Business processes outsourcing (BPO) is the outsourcing of internal business processes to an external contractor. It all started in the second half of the last century with industrial and IT outsourcing. And since the late 90s, companies began outsourcing business processes such as accounting, market research, hiring personnel, and others.
What Is Business Processes Outsourcing
Outsourcing of business processes refers to the transfer of certain secondary functions of the enterprise in the hands of BPO services companies.
Such functions usually include:
- financial and accounting activities, accounting;
- personnel management;
- the calculation, accounting, and payroll;
- work-related to internal audit;
- customer service and consultation centers and other processes specific to a particular industry or enterprise.
Speaking of quality, even when hiring a person on staff, it is important to remember that there are no one-size-fits-all specialists. One lawyer cannot be a professional in labor, civil, business, and criminal law at the same time. When you use business outsourcing services, you can be sure that the issue will be dealt with by a specific professional. And if necessary, specialists can always consult with each other.
The outsourcing of business processes has another peculiarity. Often the entrepreneur cannot control the work of his lawyer or financier – he simply does not have the necessary knowledge. But the heads of the outsourcing firm understand all the processes and are responsible for the quality of the work with their reputations. They check how the accountant draws up the tax report, and the lawyer the contract. The same applies to the specialists in the outsourcing company’s compliance with confidentiality conditions. A good BPO services company provides services that will make it very easy for you to do business.
Examples of Business Process Outsourcing Services
There are several classic examples of outsourcing of business processes, typical for large companies:
- Outsourcing of HR-processes – delegation of functions for personnel selection (including outstaffing and leasing of personnel), wage calculation, preparation of tax statements;
- Outsourcing of call-centers, outsourcing of processes in the sphere of relations with clients – processing of telephone calls, etc;
- Outsourcing of accounting processes – delegation of authority for payroll accounting, issue of primary documents to counterparties, execution of bank payments, etc;
- Outsourcing of IT processes – transfer of production functions, program code writing, etc. to an outsourcer. A variety of IT process outsourcing is the outsourcing of IT system deployment, in which the outsourcer provides the customer with equipment to deploy information systems, ensures their installation, upgrades, and support.
The outsourcing company provides 100% confidentiality and bears full legal responsibility for the business outsourcing services provided. Before working with the client, the outsourcing company signs an agreement on non-disclosure of confidential information. Failure to comply with the contract is a loss of the client, reputation, business, and financial losses. And what is the responsibility of a full-time employee? He loses his job and leaves to work for another company
The pandemic predictably spurred demand for Business Process Outsourcing (BPO). Research firm ReportLinker predicts that by 2025 Business Process Outsourcing, BPO will reach $114 billion with an annual growth rate of five to six percent. For many companies, outsourcing individual manufacturing processes or even entire manufacturing facilities is an additional opportunity to increase efficiency and reduce costs. For example, outsourcing in the industry involves hiring entire organizations for the purpose of fully transferring the process, rather than simply bringing additional personnel under one’s management. The outsourcer himself organizes personnel policy, logistics, the purchase of equipment, raw materials or packaging of finished products, and quality control of work. For example, he can work on one of the production sites that require the purchase of missing equipment. The production owner gets rid of the need to install, train personnel, and perform maintenance.
According to Industry Week magazine’s annual survey, the IW Census on Manufacturing, 44.7 percent of U.S. companies actively use third-party specialty companies for shipping. Also, about half of the companies outsource equipment maintenance.
Grand View Research estimates that there was $232.32 billion worth of transactions in the global business process outsourcing market. These numbers are projected to continue growing. Adapting to today’s conditions, the world has focused on reducing operating costs and shifted its attention to core tasks.
10 Signs Your Business Needs BPO Services
Today there is a unique opportunity to digitize processes and rebuild them with modern technology, data, and expertise. Modernizing operations helps businesses become more agile and act smarter. Business process outsourcing that improves operational efficiency can pave the way for continuous innovation that can become a constant source of revenue. This, in turn, will help your organization serve customers better and compete more effectively. If your business can attest to facing some of the problems listed below, it’s time to consider outsourcing. They include:
1. Lack of Customer Support Agents Locally
An incompetent service organization leads to service problems, i.e. it can essentially make your customers your competitors’ customers. Each call to technical support (or just support) is a kind of warning from the user, to which you need to respond clearly, quickly, and competently. It is very important to understand when to outsource technical support.
