May 21st, 2021

(BPO) Business Process Outsourcing – What it is and why it is a Growing Business Strategy

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(BPO) - A Growing Business Strategy - Featured Image

Business Process Outsourcing, or BPO for short, is one of the fastest-growing business strategies today. The convenience and cost-effectiveness BPO offers to businesses is the main reason for its growth. Today, it is implemented by all fortune 500 companies in some capacity or another.

All sorts of businesses use BPO. From Fortune 500 companies to small startups, BPO is in demand by all. It is utilized by for-profit, non-profit, and government agencies.

So, what is a BPO exactly? Let’s find out.


What is BPO?

In simplest terms, a BPO, or Business Process Outsourcing, is the process of one company hiring another company’s workforce to do their work for them.

As you can see, it’s just another name for outsourcing.

For example, say your company needs to have a call center. Instead of setting up an in-house call center, you simply outsource it to a BPO firm. This way, you not only get a fully functional call center setup instantly, but you also save up on the cost of hiring and training employees, as well as a host of other expenses associated with building a call center.

The term BPO also refers to a company that provides the outsourcing service.

 

What is BPO used for?

BPO vendors these days can handle almost all kinds of business functions. Your company can outsource your back-office and front-office tasks, as well as any process not part of your core business.

That way, you can let the other company (or companies) handle the non-core functions while leaving all your resources and focus for your core business.

BPO can be used for outsourcing an entire department—such as Human Resource—or just one service—like payroll.

 

What is BPO capable of handling?

Companies can outsource all sorts of work through BPO. BPOs can provide call centers, customer service, e-commerce solutions, IT support, quality assurance, accounting, and even healthcare. While most BPO companies are dedicated to one or two services, companies like Unity Communications provide all these services and more.

 

Why are BPOs now more successful than ever?

While outsourcing has been around for a good while, recent technological advancements have been the key behind the massive success of BPOs.

Cloud computing has never been easier and more accessible than it is now. In the past, the centralization of a database required expensive servers and employees to maintain those servers. With cloud computing costs declining year over year, outsourcing companies can effortlessly provide remote services and share their work in real-time without needing a dedicated server setup or upfront IT costs.

BPO companies are in a very competitive industry category. Businesses looking to outsource their work can pick from numerous outsourcing companies—each trying to offer better and cheaper packages. This is another reason why so many companies prefer to outsource their work these days.

For a BPO to be considered a top outsourcing company, it should provide the maximum amount of services to cater to all kinds of employers—all while being cost-effective and efficient. Unity Communications, for example, offers a myriad of facilities that any business can use. From front-office to back-office, Unity has all services covered.

What are the Pros and Cons of Business Process outsourcing

Pros and cons of outsourcing

Outsourcing has a ton of benefits, but it has its downsides too. So let’s take a look at the pros and cons of outsourcing.

Pros of outsourcing

Costsaving:

The most obvious reason for companies to consider outsourcing is to save operational costs. Opting for BPOs can save companies a ton in labor, equipment, office space, and utility bills.

Convenience:

Once a company outsources its work, the labor costs, equipment, office operations, utilities, independent contractors, and other associated costs are all the BPO’s responsibility. The client’s work ends after hiring the BPO.

More time for core business:

By outsourcing your side projects, non-core tasks, and projects that aren’t your forte, you can focus on your core business more effectively. At the same time, you’re also letting a capable and dedicated workforce handle the work you’re can’t manage yourself effectively.

More work done in parallel:

By hiring multiple BPOs to take care of different parts of your business—or hiring a single BPO to do all those—you get more work done in parallel. While you’re working on project A, the BPOs take care of projects B, C, D, etc. As a result, you get more work done in a shorter time.

Access to a worldwide workforce:

Outsourcing your work means you can give it to anyone in the world. You’re not geographically limited to utilize the labor in your area. Access to a global pool of employees allows you to hire the best of the best, wherever they are.

Round-the-clock availability:

Outside of your work hours, your business doesn’t do much. But by outsourcing your services, you can significantly cut down the downtime.

Take customer services, for example. Ideally, you’d want 24/7 availability for your customers. By outsourcing your night shift to another part of the globe, you can provide your customers with round-the-clock availability.

 

Cons of outsourcing

Language issues:

Sometimes, a very capable BPO will have trouble communicating in your language. Even if they speak your language, there are always cultural barriers. In short, the chance of misunderstanding between the client and the BPO is ever-present.

In this case, you’d have to be extra careful and extra clear during communication. Chances of misinterpretation are high when working with someone who doesn’t speak your language natively.

Misunderstanding priorities:

Although rare, there’s a possibility that the work you’ve outsourced doesn’t get the importance you expect. When you’re physically present with your employees, you can push them to prioritize some tasks over others. Since you can’t be with your outsourced workforce, there can be misunderstandings about priorities. To counter that, check in with your BPO regularly to ensure the workflow is according to your liking.

Risk of data breaches:

Many companies that first consider outsourcing are afraid of data theft. Outsourcing often requires sensitive data to be shared between the client and the BPO; the risk of having your data leaked or misused is always there. However, this risk is also present with traditional, in-house employees. On the other hand, BPOs have improved their transparency to help their clients watch their every move.

Risk of fraud:

When outsourcing, most clients look for the quality of work above all else. However, some people try to cut costs a bit too much and end up hiring shady BPOs. These BPOs are usually new and promise too much for a small price.

With such BPOs, the risk of fraud is palpable. The client loses their money and is left high and dry.

 

(BPO) - The future of Business Process Outsourcing

What does the future hold for BPO?

Technological advancement has been the primary driving force behind BPO becoming a dominant business model in a matter of a few years. Existing tech is improving day by day, whereas constant innovations are making remote work more effortless than ever.

Lightning-fast internet is making it easy to share large files in a matter of nanoseconds. As connectivity improves, communicating with people anywhere in the world has never been easier.

As computers become smarter, automation becomes simpler. Businesses will soon be able to outsource their work to computers and AI. Even today, the technology is more than capable of handling most tasks that require a human workforce.

BPOs of the future would surely want to tap into the cost-effective and error-proof workforce of robots. Robotic Process Automation, or RPA, is already proving to be a viable alternative to full-time employees.

BPOs have been incredibly successful in developing countries, which have adopted this business model to their advantage. In many of these countries, there are entire sites dedicated to BPOs. This model has increased employment and has made excellent use of each country’s skilled labor. More and more countries will adopt BPO soon, providing an efficient and inexpensive workforce for businesses to hire.

The increased competition will also lead to better services, more transparency, and more competitive pricing. In turn, this will benefit small businesses, and startups looking for the best bang for their buck.


Final words

No one is a master at everything. Everyone comes across a job that is beyond their expertise. Instead of wasting time training your staff, procuring equipment, and pulling your attention away from your core function, let someone else do it. Someone better equipped with a dedicated and highly skilled workforce.

Outsourcing each non-core function to a BPO can be pretty confusing and laborious. That’s why it’s best to go for a BPO that can handle every task you’d want to outsource. At Unity Communication, we take care of the front and back-office tasks through expert teams of highly-trained individuals. Schedule a meeting now to know more about our services.

Without a shadow of a doubt, BPO is here to stay. Developing countries have an immensely talented workforce to spare, whereas businesses are always looking to get the most work done with the least effort.