Business Process Outsourcing (BPO), when done correctly, can help you cut costs all while increasing customer service and giving your company the flexibility it needs to grow. BPO services hand over non-core competency functions (such as lead generation, after-hours call centers, customer care/service, billing and payment support, etc.) to a third party. This allows you to focus your time and energy on the crucial core components of your business.
What Is BPO and How Does It Work?
The acronym BPO stands for business process outsourcing, a niche of outsourcing in which a company hires a third-party to completely take over a certain aspect of their business, such as customer service, marketing, or shipping.
This differs from the general concept of outsourcing, which usually refers to outsourcing a single job rather than a whole department. Most companies choose BPO for supporting roles in their company so that they can have more time to focus on the core aspects of building their business.
How It Works
Now that you know how to define BPO, you may still be wondering how it works. First, a company must shop around for the right BPO partner. During this time they’ll evaluate proposals from several different BPOs and then select the right partner for their needs. Once a contract is negotiated, the BPO will completely take over the designated process. The company can then review reports and monitor the BPO to ensure the quality of the performance.
Types of BPO
There are many types of BPO out there, so businesses can choose the one that best fits their specific needs. The three most popular types include:
- Offshore: In this case, companies outsource work to a faraway country, such as India or China. This is the most affordable option and can save a business a lot of money over time.
- Nearshore: When a company wants their outsourcing closer to home, they might choose a nearshore BPO, which could be in Mexico or South America.
- Onshore: Onshore outsourcing takes place within the country, but is usually in another city or state. For example, a company in San Francisco might use an onshore BPO in Dallas.
Successful transitions to BPO services require planning and continued management, but the rewards are well worth the effort. Use the following four keys to maximizing your success.
Key # 1: Streamline Your Processes
Outsourcing the work will not magically fix a broken or overcomplicated system. Before you can outsource any process, you must have a strong understanding of the desired outcome of the task as well as an easily replicated protocol.
Don’t outsource a process unless you are able to outline precisely how you would like it done. When you hand over a task to a third party, they should have all the tools necessary to give your customers the help and information they’d receive if the process was done internally.
Work with your BPO service to determine what information they need to provide you with the best service possible.
Key # 2: Define Roles and Expectations
Sit down with your BPO company and clearly define who is responsible for each part of the process. Early confusion on roles and expectations will have negative ramifications for the rest of the relationship. Walk through the entire process you’d like outsourced and determine which tasks you’d like to keep internally and which you’d like the outsourcing company to complete.
Make sure you understand what input the BPO vendor needs to perform each task and they understand the outputs or statistics you expect in return.
Key # 3: Set Key Performance Indicators (KPIs)
Before entering into a contract, set key performance indicators (KPIs) so you are able to determine whether outsourcing is making a positive impact on your company. Determine what success will look like to you in quantifiable terms (more sales, leads, resolved customer service calls, etc.). Set goals and benchmarks you’d like to achieve.
Share these KPIs with the BPO service and decide on how you’ll measure each indicator as time goes on. Set up a system so you can regularly check and analyze your progress throughout the year.
Key # 4: Check In Regularly and Adjust
Communication is the key to any successful relationship. This is just as applicable in business relationships as it is in personal ones. Over time, your company will change and grow, which may require changes in your BPO services. You may find you are ready to switch over more processes as you get accustomed to the change. If you notice any of your KPIs are falling below your desired benchmarks, you may need to look at adjustments as well.
It may be good to set up regular meetings from the start in order to discuss questions or concerns on either side.