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2. Remote Recruiting in a Particular Region
In some regions, it is not easy to find a qualified employee for certain tasks. Sometimes, in this case, people decide to hire remote employees on staff. But this solution is not efficient enough. The best option is to outsource this task and be sure that it will be done quickly and efficiently.
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3. Need to Reduce Operating Costs
The transfer of certain segments of the business allows you to reduce staffing and save on salaries. The customer reduces the cost of keeping middle management, staff, accountants, lawyers.
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4. Time-Consuming Tasks That Overwhelm Work Schedules
Outsourcing is performed by those who have a higher level of qualification, expertise, and extensive experience in the right field. This factor automatically increases the quality and speed of work. When part of the functions is outsourced, control over the main operations is improved, allowing a better focus on achieving the goals set.
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5. Need of Social Media Manager
One of the first things many entrepreneurs choose to outsource is social media. Social media can be powerful if used correctly, but it’s often not the best use of your time. When you outsource social media, you can be sure that your channels are updated, your content is constantly promoted, your customers are engaged, and your brand remains active and alive.
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6. You Want to Maintain Effective Communication and Collaboration
Outsourcing business processes gives a much greater choice of work mode at the expense of time zones. There is an option to set a deadline and rest: the work will be done by the time you wake up the next morning. At the same time, it is possible to find a contractor who will do the work on weekends as well. In addition, outsourcing helps to overcome the difficulties that a company may encounter in connection with the departure of a key employee on vacation.
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7. Need for Data Annotation for AI Project
In terms of collecting data for AI training data, the most optimal option is to outsource or ask outside vendors for datasets. They take responsibility for finding datasets for your requirements, and you can focus on building your modules.
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8. The Business Lacks Certain Competencies
When a certain type of work is outsourced, the company or organization does not need to hire qualified specialists to do so. There is also no need to organize training programs for them. The work will be outsourced to people who are already experts in the field. This will also increase the efficiency and quality of the work.
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9. You Are Experiencing High Employee Turnover
Often high turnover is due to insufficient pay for developers. In such a case, it is ideal to outsource before hiring another full-time employee. This way you can bring the company up to a certain level of profitability. It also stands to reason that your new outsourcing team should be fluent in English. This way you can avoid communication errors and misunderstandings.
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10. Outsourcing Makes Strategic Sense
It’s not just a matter of budget or scarcity of resources; the decision to partner with an outsourced team of BPO service providers is sometimes a strategic one. They Frequently have a wealth of experience, a crew of knowledgeable employees, and in-house assets that would take the corporate management team years to develop.
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Digital technology has opened up a whole new layer of possibilities for business executives. Traditional work and business process as a service are being reshaped by intelligent manufacturing processes that make extensive use of automation, artificial intelligence, the Internet of Things, cloud computing, and other cutting-edge technologies. To keep up and thrive, businesses should constantly evolve to adopt smarter, more fully coordinated processes that are equally responsive to the needs of customers, employees, suppliers, and business partners. In general, the effectiveness of business process outsourcing will depend on whether the company correctly assessed its needs. Forbes advises to outsource IT not in all cases. The publication lists several situations when it is justified – for example, you need niche expertise or it is vital for a business to make the product viable in the shortest possible time (reduce time to market).
Today it is obvious that business process outsourcing is not just a trend, it is a real working tool to optimize and improve the efficiency of companies.
Mobilunity as a Trustworthy BPO Services Provider
The main supplier of business process services in the world is India, with Ireland in second place and Asia in third, McKinsey analysts write. In some countries, BPO has become a noticeable item of economic income – for example, before the coronavirus, it accounted for about 8% of GDP in the Philippines. Eastern Europe occupies a very small share of the global BPO market, but it has great growth potential. Mobilunity BPO is a well-known outstaffing Ukraine-based company that has been providing software development and BPO services to various companies for 10+ years. Our main goal is to help companies find the best IT professionals for their projects. Our experts know how to find the right person, whether it’s an experienced BPO customer service person or a highly skilled developer. Our clients note that Mobilunity is a company you can trust. So if you want to implement BPO outsourcing services such as BPO in financial services, Mobilunity specialists can help you find a reliable team with the most relevant experience in the necessary field.