A report by Fortune Business Insights remarks that the market size of business process management is rising. It estimates that the market size will grow from $16.48 billion in 2024 to $37.84 billion by the year 2032 at a CAGR of 10.9% during the forecast period.
BPS short for business process services can be used by the businesses for effective business process management. Let’s find out everything you need to know about it.
What Are Business Process Services?
In simple terms, business process services are the services that help to effectively design or manage the workflow of an organisation. Some services that come in the business processing services are:
- Discovery or transformation of the process
- Intelligent process automation
- Business process outsourcing
Various companies today outsource their business process services. The responsibility is given to the professionals who specialise in the required business process services. By doing this, the companies get the flexibility to properly manage their finances and business operations.
Types of Business Process Services
There are various business process services that companies can outsource from expert providers. The following are the top five types of business process services:
Information technology outsourcing
ITO is the type that includes the outsourcing of significant IT functions. Some crucial requirements of the enterprises in this type include IT support, software development, network management, and data centre operations.
Knowledge process outsourcing
These are also the critical types of business process services. The processes that are involved in KPO services are extremely high-valued and knowledge-based. A few examples that are involved in this BPS services are data analysis, research and development, and extensive market research.
Legal process outsourcing
Another type is LPO and is called Legal Process Outsourcing. In this type of service, the organisations choose the professional who can manage their legal functions. Besides, different examples of this type of business process service are document review, legal research, contract management, and more.
Human resource outsourcing
The next business process service type is Human Resource Outsourcing. HRO involves the responsibilities of the human resources and its efficient management for an enterprise. Some of the functions it comprise are payroll processing, recruitment, training, employee benefits, and others.
Finance and accounting outsourcing
FAO is also an essential business process service. It includes the appropriate outsourcing of the financing and accounting functions for an organisation. There are some processes that any business outsources with this service, including financial reporting, accounts payable & receivable, tax preparation, and more.
What Are the Benefits of Business Process Services?
Improved Efficiency: With business processing services, any enterprise can have better operational efficiency in their business.
Scalability: A company can scale their business with outsourcing the services without the need to invest in infrastructure or additional resources.
Expert Support: The business process services provider has a team of experts who work with complete attention to offer the desired results.
Cost Reduction: Another significant benefit is cost reduction without the need to manage the process of hiring, training, and managing.
Focus on Core Business: The business who use business process services can concentrate better on their core functions without need to focus on outsourced tasks.
Challenges of Business Process Services
Communication Issues: The business process service providers mostly work from remote locations, so they may not always be available for communication.
Data Security: When you work with external companies, there can be a risk of revealing confidential information to them.
Time Zone Difference: One of the main concerns is the difference between the time zones. It can be problematic to schedule meetings to connect and discuss the matters.
Hidden Costs: While working with business process service providers, the companies need to sign lengthy contracts with fine prints. There may be some hidden costs.
Lack of Talent: Another challenge that can be possible while using business processing services is the possibility of a lack of a talented workforce.
How does AI Improve Business Process Services?
Automation of Routine Tasks
There are several business process services that are regular and need the same approach to complete. Robotic process automation can be helpful. It uses bots to automate repetitive and rule-based tasks like data entry, invoice processing, and customer queries for better customer experience.
Data Analysis and Insights
One area where artificial intelligence plays a crucial part is in evaluating a large volume of data to identify patterns. It enables businesses to enhance their predictive analysis. It helps the companies with effective decision-making and anticipating future events for better growth.
Enhanced Customer Service
With the advent of various AI-driven chatbots and virtual assistants the business process services can be enhanced to manage the customer inquiries. These can be appropriately integrated into the websites, mobile applications, and social media platforms. It helps companies offer immediate responses to customers for enhanced customer experience. Besides, voice recognition AI technology can also be used to enhance outcomes.
