The term BPO (Business Process Outsourcing) is gaining immense demand these days in the marketplace where businesses are outsourcing one or more functions to a third party. BPO is also called externalization or subcontracting. The service originally was used by the manufacturing industry for various business processes. The BPO industry is now taking newer heights because of its loads of merits. This read will inform you all about business process outsourcing services, their uses, types, and benefits. Just dive in!
What exactly is Business Process Outsourcing?
BPO is a type of externalization where a third-party service provider is hired to carry out one or a few business operations. This way the third-party will be held responsible to carry out the outsourced functions. Businesses approach a BPO services company to contract the vendors for their front office and back-office operations. There are loads of benefits that business process outsourcing services offer such as global expansion, productivity, lower costs, etc that you will see further in this read.
Main Areas for BPO
There are two main areas for which BPO vendors are contracted. They are as follows:
- Front office operations, which includes the services of customer relations, sales, marketing, and grievance redressal.
- Back office operations, which include information technology services, quality assurance, payment processing, etc.
Many businesses outsource their payroll processes or HR functions more often. The BPO industry is expanding for sure as it is offering a wide range of services for an organization.
Types of Business Process Outsourcing
The BPO services are divided into three based upon the location:
- Onshore outsourcing
It is also known as domestic outsourcing as the service provider resides in the same country as your organization.
- Nearshore outsourcing
When the service provider resides in the neighboring country, it is known as nearshore outsourcing.
- Offshore outsourcing
When the service provider resides in a different country then it is known as offshore outsourcing.
Merits of Business Process Outsourcing
Outsourcing a few functions of your business to a third-party service provider that are not related to the core has many benefits that are listed below.
Cost affectivity is one of the central reasons that businesses outsource their one or few business processes. A huge portion of a company is spent on the workforce. Hiring, training, and onboarding them are not only a timely process but are also expensive. If a company comes in a situation where it might not need enough work to hire and their employees are stretched too thin for most of their productivity, this is where a BPO service is a great help.
No matter what the size of your business, BPO services will help you in the wise allocation of resources especially in the case of employees. The third-party workers usually work in places where the cost of living is typically lower than usual. This is reflected through their compensation. Moreover, the third-party workers being offsite, you don’t need to worry about the expenses of office space and materials, resources, and equipment. This is how you save money on materialism and workforce through outsourcing.
It Saves Time
Business process outsourcing allows a business to save a considerable time. The repetitive nature of work that consumes hours on a daily basis when outsourced saves up time for a company to concentrate on the core business. The service provider will complete the task within the deadline while your office workers will not get overburdened and will achieve targets within time leading to more productivity. This in turn results in greater efficiency at the workplace.
Flexibility in Business
Outsourcing allows businesses to come up with greater efficiency in doing more with less money and time. This eventually leads to better growth and flexibility in the overall business. The growth of businesses is usually associated with a large scale and bigger workforce. But to be honest, this may prove to be a risk factor. BPO service reduces this risk allowing the business to ramp up activities efficiently and quickly and even support scaling back as needed. They are even great to help businesses scale up quickly especially in the growth phase.
Assistance in Short-Term Projects
Many times businesses have to work on short-term projects that require expertise and additional manpower. In such a scenario, hiring a new team is not a good idea. Outsourcing is the option that will work here. Approaching a third-party, you can give them a deadline for your project and there you go, they will run the project as seamlessly as could be while saving your time and money.
This was all about business process outsourcing from this read. If you are a business and are not sure whether to go for outsourcing, then you might have cleared your mind that outsourcing is a good idea that not only saves time and money but also enhances the productivity of a business.