Business process outsourcing (BPO) is a growing concept. It first began in the manufacturing industry, and now all kinds of businesses choose to outsource various functions and tasks. As technology advances and businesses become more competitive, outsourcing mundane tasks allows leaders to channel resources to core functions.
Your company can capitalize on business process outsourcing to gain the flexibility needed to scale, improve productivity, and access new technologies — impacting your bottom line. Let’s look at what BPO means, the best processes to outsource, and why you should use these services.
What Is Business Outsourcing?
Business process outsourcing is the practice of using a third-party service provider to perform an essential business function or task.
Businesses often outsource functions or tasks that are non-essential to the core value proposition of the company. Even if the job is essential for the overall business, it can be carried out more effectively and efficiently by an external provider, letting the company focus on value-adding tasks. A company with solid business process management understands which functions to keep in-house and which to outsource. Businesses often outsource payroll, IT support, telemarketing, and customer support.
Companies choose to outsource for several reasons. A small business may need more personnel or resources to complete an operation. In contrast, established corporations typically outsource tasks to increase efficiency and reduce costs.
The process of outsourcing generally begins with leaders identifying an area that makes sense to outsource and will put the company in a better position. Choosing the right service provider is crucial. Choose a service provider with a good reputation in the function or task. Your company can choose to work with multiple vendors or one. For example, you can outsource your entire marketing function to one provider or split your social media marketing and print advertising between vendors.
How Is Business Process Automation Different From Business Process Outsourcing?
Business process outsourcing and business process automation are different. Business process automation, also known as robotic process automation, is when businesses use software and hardware to take repetitive, basic tasks and automate them. Process automation uses technology to complete tasks as a human would — saving businesses time, eliminating errors, and enabling employees to focus on more meaningful work. In contrast, business process outsourcing moves the function or task from the business to a third party.
Implementing business process automation and business process outsourcing can help companies run more efficiently and focus on the functions at the heart of their business.
What Are the Reasons for Business Process Outsourcing?
Companies look to BPOs to complete tasks for many reasons. Businesses often choose this option to save money, increase flexibility, improve productivity and competitive advantage, and gain access to new technologies. Let’s look at these reasons and how they can help your business.
- Reduce costs: Reducing operation costs is one of the main reasons businesses outsource operations. Many BPO companies are in countries that have lower taxes and more affordable labor costs. Hiring a BPO company can also reduce costs for employee wages, training, technology, rentals, and other overheads.
- Achieve flexibility: When you outsource non-core functions like payroll, you can focus on the core aspects needed to grow your business. Innovation and scaling your business become more accessible when you can concentrate on the elements that lead to growth.
- Improve productivity and efficiency: Hiring a BPO company specializing in a specific function ensures proficiency. Sometimes businesses need more expertise or time to complete a process, whereas a BPO vendor can complete the task more accurately and efficiently.
- Gain a competitive advantage: A BPO company can help your business gain a competitive advantage. When you can focus on strengthening your core business functions, you can get ahead of your competitors.
- Access innovative technologies: Many BPO companies specialize in a specific function or task and invest in the best technology to complete it. Through outsourcing, your business can access technology out of your budget or capacity.
What Are the Best Services to Outsource?
Companies can choose various services to outsource. What functions you outsource will depend on your business and what best serves your value proposition. Here are some common outsourcing examples:
Front-office outsourcing involves hiring a BPO to complete customer-facing functions. BPOs often have better technology to accomplish these tasks.
One of the best examples of front-office outsourcing is customer care. It’s common for a business to outsource inbound and outbound calls to provide customers with a better and more efficient service. This type of outsourcing helps retain customers and potentially save costs if you use an offshore business process outsourcing vendor. Your business may outsource several front-office functions, including marketing and competitor research, marketing strategy, and sales.
Back-office business process outsourcing is when businesses outsource functions that are not customer-facing. Companies often outsource these tasks to focus on their core business instead of spending time and resources on training and onboarding for non-core functions. An excellent example of this is debt collection. It can be time-consuming to handle accounts receivable. Because of this, accounts departments often leave it to later, leading to more loss.
Outsourcing debt collection can help increase the recovery rate of debts, minimize the labor costs of recovering debt, help you maintain a positive cash flow, and free up valuable time to focus on other business functions.
Marketing, Strategy, Sales, and Research Outsourcing
Marketing outsourcing is an excellent option for companies to gain marketing tools, creativity, and strategy without employing marketing professionals. From the moment you open your business, you need marketing.
A skilled BPO company can help you develop an effective marketing strategy, conduct competitor research and analysis, maintain your website, manage digital marketing efforts, build your brand, engage with customers, and drive sales. Outsourcing your marketing and sales to one BPO company can help to streamline the process. This outsourcing can also include the after-sales customer sales function to support customers after purchasing.
IT and Software Development Outsourcing
IT and software development are commonly outsourced, allowing access to advanced IT support and infrastructure at lower costs. This outsourcing is available for companies of all sizes. Small businesses and large organizations outsource parts of their IT and software development to offshore BPOs. These vendors often have many experts who charge lower rates than BPOs in the U.S.
Affordable power rates in foreign countries also mean operating and maintaining the IT hardware and infrastructure costs less. Outsourcing your IT and software development can include website development and hosting, database development and management, and team planning and mapping strategy.
Outsource Your Accounts Receivable to Altus Receivables Management
Managing your accounts receivable in-house can cost you more labor and time. Outsourcing this business process allows you to channel your resources to other essential areas. At Altus, we offer cost-effective accounts receivable management that allows you to scale this function and recover your debt quickly. Our streamlined services include communications that appear to come directly from your business, helping maintain authentic client relationships.
Take control of your accounts receivable with North America’s largest commercial collections company, and get started with our receivables management today!