What is Business Process Outsourcing (BPO), anyway?
Do you handle the accounting in your company?
Or: In your company, is the accounting handled by a professional or internal department, with directly hired employees, or is the service performed by an accounting firm?
In the vast majority of companies, bookkeeping is done by specialized external offices.
This is nothing more than a form of BPO, or outsourcing of processes, if you prefer.
Let’s define what BPO stands for, so you can understand it a little better – Business Process Outsourcing – clear and objective:
What is BPO? It is the practice of selecting some internal company processes and passing the responsibility of their execution to other companies that must deliver the agreed results between the parties and follow the procedures determined by the contracting company.
Is the concept of BPO a little clearer?
Okay, but have you ever stopped to think why this happens? Why do some companies prefer to use outsourcing and leave some of their processes in the hands of others, rather than performing them with their own resources?
That’s what we’ll cover in the next topic.
Before that, check out this video that shows the benefits of using BPO.
Why use BPO – Business Process Outsourcing – in your company?
To understand this better, we need to understand some features of the BPO service we used as an example, just above: accounting:
- It is quite technical and specific
- It’s not usually the core business of companies (the activity that generates profit for the business)
- It is not a key business process (that is, it doesn’t offer a competitive advantage )
- There are several competent and specialized companies in the area of expertise
These are the 4 main characteristics of BPO services used by companies.
Here are some examples of heavily used BPO services:
- Help desk
- Development of applications
- Web design
- Publicity and advertising
- Content marketing
- IT – Information Technology
- Financial services
- Office cleaning
- HR processes – Human resources
But stay tuned for a detail, which we mentioned above. Not being the core business of a company does not mean a process must be outsourced.
For example: information security is not the core business of banks, but they do not outsource this area because it is vital to the success of their business.
But why is it so important that your company chooses a BPO service that is not your core business?
Well, it just means you can focus your efforts on your core business, the one that keeps your business running and bringing in revenue, and outsource what is not so important.
But this is just one of the advantages of BPO – Business Process Outsourcing. Let’s see some more of them
Understanding Your Business Process Outsourcing Needs
The decision to outsource business processes is an important one. Outsourcing comes with myriad benefits—increased focus, better customer service, cost efficiency, and more. But no two businesses are alike. To ensure success, you need to understand your individual needs when it comes to outsourcing. Here’s how.
Identify Core Tasks
Identifying your organization’s core tasks can be enlightening when considering your business process outsourcing needs. Managing functions related to your primary service or business offering is where your team truly shines. It’s best to keep the heart of your business in-house.
Identify Tasks That Are Repetitive or Specialized
Now that you’ve gotten to the core of your business, you can consider which peripheral tasks might make good candidates for outsourcing. Repetitive administrative tasks, specialized tasks that require a skillset you lack in-house, or brand-building tasks like customer care are good places to start.
Define Your Brand Goals
A strong brand is so much more than a logo, or even just a product. It’s your business’ personality and set of values. If you want to build loyalty and trust, you must clearly define your brand. Customers value consistency, knowledge, and a personal touch. Can outsourcing help you achieve your brand goals?
Consider the Costs
Your budget matters, and you must make decisions that are sustainable for your business. Though outsourcing is an investment dependent on the types of services you need, it can often be a beneficial cost-saving solution. Slashing spending on in-house office space, supplies, and full-time salaries can amount to significant savings.
Determine the Amount of Flexibility You Need
Is your business growing too quickly to keep up? Do you go through seasonal ups and downs? You require scalable support. A common misconception about business process outsourcing is that it’s a zero-sum game. That’s simply not true. In-house labor is actually more rigid, while outsourcing can be supple. Determine the amount of flexibility your business needs before looking into outsourcing options.