Business Process Outsourcing (BPO) is a form of outsourcing where one organization delegates one or more business processes to another company. The business functions that are most commonly outsourced are customer support, back-office, payroll, HR activities, data entry services, market research, etc.
Moreover, the concept of BPO has been evolving. Nowadays, BPO services also include domains that require specialized skills such as social media analytics, software development, search engine optimization, and so on. These areas are also known as Knowledge Process Outsourcing (KPO). From promising startups to Fortune 500 companies, organizations of all sizes outsource processes, and the demand grows as innovative services are introduced in the BPO services that lead to competitive advantage.
Advantages of Business Process Outsourcing:
There are many reasons agencies decide to outsource their processes. For a few of them, it is a strategic decision for gaining a competitive advantage. While for others, it is just more sensitive to manage the particular processes efficiently. Below are the few benefits that firms experience given the situation that the functions are outsourced to the best BPO companies.
The greatest benefit that organizations are experiencing while using BPO services is cost savings. Typically, in businesses, a large portion of their finances is incurred into manpower. However, it is not possible to perform all businesses within the company. Because it includes the process of hiring, onboarding which is time-consuming as well as expensive.
Hence, BPO can be a perfect solution for any size of firm in terms of allocating resources efficiently when it comes to employees and business processes. Since the outsource third-party vendor is offsite, there is no need for concern about the manpower, office space, materials, etc. as they are maintained by the outsourcing partner.
It is a proven fact that organizations tend to stay in their wheel tracks for a longer time when they are outsourcing their non-critical business processes to the outsourcing partner. In this case, they can successfully manage their business criticalities more efficiently while paying almost negligible attention to the less complicated functions.
To be more competitive in the overseas market, it is of utmost importance for agencies to find and continuously improve their expertise and skills on services and products that they are offering. With non-critical processes handled by outsourcing partners, organizations find more room to become more efficient on their products thus tapping more customers in their respective target market.
Efficient allocation of resources is the key to success for any business. When a company outsources its nosiness functions to outsource vendors, it is like that the vendor will spend time and expertise while delivering the project on time. Hence, they can allocate their resources to the core business activities and employees for better performance.
With scaling businesses, often companies enter into a foreign market. The most common problem that firms face that has businesses spread across the globe is time zone. If the company is headquartered in Sunnyvale, then it will be difficult to expand their businesses in different countries of Asia and Australia, when you can’t have employees available for each time zones of those countries. Instead of opening offices in various countries, it is more efficient and cheaper to hire a BPO service provider located in those areas.
Outsourcing firms that are specialized in handling financial services and processes provide better security and safety from cyber theft and cybercrime. For a small-medium-sized business, it is difficult to hire a safety and security team for monitoring security measures against cyber theft.
If a company thinks to enter a foreign country, then for some activities it requires national law expertise, local market knowledge, knowledge of target audience, and communicating with them. In this scenario, hiring a BPO company helps in the quicker expansion and boosting efficiency. For example- If a US-based company is entering the French market, then hiring a local partner company with native manpower helps in greater business expansion.
