The advantages of Business Process Outsourcing (BPO) allows for huge cost savings while increasing efficiency. Discover how BPO can benefit your business.
Business Process Outsourcing (BPO) has taken the business world by storm.
Organizations across the globe are increasingly looking to leverage the benefits of outsourcing. Understanding the advantages of Business Process Outsourcing can have on business competencies in an effort to generate more revenue streams for sustainable market growth is key.
With a total global market size of outsourced services reaching a staggering $92.5 billion as of 2019—now more than ever, BPO is an essential strategy for supporting a company’s overall operational goals.
Some companies categorize outsourcing into two separate camps, non-critical outsourcing or core outsourcing. Regardless, all outsourcing must be strategic, and for each business, the approach will vary.
In a 2018 survey, researchers found that the key BPO motivations were shifting from reducing operating costs to enabling speed to market, scaling faster, enhancing user experience, and achieving competitive advantage. However, in contrast, the latest research shows that while there’s still talk of scalability, agility, and innovation— businesses are now laser-focused on cost, with COVID-19 seen as a key driver of that shift.
With business requirements constantly evolving, other benefits, such as the so-called currency of technology; expertise and specialization; budget flexibility; and savings in training, labor, and infrastructure have also emerged as catalysts for BPO adoption in addition to the drivers noted above.
But as always, for both parties to extract maximum benefit from an outsourcing partnership, it requires a client’s readiness to invest and a willingness to be flexible on the part of a service provider.
In this article, we explore how outsourcing benefits businesses by saving time and money while improving efficiency and competitiveness.
Business Process Outsourcing Reduces Costs
One of the top benefits of BPO for most companies is cost-effectiveness.
Overall, outsourcing can often get a job done cheaper and more efficiently. With contractors, companies can leverage a level of expertise or specialization without the financial burden of a long-term employee commitment. Outsourcing on a contractual as-needed basis is usually a fraction of the cost of handling certain business processes in-house with dedicated employees.
Experienced contractors with a specialized skill set typically get tasks done faster as well. They spend less time on a job overall which in turn reduces overall business costs. As experts in their fields, specialized contractors are less likely to make the same mistakes as a less experienced in-house employee might.
Building and maintaining employee infrastructure is a costly overhead business expense. Outsourcing minimizes this expense for business, as the contractor accepts the responsibility for the business processes, and hence, develops and maintains the required area-specific infrastructure.
Technology is often very expensive, posing another limitation for companies looking to grow. When businesses outsource, the contractor largely bears the cost of maintaining current technology, including software and communications equipment. Outsourcing partners also bear responsibility for making necessary infrastructural changes to suit a business's needs. Additionally, the service provider is already familiar with the technology, further increasing efficiency while reducing operational costs.
There is also a huge wage disparity between professionals working in developed countries versus those in developing countries. For example, in India, labor costs are up to 60% cheaper when compared to labor in more developed countries. The key then is finding a balance between saving labor costs while maintaining high-quality work.
When you combine all of these factors—expert agents working with the latest technology and getting the job done faster—you end up with greater efficiency. And a more efficient process, by definition, saves you money.
Increased Productivity and Efficiency
How does business process outsourcing increase company productivity and efficiency?
When you outsource to a competent and skilled professional or third party, you double your resources for far less than hiring full-time workers. You also free up employees’ time to focus on other important areas.
Highly skilled experienced experts are capable of delivering consistent quality results. And they are far less prone to making costly mistakes in comparison to less experienced in-house employees.
For example, Information Technology (IT) services range from infrastructure to management to support. Instead of overseeing the IT process within your business yourself, you could outsource the entire process to an experienced IT services provider. Outsourcing IT processes can boost business productivity and efficiency by giving you access to the latest software, hardware, and processes without worrying about upgrades, maintenance, or training staff.
For another example, instead of hiring full-time Human Resources (HR) staff and building an entire HR team, you might consider outsourcing your HR-related processes to an experienced HR business partner serving businesses in your industry. Outsourcing HR processes increases productivity by speeding up essential HR processes, such as payroll or recruiting.
The key to successful outsourcing is to take inventory of all essential and non-essential business tasks. Businesses must feel confident in what can or cannot be outsourced to remain in control of the anticipated outcomes.
Attract the Best AND the Right Talent
Looking to expand your team, but don't have the time or resources?
Consider outsourcing the task to a recruitment partner that offers Recruitment Process Outsourcing (RPO). RPO is a subsection of business process outsourcing where an organization transfers part or all of its recruitment processes to a third-party service provider.
An RPO partner can help you with meeting hiring deadlines without sacrificing productivity. And most RPO partners are flexible to work with on allowing for ramp up or pare down on an as-needed basis.
Benefits of Recruitment Process Outsourcing
Technology. RPO providers use modern technology such as applicant tracking systems and AI-based recruitment platforms to find and process appropriate candidates. This results in higher-quality hires and minimizes turnover.
Cost-effectiveness. The efficiency brought about by modern RPO recruitment technologies results in faster hiring. This translates to savings in both time and money for the business.
