your customer calls or texts in or sends an email or contacts on a social media platform, your outsourced team will handle the communication to ensure your customers get a quick response. Customer support basically will be your right hand man to handle all of your customers questions, problems and needs. They could also handle sales and account activation.
When a customer contacts you with a question or need they want an answer almost instantly. Your outsourced team will be available to handle all those needs when you’re not able or when your focus should be on other tasks.
Social media is booming and you will get many prospects and customers contacting you from there. Your BPO team will be on it for you so your customers will feel they’re important and taken care of.
Back office – Back office is the mundane paperwork that a lot of business owners dread doing. But the back office is the backbone of a company and what keeps the business going. Your BPO team will handle these tasks for you.
Web and software development – Some BPO companies also have developers that specialize in websites and more complex business applications that will build solutions to streamline your business processes and provide support to you and your customers.
Graphic design – With marketing you’re going to need a graphic designer. It’s not something you want to wing by trying to do it yourself. Marketing pieces are the face of your business. You want them to look professional, set the right tone, but more importantly get the recipient to respond. Your graphic designer will ensure all of your marketing is cohesive and sticks with your company’s branding.
There’s a reason the BPO industry is expected to grow by $108.3 billion dollars. It helps businesses run effectively and scale.
Of course every company is different and their needs are different which is why most BPO companies are so flexible. Your company may benefit from outsourcing one task or process and another company benefits most from outsourcing several.
Companies can outsource one function or several depending on the wants and needs. Most BPO companies offer flexibility and adjust depending on their clients’ needs. Many companies aren’t aware how much BPO could benefit their business. The most successful business owners or entrepreneurs have the ability to adjust, adapt, problem solve to find more efficient ways to their processes with running their business. In fact, the ability to identify problems and find innovative solutions is key to business success.
Businesses owners who choose to do everything themselves are not as successful as ones that get help. There’s so many tasks and processes that need to get handled to successfully run your business. To really scale your business and be a top dog in your industry it will take getting some help to alleviate some of your tasks.
You don’t want to wait until your ship is almost sinking before you get help. If you really want to grow your business then you will want to get help quickly. Don’t just try to fix problems as they come up, solve problems before they even arise. It is the way you will have continued growth for your business.
How Does BPO work?
An organization sees the benefits of outsourcing their business processes and makes the decision to find a partner. Finding the right partner is key to successful BPO. One that you could quickly give some direction and insights on your business, your needs and goals then they hit the ground running. They should already have the infrastructure, staff and technology to start right away or when you have needs.
You should stay in communication with them and work with them like they are part of your team, an extension of it. They would help you save money getting the tasks done quickly and efficiently. Ideally, They would have similar values and culture as your company so you build a close tight knit business relationship.
Choosing the right BPO model
There’s a few types of BPO’s:
- Onshore outsourcing: Meaning a company hires another company in their same country.
- Offshore outsourcing: When a company hires a company from another country.
- Nearshore Outsourcing: It’s referred to when a company hires another company for a neighboring country.
- 57% of businesses outsource processes since it helps them focus on their core processes.
- 31% of organizations saw a rise in service quality with outsourcing.
- 78% of organizations find they have a positive relationship with their outsourcing partners.
There are many benefits of outsourcing your business processes. Here are a few.
1. Cost savings
There are many cost savings to business process outsourcing. Mostly from not having as many full time employees you have less overhead from not needing as big of an office with utilities and supplies for them.
2. Less business admin
The boring admin side of running a business is a common one to be outsourced because it’s time consuming and not revenue producing. Basically it costs you money but it’s what’s needed for you to run your business. You give your BPO team a little direction of how you want the tasks completed and consider it done.
Rather than hiring a full time person to handle a specific task you could outsource when needed so you only pay for the services you need at that time. Need 24/7 service? No problem! Most BPO companies are flexible and could provide round the clock service. It will give your business the upper hand if your competitors are not offering the same availability.
4. Core tasks get your full attention
You’re a complete expert at what you do, it’s your speciality, your passion. But all the paperwork and extra stuff that needs to get done to effectively run your business is not your speciality and sometimes down right boring. It could drag you down and make you less productive and sometimes burn you out. Outsourcing some of your business processes will make you more productive so you could focus on the parts of your business you love to do.
When you outsource some of your business processes you will have more time to strategically plan ways to scale your business and increase profits.
5. Happy customers = increased revenue
When you find the right business process outsourcing team your business but also your customers will reap the benefits. Your customers will get their questions answered and their needs met quickly without having to work with an overwhelmed owner or employee who has too much on their plate. When you provide exceptional customer service your customers will come back to buy again and send their friends and family yout way. You also get the benefit of charging a little more since people are willing to pay slightly more for better service.
Business process outsourcing is just hiring another company to handle certain tasks or functions your business needs to run smoothly. Although businesses most of the time outsource non core functions, they do still outsource critical tasks, such as customer service, back office, financial services and IT operations.
The outsourcing industry has grown from nothing to a multi-trillion dollar industry worldwide. Business process outsourcing works for small start up businesses to large multi million dollar businesses. A business has the flexibility to outsource the tasks or processes they decide would help them streamline processes and cut costs.
Since outsourcing some tasks saves a company money they could use the savings towards other things that would help their business grow and increase profits. It’s a win-win.
Try outsourcing for your business and you will see why so many companies are jumping on the bandwagon and outsourcing their business processes!