Business Process Outsourcing is one of the trendiest phrases used in the business world. And while many companies know that it is somehow beneficial for business development, rarely can they explicitly define the concept or outline its benefits. Our team decided to sort out the trends, cut out the rumors, and in simple words explain what Business Process Outsourcing is and how your company can benefit from it.
What is Business Process Outsourcing?
Business Process Outsourcing, mostly known as BPO, is the business strategy of delegating non-core business processes to the external third-party vendors. Rarely do companies outsource their core business activities since this basically equals sharing industry secrets and internal practices to the competition. Most often you can see customer support, data entry and processing, web development and design to be outsourced by a firm.
Who benefits from BPO?
The simplest answer — everyone! Large magnates of worldwide corporations as well as small businesses from niche industries can equally enhance their business performance by outsourcing business processes. You might have heard of the companies like Microsoft, Netflix, Samsung, BBC, Harley Davidson Motorcycles — they all outsource particular processes of their enterprises.
However, a small messenger app can outsource customer support, or a shoe store can hire a web designer to turn their online store into a UX masterpiece. Regardless of your company size, outsourcing particular business processes can prune your inputs or boost business performance with the fresh savvy minds on a team.
What are the benefits of outsourcing business processes?
One may name a wide range of benefits that a business adopts while delegating internal processes to a third party. We will take a look at the most important and weighty reasons for BPO.
1. Higher efficiency
Offshore companies that are hired by a business to satisfy particular business needs have the greatest motivation — payment. The better job they do, the more satisfied the business owner is, and hence the more money the job can bring to the outsourcer. As a result, all outsourcing companies are extremely responsible with the deadlines they agree upon, the service they deliver, and the quality of their work.
If they do their part of the deal inappropriately, they do not get paid. This is one of the greatest motivations for the outsourcers to deliver everything on time and in the best shape. When it comes to the in-house teams, they mostly get paid for the working hour, regardless of the result at the end of the day. So you see the difference in motivation and so level of liability.
2. Exquisite responsibility
Efficiency goes hand-in-hand with responsibility and motivation here. Outsourcing companies try to stick to the deadlines and cornerstones since failure to deliver a developed app on time may result in major profit losses for business and so the loss of payment to the hired third-party vendor.
3. Transfer of experience
Outsourcers have extensive experience! They know their service inside out because they follow the trends, attend workshops, and do everything possible to stay competitive in the market. Whenever a business hires a BPO service, it receives knowledge and expertise of the offshore team that works for the business.
Whenever the third-party representative cooperates with your team, whether they want it or not, they share their experience with your in-house employees and so increase your business knowledge base significantly. So by hiring an outsourcing team for some internal operations, you get experienced professional help and perfect focused “lecturers” for your business team.
4. Lower price of highly educated experts
Your local market might be filled with highly educated experts but their price range is likely to bite your budget, especially if your company is based in the US, UK, France, etc. However, there are professionals who have the same knowledge but require a smaller salary for the same services due to the peculiarities of their local pricing.
So by outsourcing business process in countries like Ukraine, Philippines, or India, you can get the same (if not better) quality of service at a significantly lower price. Moreover, outsourcing also comes in handy whenever your state, city, or area does not deliver the experts you need.
5. Lower operational costs
A full-time or a part-time employee requires investment in their well-being. As a business owner, you will face the so-called “hidden costs of in-house” employees. Be ready that you have to pay taxes for every single employee, you need to provide them with insurance for their health and compensation in case of any injuries.
Add to that overhead costs for keeping an employee in place (workspace, equipment, software, workplace perks like gym, cookies, tea, etc); and do not forget about the retirement plan for every worker. All these points add up to the pretty high expenses of keeping an employee in-house.
Whenever you hire a business process outsourcing company, you only pay for the working hours of its employees. You do not need to waste money on all those “perks” and you can literally free your mind from such thoughts and turn it into more business-related matters.
BPO allows business owners to be flexible in many respects, such as budget, human resources management, and focus on particular business development aspects. Whenever the service provider (the BPO company) stops satisfying the needs of a business, the owner can layoff these employees without any consequences to the business and hire a new more proficient company.
Besides that, since business process outsourcing cost is lower than the salary and benefits of the in-house employees, a business receives an additional budget that can be spent on development, enlargement, or any particular underfunded business part.
Since outsourcing frequently comes to the countries in Europe or Asia, time zones play into the business owner’s hands. This means that your team is working, let’s say, 9 to 5 and when your employees go to rest, the outsourcing company steps in to continue running your business.
So the working day of your company extends to at least 16 hours a day, giving you greater productivity and hence competition advance in the market. Moreover, if your outsourcer is doing the same job as your internal team, then whenever you leave something unfinished and the next day come to work, all tasks are done and ordered; what employer could resist this?
8. Adaptation to the market needs
As mentioned above, outsourcers keep abreast of market development and changes. This means that the methods and goals they set are always aligned with the demand and needs of the end-users. By hiring a BPO services provider, you receive a possibility to always be in trend, always deliver the highest results to your audience, and always stay ahead of the competition because your business will always adapt efficiently to the rapid changes of your business niche.
Common fears of BPO
Here we will try to discuss the worst fears business owners have about BPO and explain why they are not disadvantaged at all.
Data protection: Yes, businesses that work with data-sensitive information about their users might be afraid of data breaches and leaks from a third-party vendor. In reality, no such things happen. Ever. When your business hires a BPO service, you sign a number of contracts and agreements that protect your users with your business and ensure that the BPO is responsible for any breaches.
Moreover, very often business process outsourcing companies have top-notch security protection protocols in action because they care about reputation and safety even more than the business owners.
Unexpected costs: BPO has no hidden costs. Whatever you pay for the service, you have on paper in your contract. No more, no less. However, unexpected costs may always appear. For instance, you need to get one more page in your app, or your website design needs to change drastically. These are all costs that are not related to outsourcing, but rather to the day-to-day processes and market changes.
Loss of control: Business process outsourcing companies are working for you; they are your employees that do particular tasks on behalf of your company. You always stay in charge of anything that might happen. Remember that BPOs aim not to overthrow you from your post but rather to assist you with reaching your goals.
Disruption (the fear of novelty): A lot of business owners are afraid that cooperation with the overseas team will bring disruption into the daily process of their business. This is not right. You and your workers will have work-as-usual with some additional assistance from the third party that will take the workload off your office. Moreover, the operational changes are always thoroughly discussed with the vendor to ensure a smooth and effective transition to the new working model for a business.
Cultural differences: Cultures are different, it is true. But always remember BPOs aim at helping you and will adjust to your mentality business processes as much as possible. They aim at pleasing your business, not vice versa. This means that overseas experts are used to working in the international environment and know the universal business rules. However, if you have some particular stances on business etiquette, you only need to verbalize it, and the vendors will follow your rules.
To sum up
Business process outsourcing can help a company use its budget wisely and assist in reaching the business goals faster and more efficiently without sacrificing quality. This model of business running has already proven its profitability in the world. So delegate your tiresome and boring processes to a third party and make your employees happier and business more prosperous.