Scalability. RPOs are capable of responsive scaling or contracting depending on the needs of the business. So the result for businesses is swift recruitment of new employees enabling them to scale without productivity taking a hit.
Customizability. The large number of tools available at the disposal of RPOs allows them to meet specific client needs. Customizing the hiring process allows businesses to effectively find candidates with specific skill sets, even within tight timeframes.
Provide 24/7 Support to Your Customers
Today's customers are 24/7 ready, they are browsing online and making buying decisions at all times of the day, all while expecting instant resolutions to their queries.
Providing customers with around-the-clock customer service results in massive growth opportunities to your customer base, boosts sales, and increases satisfaction rates.
Offering 24/7 support usually requires financial investment upfront before you experience the benefits of having your support team available at all hours of the day and night.
This is where business process outsourcing can step in making it easier for you to respond to the evolving market needs. Most Customer Support Operation (CSO) teams use their own advanced call center technology, which enables their agents to execute on a company’s existing processes with higher efficiency to maximize Return on Investment (ROI).
Outsourcing your CSO also mitigates against fluctuations in your workforce. These labor shortages could be caused by weekends, holidays, or personal reasons. BPO support eliminates this problem as they’ll ensure proper staffing requirements are met for any job. Time zone differences also present challenges for global customers, but with 24/7 customer support, companies are able to facilitate engagements and expand their reach outside their immediate region.
An outsourced 24/7 customer support operations team also reduces queue times while increasing the amount of resolved tickets. This is because an outsourced team will be able to handle customers at any hour of the day. This prevents large amounts of customers from squeezing their concerns into a limited time window. With a CSO call center, customers are ensured to receive high-quality support without having to take time and resources away from other core business functions, such as product development and marketing.
Helps You Focus on Core Business Processes
Fortune 500 companies lose an estimated $480 billion due to inefficiencies in back-office processes. But with the rapid rise in popularity of utilizing BPOs means businesses no longer have to spend time and money developing these non-core business processes.
For a fraction of the cost, companies can now partner up with BPO providers to acquire their expert-level services.
The resources freed up by handing over business processes to BPOs allow a company to instead focus on its core functions—directly channeling resources into revenue-generating activities, such as marketing, customer care, and product optimization. It also facilitates growth, enabling faster time-to-market.
Commonly Outsourced Business Processes
Data Entry. This tedious process involves copy-pasting data from a source to a target system. While it’s a straightforward task, data entry can also be very time-consuming and meticulous. Outsourcing this process to a BPO partner increases the delivery speed and increases accuracy while saving on labor costs.
Human Resources. Outsourcing HR processes to BPO experts can create a strengthened workforce that is both skilled and satisfied. This increases productivity while reducing turnover.
Payroll. Human error is a constant headache faced by companies with in-house payroll processes. One of the advantages of business process outsourcing here is minimizing mistakes during training periods. Instead, experts handle payroll with minimal errors while also helping businesses avoid payroll tax.
Marketing. Marketing is a difficult and complicated field that is challenging to handle in-house. Many businesses outsource these processes to BPOs who expertly strategize and execute marketing plans across all channels.
Start-Ups Can Scale Up Faster
Outsourcing is more accessible and affordable than ever. Business Process Outsourcing is no longer a tool reserved exclusively for multinational companies with massive budgets.
Technology has made it possible and affordable for even small start-ups to work with a BPO provider. Access to experts and tools such as cloud computing, process automation, and supply chain management that would otherwise have been out of their reach is no longer the case. In fact, a 2018 survey showed that 37% of small businesses have outsourced at least one non-core business process, with a further 52% indicating they would outsource a process within the next year.
Business process outsourcing allows start-ups to focus on growth.
Working with a BPO minimizes risk while maximizing benefit. As BPOs enable significant operational savings, budgets can instead be directed to other important operational areas. You save on labor costs as outsourced teams reduce in-house turnover, which is often particularly high in start-ups. As these outsourced teams don’t need to be trained, start-ups can hit the ground running with their outsourced experts.
A Modern Approach To Outsourcing
Outsourcing is no longer solely seen as a cost-cutting measure, but rather an important and strategic tool for businesses looking to drive growth in a hyper-competitive environment.
BPO empowers you to maintain globally competitive and consistent operations by reducing costs, allowing access to affordable industry experts, raising productivity, as well as helping to source talent for key positions, and helping start-ups scale faster.
Outsourcing certain business processes by running them through a business process outsourcing company like Helpware, you minimize risk by utilizing experts in their respective fields who can provide high-quality services at significant cost savings to your organization. Outsourcing doesn’t have to be an all-or-nothing approach, which is why Helpware offers strategic consulting services and support for your company through every step in the process. In addition, the Helpware team can assist with your recruitment and training needs to save you time and money.
Helpware is committed to changing perceptions of what outsourcing is and what it can be. We build amazing cultures in each of our locations across the globe.
Experience faster business growth today! Get in touch with Helpware, and let us show you all the advantages of business process outsourcing.