What Exactly Is Business Process Outsourcing?

October 16, 2018

On average, full-time employees in the U.S. clocked in a weekly 42.8 work hours. That's a little more than eight hours a week.

But, don't forget they go on breaks too, which is about an hour and a half every day. This brings their total actual work week to only 35.3 hours!

That's not all there is to deduct though. A study found office workers spend about one-third of their work day on admin tasks. That's a lot of hours spent on tasks they could otherwise use for say, sales, and marketing opportunities!

Enter business process outsourcing services. These can help ensure your employees spend less time on admin tasks and more on actual work.

But what exactly are these outsourcing services? How in the world can they take your business to the next level? Keep reading, as we'll answer all these questions and more!

The Core of Business Process Outsourcing

The business process outsourcing sector in the U.S. is big - we're talking $135 billion in revenue. This should already tell you how so many businesses - and their customers - rely on such services.

But before we tell you why your own business needs it, let's get the definition of these services out of the way first.

Business process outsourcing (BPO) is a practice wherein one organization hires another to perform work. This work can be any essential operational process or administrative task. The hired business (third-party provider) then carries out these tasks in place of their client's in-house employees.

The third-party company employs its own people who then complete the assigned work. Many BPOs have their own facilities, so their employees work on-site. Others also have remote workers who provide professional services anywhere in the world.

Today, outsourcing services can take on almost any business process. IT has the highest demand, though. 72% of surveyed organizations said they outsource these services.

In the same survey, 63% reported outsourcing legal services. Outsourced real estate and facilities management, human resources, and finance are also common.

Flexibility: The Primary Advantage to Outsourcing

Flexibility is no doubt the primary advantage offered by business process outsourcing.

Think about it - if you outsource admin functions or non-core tasks, you can free up a lot of time. Remember, those hours spent on such tasks are valuable billable hours.

Since BPOs take over these functions, you and your employers have more time to concentrate on what you do best. You can focus on improving and strengthening your business' core competencies. By perfecting your core operations, you gain a competitive edge over your competitors.

At the same time, you can rest assured the people working on these non-core tasks are pros themselves. They also specialize in what they do. This then eliminates worries about compromising quality, even if they're only "admin tasks".

Outsourcing Reduces Overhead Costs

Did you know you'd spend more to acquire new hires than what you'll pay them for when you hire them? The pre-employment process alone can already cost you a lot! Aside from actual employment screening expenses (think background checks), interviews also require time.

Let's not forget about the salary of an in-house employee. Take a secretary, for instance. Their average yearly salary is almost $31,000.

Outsource a secretary's typical tasks and you don't have to worry about shelling out the same kind of money. That's right, you can outsource similar services, like appointment scheduling and setting.

Delegate Tasks as Needed

Speaking of which, you can actually choose to outsource only the functions you need help with. If you need someone to handle sales and development, you can choose to outsource only that. The same goes true if you only need help with lead generation.

Either way, you can save quite a lot since you don't have to hire a full-time, in-house employee. You contract only the services you need help with, and you pay only for those services.

Of course, if you need people to handle customer service 24/7, BPOs can also deliver. They offer flexible work schedules, be it full-time, part-time, or round-the-clock.

The Customer Service Advantage

In the U.S., the call center and telemarketing sectors make up a $24-billion industry. That figure alone already implies how important the industry is to the economy. From a business' point of view, it's as important, seeing as it's key to customer service.

To put things in perspective, take a look at these stats involving customer service:

  • U.S. businesses lose as much as $62 billion every year due to bad customer service
  • After one bad experience, six out of 10 customers won't do business with the same company again
  • 70% of consumers say they're fine spending more money on a business that gives them great service

What do these figures tell you?

First, excellent customer service means exceptional customer experience. By meeting your customers' standards, you can then keep them happy and satisfied. Which brings us to the next benefit of outsourcing: higher customer retention.

Increased Customer Retention

BPO services are professional services. Whether they work in the IT, accounting, or customer service, they're all trained in what they do. Because they know what they're doing, they can then cater to whatever their customers need.

As the business that'll hire the BPO, this means you don't have to worry about the quality of service you'll get from them. This then lets you focus on ensuring your core operations satisfy your own clients. You can concentrate on producing the best output possible, which then leads to happy customers.

Happy customers are those willing to remain loyal to businesses which meet their needs. In fact, they can even become ambassadors of your brand. Or at least, be one of the 77% of customers likely to give recommendations about your business.

Outsourcing Can Make Your Own Workforce Happier and More Productive Too

Within every 5 highly-engaged employees is 1 at risk of burning out. Granted, there are many possible reasons for workplace burnout. But, "unreasonable workload" is one of the most common.

This includes letting your workers carry out tasks that aren't part of their job description. Keep doing this, and you risk having them quit and leave your company. Not only will this cost you a lot - it'll also cost you valuable, even irreplaceable talent.

This is why you should consider outsourcing some of your business processes ASAP. This way, you can keep workplace stress levels down and instead, make your employees feel happy to work for you.

Outsourcing Can Help Your Business Grow

The bottom line is, business process outsourcing services are bottom line-boosters. At the same time, they also help cut your expenses, which reduces the need for more business loans. All these can then lead to business growth, resulting in even more profits.

So, as early as now, take a closer look at the tasks you can delegate to outsourcing companies. Once you're ready to outsource some of them, feel free to connect with us. We'll be more than happy to address your BPO-related concerns.