Have you read the recent article in the Economic Times about Nasscom? It is about the insight from Nasscom that BPM service can achieve the target of $100 Billion in revenue in the next decade. Besides, it has been mentioned that over 60% of the surveyed companies declared high customer satisfaction with the delivery of AI, Cloud, F&A, data and insights from India. Vipul Khanna, CEO of Firstsource and Chair of BPM Council, Nasscom, also added that some of the models include highly experienced industry-specific BPO solutions.
Let’s have a complete look at what BPO services are and everything they offer with their impeccable impact on modern businesses.
Introduction to Business Process Outsourcing
BPO is short for Business Process Outsourcing. It is defined as a practice used by companies to contract certain non-essential operational tasks to a third-party BPO company. The main reason for this is to enable the workforce to focus on the major competencies and value proposition. It shifts the responsibility of managing outsourced tasks to the experts. Some common tasks that enterprises outsource range from customer service and human resources to various accounting and IT services.
Types of Business Process Outsourcing
Front-Office BPO
The first type of BPO service on the list is front-office BPO. It comprises the outsourcing of customer-related operations like technical assistance, customer support, sales, and more. In general, companies contract with call centers for this BPO service. The main goal of front-office BPO services is to improve consumer interaction and satisfaction.
Back-Office BPO
The back-office BPO services include the tasks that are part of the core business functions. This type includes services like administration, payroll and accounting, human resources management, IT support, and others. So, the firms can save their time and resources by outsourcing the tasks and focusing on their business development.
Onshore BPO
Onshore BPO is also called domestic BPO. It means that the company is outsourcing their business operating to a vendor that resides in the same country. This BPO can be applied even if the enterprises use the help of agencies in different city, state, or union territories. A few factors that can influence the onshore BPO are cost differences, expert skills, collaboration feasibility, training, and more.
Offshore BPO
Offshore BPO means that the third-party business service providers will be from a foreign country. A significant example is how a US-based enterprise can hire an Indian company to manage its payroll effectively. Besides, the main reason behind opting for offshore BPO is to resume the expenses with lower labour costs in different countries.
Nearshore BPO
The nearshore BPO is somehow similar to offshore outsourcing. It also uses third-party vendors from neighbouring countries to outsource the services. For example, when an Indian enterprise outsources its tech support from a neighbour country like Bangladesh, it will be considered as a nearshore BPO. It means working with companies that are located in geographically nearby countries.
Advantages and Disadvantages of Business Process Outsourcing
Business Process Outsourcing Advantages
Cost Reduction: Lower costs is an advantage of outsourcing a business process. It is possible as companies do not need to buy the tools or hire extra employees for different tasks.
Better Efficiency: BPO service providers have qualified staff in different fields who perform the best work at the highest level. They also use the latest technologies, which automatically leads to higher efficiency and productivity.
Scalability: When a company wants to expand, it becomes crucial for them to hand over some non-essential responsibilities to a reliable service provider. A BPO enables the firms to attain the expansion easily.
Business Process Outsourcing Disadvantages
Communication Challenges: It can be a challenging part to maintain a seamless communication. It is because the third-party BPO service providers are located in different regions. So, think about it while searching for a BPO for your business.
Quality Control: There might be a chance of quality control issues as the BPO partners operate on different standards. It can lead to variation in the quality of the outcomes that you receive.
Data Security: Another possible downside of outsourcing a business process is security issues. There can be the chance of a safety breach of sensitive data while you work with a BPO company.
Over-reliance on BPO: One disadvantage that many companies experience after outsourcing their services is being over dependent on the provider. It can even lead to paying them higher than usual costs.
How Does AI Affect Business Process Outsourcing?
AI: Automates Repetitive Tasks in Outsourcing
Artificial Intelligence in outsourcing enables the companies to easily automate their repetitive tasks. There are several tasks that have the same rule to perform every time; AI makes them automatic and saves time, money, and effort.
AI: Improves Data Analytics in Outsourcing
Data analysis is an essential task for any enterprise to inspect the regular patterns and examine the positives and negatives in the business. With the help of AI, data analysis becomes seamless in outsourcing.
AI: Upgrade Quality & Accuracy in Outsourcing
Artificial Intelligence has various technologies and algorithms like Machine Learning that helps in maintaining the accuracy of the operations. As a result, there is a scope of attaining the best quality in outsourcing.
AI: Better Customer Experiences in Outsourcing
One of the significant areas where AI is making an impeccable impression in outsourcing is customer service. With the exceptional support all the clients get the better customer experience that helps in better relationships among the firm and client.
Latest trends in Business Process Outsourcing
Startups & Small Businesses Using BPO
Nowadays, startups and small-scale businesses are also using BPO. Historically, only large companies and top brands were involved in using BPO. However, with time, businesses of all sizes are understanding these facilities and opting for outsourcing their less important tasks. It helps in focusing on core operations for better business development.
Progressive Web App Utilisation
The BPO service providing companies are using the progressive PWA (Progressive Web Apps) in their business operations. It helps the businesses to make their business processes and functions convenient for the consumers. This transition is becoming trending and many BPO are using these apps.
Use of Omnichannel Solution
Another trend that is making a great success in a better customer experience is the use of omnichannel solutions. It provides consumers and prospects both the access to products and services of the company. For instance the operations are effectively being managed on different platforms like digital.
Strategic Business Partnerships
In the BPO industry, the companies are expecting strategic business partnerships. With the demand for outsourcing services, the BPO industry is planning for long-term associations that can impact the success of both parties.
What Is a BPO Call Center?
A BPO call center is a team of professional agents who collaborate with different companies and have the intention to outsource their customer service operations. Usually, many BPO call centers present multiple companies at the same time. They ensure that all the people who get in touch with them receive the notion that they are interacting directly with the representative of an enterprise. Besides, the agents of BPO call center services are extremely professional in providing customer support and contain significant information related to their client organization. They have the complete details of their products and services to answer any potential inquiry.
Examples of Business Process Outsourcing
Payroll
BPO can be used for payroll. It is a function that involves the calculation and distribution of wages and taxes to workers and government agencies. It begins with an employee list and their role as a contractor or employee. The calculation of the wages depends on employees’ status, paid time off, tax withholdings, and more. All the records need to be kept properly. The whole process takes a lot of time, and hence, it requires professionals who can do it effortlessly for a company.
Customer Service
Call centers take responsibility for the firms to guarantee that their customers will have the best customer experience. It involves answering clients’ queries and assisting them in resolving problems related to the company’s products and services. The call center workforce must have complete knowledge with effective communication skills to handle all the questions seamlessly. Besides, the availability of customer support 24/7 is possible with BPO.
Supply Chain Management
Another significant example of the business process outsourcing is supply chain management. Some examples involved in supply chain management are raw material sourcing, keeping record of every supply, distribution of supply, and more. The process is complex, and its management involves tasks like legal counsel, payment processing, quality control, accounting, and others. A BPO provider can manage all with less risk.
FAQs on Business Process Outsourcing
Is outsourcing difficult to manage?
Not completely. However, outsourcing does create the challenge of not having complete project control due to the management of outsourced responsibilities by external companies.
What is the commonly used method of outsourcing?
BPO is the most common method of outsourcing. Various companies use it to contract their business processes to third-party agencies.
How is BPO different from BPM?
BPO is the outsourcing of your business tasks to an external service provider. However, BPM is about managing the overall business of an enterprise from the beginning.
When should I outsource a service?
Any company that is experiencing a situation with limited resources can outsource their business tasks to BPO service providers.
