What does business process outsourcing (BPO) Mean?
It can be as outsourcing the processes of a business to an external service provider. If we describe it in easier words, it is a type of labor migration. BPO can give benefits to all types of businesses. It can have technical and non-technical services like social media marketing, customer support, accounting, data recording, telemarketing, and more.
BPO has two main types of services:
Back Office Services are the inside processes of businesses. It includes billing or purchasing. Front-office services refer to contracts of customers from the company, such as technology services and marketing. A Business Process Outsourcing can combine these services to work together in a single place instead of doing it individually.
The BPO industry has three categories which are based on the locations of the vendor.
- Offshore vendors are settled outside of the country of one’s own country. For example, any country can use any other area to sell out its products.
- Nearshore vendors can be found in the neighboring countries of the contracting company. For example, Japan can have its products sourced in South Korea or Indonesia for sales.
- Onshore vendors are located within the same country as the contractor. It can be a different city or state. For example, in different states like Chicago, Miami, or Washington.
Why Do Businesses Outsource Processes?
There are many reasons for which they outsource their business few of them described below:-
Concentrating on Key Functions:
It gives the company a chance to provide the customers with their services instead of giving their time and energy to their business process. They can focus on its business service quality to the customer.
It allows the company to act more efficiently and quickly by outsourcing its non-critical function and reassigning its critical functions to internal resources.
Outsourcing the business can result in less expenditure of cost, if the labor is coming from developing countries, then it will cost lower to physically run a company in the market.
Expanding the Global Presence:
Companies can expand their companies by outsourcing their brand to different countries. Hiring dual language speakers for better communication will help the business in both places.
Achieving Better Results in Non-Core Functions
A non-core function is specialized in outsourcing companies to provide an online global presence and services to its clients. Cutting-Edge technologies could be provided to customers if investments are made in specialized processes and technology.
To Improve Speed and Efficiency:
When a company hires specialists for their company, it let their company perform smoothly with the help of specialists. It can save time and improve their business.
The pros are already explained above. However, there are not many cons of BPO except getting a deceitful business partner. A person should always keep in view the pros and cons of a new project before starting it.
What Types of Services Do Outsourcing Companies Support?
Knowledge process outsourcing (KPO) has changed the Business Outsourcing Process a little bit. It supports the core and non-core functions of any business. It can also provide domain-based expertise. Research, analysis, or Microsoft Word and Excel work are some examples of KPO services. KPOs can make low-level business decisions without intervening in the higher-level business policies. However, those decisions can be omitted easily. Their vendors are associated with the business’s value chain, and they hire competent people.
Legal process outsourcing (LPO) is also a subset of KPO. It includes a higher level of work legally. Drafting patent applications and legal agreements and performing legal research are included in LPO. It can even advise clients. LPOs are usually retained by in-house legal departments.
It includes all the management from vehicle bookings and reservations to hotel rooms. For the Front or back-office process streamlining, many airline and travel companies also engage in BPO.
Information technology-enabled services (ITES) leverages IT over the internet to deliver services. Services desk analysts, production support analysts, and IT analysts are examples of ITES.
Research process outsourcing is a subset of KPO. RPO specializes in analysis functions and research. The company of RPO makes analysis work and research that supports marketing firms, investment, and business,
Manage Your BPO:
Make a list of your requirements and review your potential vendors.
Put together and choose the right vendor for your company. Negotiate the contract. Transfer the work and processes to your vendor and manage your communication.
Empower your people to go over and above and give them a platform to match the needs of your team. Get the Smart sheet platform to make it easy to report, plan, capture, and manage work from anywhere. Helping your team be more effective. Get real-time distinctness into work and report on the key to keep your team connected and informed.