All you Need to Know About The Business Process Outsourcing

outsourcing process

All you Need to Know About The Business Process Outsourcing

Over the intense competition, businesses of all sizes are embracing the outsourcing process to save cost, improve productivity and attain sustainable growth. Even fortune 500 companies are leveraging the strategic benefits of outsourcing. It enables an organization to focus on the core businesses while a third-party service provider is working 24/7 to establish new KPI for them.

Over the world, the outsourcing industry is worth $76 billion and is expected to grow at an exponential speed in this decade. Organizations have increased their understanding of the benefits of the outsourcing process and more and more companies are willing to implement this strategically beneficial business practice.

What is Outsourcing?

In simple words, the outsourcing process is a practice to send some business out of the office. It might seem problematic to some, but in reality, the outsourcing concept is way too popular and businesses from all industry verticals are practicing to let outside firms handle their work. There are two ways an organization can outsource its work, onshore and offshore. Offshore is much more popular comparatively, it means sending work to third-party firms which are outside the country. Onshore outsourcing happens when the service provider is from the same country. Offshoring is highly demanded because of the lower service costs and extensive industry expertise.

What are The Benefits of Outsourcing?

Organizations leveraging the benefits of the outsourcing process advocate this business practice by giving the following reasons:

  • Cost reduction: The biggest advantage is the reduction of overhead cost, operating cost and many other costs that an organization would bear if they decide to perform the tasks in-house.
  • Competitive advantage: Outsourcing firms need to be well performing to deliver a two-way competitive advantage. On one hand, the organization rest assured that their delegated tasks are handled by professionals, and on the other hand, the organization itself can focus on improving its core business competencies.
  • Resource utilization: Delegating tasks to a third-party provider would free up the resources in a firm that can be utilized in a better and pronounced way to attain the objective of growth and profitability.
  • Risk reduction: By sending some office tasks out of the house, a firm is also mitigating the risk. By sharing the workload, the partnership will reduce the risk of an organization.
  • Flexibility and scalability: Another benefit of the outsourcing process is better management and control over services that are delegated to industry experts. A company can scale up or cut down the services whenever needed without much hassle at the in-house structure and working process.

  • What is the cost of outsourcing?

    The outsourcing process is a cost effective business solution suitable for both startups and established enterprises. Cost-consciousness is important to derive the calculations that actually fit the bills of an organization. The outsourcing cost can be broken down into the following key areas:

    Paycheck: A firm has three choices when it comes to deciding the cost of outsourcing, i.e. hiring an individual outsourcer who charges an hourly rate, hiring a group of people who work as an extension to your in-house team and hiring a complete team to handle the entire project from start to finish. Full product development teams offer the best cost-saving benefits.
    Hidden fee: Apart from the direct cost, there are some additional charges to bear. Cost of selecting and hiring an outsourcing partner, cost of knowledge transfer, contract making and the cost of managing and monitoring their infrastructure.

    What is business process outsourcing (BPO)?

    BPO refers to a practice where standard business functions are delegated to experts outside the house. The most common BPO functions involve customer experience, front-line service work, human resources, accounting and payroll. Firms these days are also interested in sharing workload for IT-intensive tasks to BPO service providers. BPO reduces business admin and it’s different from a call centre.

  • Faster task completion
  • Accessible expert knowledge
  • Access to the latest technology
  • Minimized risk
  • Streamlined processing 24/7

  • What are the types of services do outsource companies support?

    Even fortune 500 companies are into delegating their task to experts working overseas. There is a wide range of support services offered by third parties for the outsourcing process, for instance:

    Sales support outsourcing: Nowadays, the best practice followed by big brands to generate higher revenues is to invest in the sales support outsourcing process. Ideal for the e-commerce and B2B sector, the outsourcing support is suitable to manage sales-related enquiry.

    Omni-channel outsourcing support: If the customer is the highest priority in a business, omnichannel support is required. The focus will be on enhancing customer engagement by creating multiple touchpoints such as voice, email and web.

    Multi-channel outsourcing support: Third party experts will help a brand to interact with the end users through more than one channel via multichannel outsourcing support. In this type of service, support requests will be answered via phone, Live chat, social media and even knowledge base. With thorough analysis, a firm should pick the right channels to ensure maximum ROI.

    Customer retention services: Outsourcing agencies are also instrumental in helping their partner firms to create a loyal customer base. Retention strategy is based on creating the best customer support to ensure repeat business in future.

    IO interactive: Many businesses prefer to outsource the customer interaction services. The benefit of hiring third party experts is that an organization gets access to expert knowledge which ensures the relationship between them and their clients will be strengthened. These types of services include inbound and outbound calls along with technical support and a help desk.

    BPO: To ensure maximum benefits in a business, companies choose the outsourcing process. From small startups to huge MNCs, everyone is attracted to BPO services, which include information technology enabled services, along with data entry, marketing and customer support. In simple words, any type of business process can be outsourced to a BPO firm to attain the cost saving benefits.