Process Optimisation
Another role of AI in the business processing services is to effectively offer process optimisation. Machine learning being the core part of AI helps here which examines and processes data to identify the inefficiencies and optimise the workflows. It also includes the process mapping and resource allocation for the enhanced outcomes.
Enhance the oversall CSAT by 17% through personalized CX strategy
How Does BPS Differ from BPO?
Various people use BPS and BPO interchangeably. However, they are not similar. Here is the distinction between the two for clear understanding:
BPS: It mainly focuses on outsourcing the overall business processes to third-party service providers.
BPO: In general, it is a subset of BPS services. Business process outsourcing comprises the outsourcing of the non-essential business functions which needs professional technology, skills, and specialisation. For instance, financial and accounting outsourcing, human resource outsourcing, and call center services outsourcing are involved in BPO.
Process of business process services
Step 1: Identify your BPS Needs
The initial step towards getting a business process service is to properly perform the analysis of your requirements. It involves the identification of the areas where efficiency can be enhanced, costs can be reduced, or performance needs to be improved. Some questions that might help you are:
- Which processes are taking more resources?
- Are there any bottlenecks?
- What are the objectives of outsourcing?
Step 2: Choosing an Ideal BPS Provider
The next step is to select the right BPS services provider for your business needs. It includes a selection approach that properly evaluates the potential providers. Several criteria that can help here is to check for:
- Expertise and Experience
- Technology and Infrastructure
- Scalability and Flexibility
- Cost and Value
Further, you can ask for a proposal from the provider with all the detailed information, including service level agreements (SLAs) and more.
Step 3: Contract Negotiation & Agreement
After you evaluate the proposals, you need to check the terms and conditions associated with the selected provider. With the appropriate negotiation and agreement of the contract, you can be sure about how you want to proceed with the BPS provider. Usually, the terms and conditions involve:
- Scope of Services
- SLAs and Performance Metrics
- Pricing Model
- Confidentiality and Security
- Duration and Renewal
Step 4: Transition & Implementation
Then comes the transition phase. It involves the transitioning of the business process from the organisation to the BPS provider. This step needs meticulous attention so that the transition will be seamless with minimal disruptions. It includes various aspects like:
- Creating a transition plan
- Knowledge transfer
- Resource allocation
Further, the implementation involves the BPS services provider to take over the particular processes. Consistent collaboration helps here best to make everything smooth.
Step 5: Ongoing Management & Optimisation
After completing the overall steps, it becomes crucial to monitor the ongoing management. It helps to ensure that the services are effectively matching the standards that were agreed on in the first place. With time, you can go for optimisation where required. Some parts involved here are:
- Performance Monitoring
- Reporting
- Feedback and Communication
Step 6: Evaluation & Renewal
At the end of the contract term, it is essential to examine the results of the BPS initiative. It includes the assessment of the performance of the provider, goal achievements, impact on the business, and more. There are a few questions that you can consider while doing the evaluation, like:
- Did the BPS provider meet or exceed the SLAs and KPIs?
- What cost savings and efficiency were achieved?
- How did the BPS initiative impact your core business processes?
After evaluation, you can make a decision of whether you want to renew the contract or continue with the existing provider.
How Does BPS Assist During Periods of Market Uncertainty?
Business Process Services are great for businesses with a huge amount of functions to manage. During the time of BPS market uncertainty, the BPS can assist in the following ways:
- It helps businesses adapt to changing conditions by scaling operations up and down according to demand.
- The expertise and modern technologies offered ensure continuity and resilience in the operations.
- It also helps maintain stability and competitive advantage even in the middle of market volatility.
Can a Company Outsource Its Core Business Processes?
Yes! The companies can technically outsource their core business processes. However, it is not advisable to do it. It is because the core business processes are fundamental to an organisation’s identity, competitive benefit, and strategic objectives. By outsourcing these crucial functions, a company can risk the control, quality, or issue to customer experience. On the contrary, non-core business processes like administrative tasks, IT support, and customer service can be easily outsourced.
