Business and Entrepreneurship

Business Process Outsourcing​ Explained with Examples and Benefits

Business Process Outsourcing​ Explained with Examples and Benefits

In the rapidly growing business world, who would not want to grow their businesses? For this purpose, a company may require efficient working and rapid services. This is where business process outsourcing steps in. However, this term remains alienating for many people. If you are wondering what it means, here is everything you need to know, along with the benefits of business process outsourcing​. Let’s have a look at the blog! 

Understanding Business Process Outsourcing​

Business process outsourcing, or BPOs, are third parties that act as service providers to companies. It is a practice in which the company transfers either all the business functions or some of them to these service providers.

In simple terms, if companies lack sufficient resources to perform business processes within their sector, they often hire a third party. These third parties are the BPOs that are responsible for carrying out the company’s larger functions, mostly accounting, marketing, customer services, etc. 

How Business Process Outsourcing Works? 

The BPOs perform certain business functions handed over to them by companies. But what are those functions? For instance, a company is finding it difficult to handle the workload and finds the need to hire other resources, but instead opts for BPOs. The company determines the business processes that can be outsourced and are non-core functions and not majorly dependent on the company’s core activities. After this, a contractual agreement is made between the company and the BPO. Furthermore, the company keeps tracking the BPO’s performance to ensure the quality and efficiency of work.

What are the Types of BPOs? 

The following are the types of BPOs:

Onshore Outsourcing: The process of outsourcing the business functions in the same country. Onshore outsourcing has no risk of language barriers or cultural differences, which helps in easier coordination. 

Nearshore Outsourcing: Outsourcing the business activities to nearby countries is nearshore outsourcing. This helps in sharing a similar timezone, leading to better coordination and communication. 

Offshore Outsourcing: The process of outsourcing business functions to distant or faraway countries is known as offshore outsourcing. But it comes with some disadvantages, such as language and cultural differences, which further lead to a communication barrier. However, offshore outsourcing is often opted for due to the lower costs.

What are the Services Provided by BPOs?

The following are examples of business services that can be outsourced:

Customer Service

Customer service, as the name suggests, is the business process that includes answering the customer queries and complaints via calls or messages. Many companies hand over the customer support services to the BPOs as they need to offer these services 24/7; therefore, instead of hiring other resources, they opt for BPOs.

Sales

Another important business process is sales, which includes performing sales-related activities to boost business growth. Companies might find it hard to hire the whole sales team and polish their skills according to the requirements, and instead get this part outsourced through a BPO center. 

Data Entry

The data entry business process includes managing all the data of the company. It mostly requires copying the data and pasting it into the desired target. This business process is also outsourced through business process outsourcing to improve the delivery speed and maintain work effectiveness. 

Besides these, marketing, IT support, and human resources services are also some of the commonly outsourced processes. 

Benefits of Business Process Outsourcing

business-process-outsourcing

The following are the benefits of business process outsourcing: 

Cost Effectiveness

One of the main reasons the company outsources the business processes is the aim of cost savings. Instead of hiring a team within the company for specific tasks, demanding their training, extra expenses, providing salaries, and whatnot, the company decides to outsource. BPOs, on the other hand, might cost you less, but it also depends on the locations, labor rate, and expertise. 

No Compromise on the Core Business Processes

The company always outsources the non-core business processes, which ensures there is no compromise on the core processes.  The company can handle important company matters while other matters, such as sales, data entry, etc, are outsourced. 

Using Advanced Technology

Many BPO centers have the advanced technologies and software that ensure smooth operations. However, this not only benefits in the easier performance of the tasks but is also important for the technology-driven marketplace. 

Experts Performing Tasks

The BPOs hire experts and experienced candidates who are responsible for carrying out processes efficiently. This way, the company does not have to find an expert candidate but can have easy access to them via BPO centers. Furthermore, the most important thing is that you do not have to train them.

Rapid and Advanced Services

Through business process outsourcing, you can get rapid and advanced services. For instance, if you are getting customer support services, you don’t have to worry about their efficiency. Most of the BPOs offer call center services even at night to meet the customer requirements. 

Conclusion

To sum up, getting business process outsourcing involves a third party in your business to get services from them, such as customer services, data entry, etc. It can be of three types: offshore, nearshore, and onshore outsourcing. This is a suitable option for large companies, such as a clothing company, a banking company,  or a food business, etc. Furthermore, the benefits of business process outsourcing include cost effectiveness, getting advanced technological business processes, expert BPO members, and getting rapid services. 

FAQs

What is business process outsourcing?

When a company hires a third party to handle specific business processes is known as business process outsourcing. 

Are BPO and call centers the same?

No! BPO offers many outsourced business services, whereas the call center focuses on providing customer communications. 

What are the benefits of business process outsourcing?

Cost effectiveness, rapid services, and the use of advanced technologies are some of the benefits of business process outsourcing.

Ramsha Zafar

Editor | OLX

Ramsha Zafar is an English literature graduate working as a content writer for over two years. At OLX, her writing covers almost every topic that people find interesting, including automobiles, smartphones, businesses, and many others. She is strongly passionate about researching, reading books, and writing. When she’s not writing, you can find Ramsha in her kitchen, baking and exploring new recipes. Moreover, she’s always excited about the latest trends in fashion, home decor ideas, sustainable energy solutions, and much more.

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