by Gabriel Gutiérrez
Business Process Outsourcing (BPO) is to rely on external organizations to complement a company’s services to save time and costs.
It is a decision with many benefits since it allows the company to focus on its core business, making it more efficient and productive.
This article explains the convenience and advantages of adopting BPO in your business.
WHAT IS IT?
Many companies have been using BPO for years, and their reasons vary with the changing times and circumstances.
The first organizations to work under this format opted to outsource cleaning or courier services because it was more convenient for them to let those chores to another company to meet their needs promptly.
It is a simple example, but it is just what BPO is: using an external company to perform a service without the organization needing to hire more human capital and invest extra resources.
Outsourcing has been an effective alternative for companies, and the tasks they delegate have become increasingly specialized and essential to their growth and profitability.
There are at least three reasons behind the decision to outsource to BPO companies such as Kreativa:
- Cost savings
- Investment for growth
- Increased efficiency
And you’ll know you’ve done the right thing when your company gets immediate benefits such as accelerated growth and increased customer satisfaction.
Types of BPO
A company’s “business process outsourcing” can occur in three ways:
- In-house BPO. When the companies have the freedom to hire a specialized service in Accounting, Human Resources, Billing, and Information Technology (IT), among others. The goal is to have agile management within the organization that ultimately translates into higher productivity.
- External BPO. Customer service and sales are the most common examples of this type of service. It is, for example, to outsource services that improve the relationship with external audiences such as customers or suppliers to make sales and marketing departments more efficient.
- Co-sourcing. It is the agreement signed by the company and the specialized service, and it must contain clauses specifying the shared risks and the commitment to add value to both parties, depending on the activity of the contracting company.
BPO by location
As its name suggests, outsourcing is an activity that is carried out externally, even in other countries, either for economic reasons or tax issues. At least, it is possible to identify three types of BPO by location:
– Onshore outsourcing. In this case, an organization hires a specialized service that works within the same country. It is also called domestic outsourcing.
– Nearshore outsourcing. This type of outsourcing occurs when the company hires a supplier in a neighboring country.
– Offshore outsourcing. It is when a company delegate chores or functions to a specialized service in a remote country. It is also known as offshoring.
WHY USE BPO?
Before a company decides to use the BPO model, it must consider several key aspects, such as identifying who inside the organization will be responsible for monitoring the specialized service, specifying the timeline for the outsourcing, and establishing the objectives to achieve.
There are five steps to follow before outsourcing:
1. Assess needs. For starters, it is essential to know how the whole company processes work to identify the unmet objectives. It is necessary to establish the KPIs in advance to evaluate the contribution of the specialized service.
2. Type of outsourcing. Analyze the type of specialized service required and which best suits the company’s objectives.
3. Prior agreement. It should include the parameters and conditions required before contracting the specialized service.
4. Selection of the specialized service. Once it is clear which services to outsource, the next step is to choose the supplier, which must meet the company’s criteria, considering capacity, experience and costs.
5. Follow-up. Once signed the contract, the company must control and follow up on the previous agreements to ensure that the supplier complies with them.
SELECTION OF THE BPO
There are many reasons why a company chooses to apply the BPO model. However, the simplest one is to stop worrying and leave a specialization in charge of another organization that will allow it to save money, obtain better results and increase productivity.
Other factors lead to exploring outsourcing, such as the asphyxiating contractual commitments of companies, as well as the lack of results of a specific department that leads to the subsequent loss of clients.
The most feasible considerations when resorting to BPO are:
- Cost reduction. This model saves on everything from office rent, equipment maintenance, and software licenses to transportation, personnel training, and even overtime.
- Time savings. Outsourcing prevents organizations from spending valuable time searching for profiles for a specific post or new function. Thus, the company functions more smoothly.
- Higher quality. The supplier must be committed to providing a quality service that improves the company’s performance, leading it to streamline processes and win markets.
- Set new goals. By becoming more agile in their procedures, companies can set new strategic goals for their growth and productivity.
It makes sense for your company to invest in specialized external services. Outsourcing saves time and costs and increases efficiency.
For BPO to be successful, it is essential to base the selection of the outsourcing service on analysis and previous studies inside the company and on the provider’s commitment to guarantee that the investment and its involvement represent quick and quality benefits.
REFERENCE LINKS:
https://www.avansis.es/outsourcing/que-es-bpo/
https://corporatefinanceinstitute.com/resources/knowledge/strategy/business-process-outsourcing-bpo/