    KPO: It is an abbreviation for knowledge process outsourcing, which is also a type of BPO service. Through KPO, brands enable to bring advanced expertise on board. The high skilled services provided by KPO companies include accounting analysis, legal processes, designing and content.

    RPO: It is a short form of research process outsourcing, which is a subset of KPO services. Through RPO expertise, companies leverage the benefits of cost effective, hassle free and well timed research and data analysis. It can be related to market research and investment research.

    LPO: When a business is involved in high level legal processes they outsource the tasks to LPO, which is an abbreviation of legal process outsourcing. These firms hire paralegals to render research and support related to legal agreements, research and patent.

    Knowledge services: This type of outsourcing process involve the profound management of intellectual capital in a firm. Employees spending too much time and resources on finding the knowledge inhibit their growth, whereas collaborating with knowledge services ensures they get what they want with defined knowledge management.

    Human resource services: Many enterprises are attracted towards outsourcing the HR function. The outsourcing process for HR services involves a wide range of services including just the initial tracking of application to full-fledged management of the HR department in an organization which involves compensation, administration, recruitment, relocation and recognition.

    Back-office outsourcing support: As the name suggests, an outsourcing company will handle all the back-office tasks for their partner firm. There are a large number of cost-saving back-office outsourcing solutions offered by third-party firms, such as data entry, data extraction, document imaging, finance and human resource.

    Customer interaction services: The support service include all types of customer facing operations, such as inbound and outbound calls, lead generation, chat support, invoicing, surveys and telemarketing.

    What are the types of BPO services?

    The popularity of BPO services is grown in manifolds. These days, third parties can handle all types of business operations. Basically, there are two key areas in BPO services, i.e. front office and back office. Front office BPO services are offered to customer-facing businesses, whereas back-office solutions are suitable for all business verticals. The most common type of BPO solutions offered these days are listed below:

    Front office BPO services: The front-line BPO executives are responsible for handling customer interactions. With the niche of marketing and technical support, the most common BPO solutions are customer service, social media marketing, phone support, lead generation, creative services, healthcare services, tech support and more.

    Back office BPO services: Companies also hire BPO firms to delegate internal business operations such as data entry, bookkeeping, accounting, tax filing, payroll, web design, computer programming, legal services, human resource, event management, engineering, research and development, and more.

    What is the future of BPO services?

    The market worth of the BPO industry is higher than ever. The worth estimate on the global level is higher than $50 billion. With the faster evolution in the past few years, it can be said that the future is bright for BPO companies. In a global survey, 59% of business executives agreed that they leverage the expertise and cost benefits of the outsourcing process. The highly specialized expertise makes business running easier, and therefore areas of growth are expected in all subsets of BPO such as KPO, RPO and LPO. These days, digital marketing, banking and healthcare sectors are the key areas where BPO services are booming. Referring to the current trends, the following highlights can sum up what the future holds for BPO services:

    Offshore BPO: The outsourcing industry has become saturated. There are numerous firms offering outsourcing process expertise. Owing to the vast availability, a shift towards offshore solutions would be expected. The major benefit of outsourcing is cost efficiency. To make the most of it, companies are looking forward to accessing talent pools from countries with the lowest minimum wages. To acquire the BPO talents, companies would make a shift towards Romania, Bulgaria and countries outside Europe.

    Technical operations: Considering the promising outlook of the BPO firms, it can be said that there are plenty of opportunities ahead. The BPO operations will not only be limited to call centres and data handling, but in the upcoming years, the automation and AI integration would also lead BPO companies to render more technically advanced operations to their partner firms.

    Pricing structure: The increased growth of the BPO sector will create more jobs which simply means wider availability of talent. Therefore, it can be expected that in the near future, the pricing structure of the BPO industry would be stabilized, and the difference in the pricing structure of small and huge BPO firms would diminish. Companies would be able to get competitive rates and stabilized pricing structure.

    What are the challenges for the outsourcing industry?

    Modern-day outsourcing process is omnichannel, which implies costing barriers. These days the services offered by outsourcing companies are in a diversified range which brings more concerns over cost. Apart from competing in the market for cost structure, outsourcing implies various other concerns like more control, transparency, risk management, and responsiveness to change.

    What are the domestic and international BPO strategies?

    BPO is chosen to maximize profitability. A firm can either choose a domestic service provider or an overseas BPO company. The major strategy would be to enhance business efficiency. Apart from these, when hiring a domestic BPO, businesses can strategize product selling as onshore experts possess greater knowledge of the market, culture, tradition and buying behaviour. At the same time, cost reduction should be the strategy for contracting with an international BPO. A firm gets access to expert knowledge at a lower wage where hiring offshore team members.


    By leveraging the benefits of the outsourcing process, all sizes of businesses can make the perfect move to attain the objectives of profitability and sustainable growth. Be it the front line or back-office operations. Outsourcing support ensures that businesses are making most of the money invested. If interested and want to know more about the benefits and strategies of BPO services, visit the link below.



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