If you’re staying up-to-date with the business market, even just tangentially, you may have heard the phrase BPO. BPO is becoming an important key to a company’s growth, with current estimates gauging the industry at $24.6 billion as of 2017.
However, if you and your enterprise are just getting started, you may not be familiar with the meaning of BPO and what it can bring to your objectives. That’s why ROI Call Center Solutions is here with a guide on what BPO is and what it can do for you and your business.
Business Process Outsourcing
BPO is an acronym that stands for business process outsourcing. It is essentially a form of corporate outsourcing in which the company procures a third party to manage certain areas of the business in place of the company’s direct oversight.
Elements of a business that can be outsourced through BPO are highly diverse, ranging from call centers, IT, financial services, and more. Overall, BPO areas can be identified by being lesser and supplementary parts of the company, with the main and most important aspects of the business handled directly.
Main Classification Areas
By considering the specific locations for outsourcing targets, we can further break down BPO into some key categories:
- Onshore: outsourcing services to a group within the same nation the original company resides in.
- Offshore: outsourcing to targets in foreign countries.
- Nearshore: outsourcing to countries that border the original business’s home country.
Please keep in mind that each of these vendor types has its own potential benefits (cost-savings, efficiency, expertise) as well as areas for careful consideration (cultural and language barriers, differences in time zones). The category that is best for you depends on the specific needs of your company, and can even be a combination of one or more of these classifications.
Given the diversity of the global business market, it should come as no surprise that, along with the previously mentioned subdivisions, BPO has additional categories to account for the individualized specializations that external service providers have developed. There are many different kinds of specialized BPOs, but here are just a few of the key specializations you might encounter:
- Information Technology-Enabled Services (ITES): These BPOs focus on information technology (IT), handling various forms of data and web content.
- Knowledge Process Outsourcing (KPO): Based on the concept of business solutions, KPOs are notable for covering areas that involve advanced analytical skills and business expertise such as market research and analysis. KPOs can be further specialized into subgroups.
- Legal Process Outsourcing (LPO): A type of KPO, LPOs specialize in legal work, both low and high-level.
- Research Process Outsourcing (RPO): Another type of KPO, RPOs center on analysis and research objectives.
Why BPOs are Useful
Even though you now know what BPO is, you may still be curious as to why it’s so important these days. Business process outsourcing, if applied strategically, can prove highly beneficial to your company. For starters, outsourcing cuts down on the general costs and staffing needs you would traditionally require when expanding your business, making it an excellent way to streamline your company’s growth.
Moreover, by reducing your need to work on non-essential aspects of the business that are handled by third parties, you can focus your efforts on the core areas of the company where your attention is most important. In addition, outsourcing through BPOs offers businesses a wonderful opportunity to build stronger links with customers and thereby receive greater customer feedback.
Potential BPO Risks
That being said, BPOs are not always the best choice for a business. If mismanaged, BPOs can run up unexpected expenses that outweigh their cost reductions. The quality of the outsourced work and communications between it and the home company can also lag due to time differences. Most of all, excessive BPOs can make the company overly dependent on the third parties sustaining the outsourced areas.
To ensure that you reap the benefits of BPO without its risks, you should make sure that you have a solid plan for your company’s growth, comprehensive knowledge of possible vendors, and careful considerations on how the outsourcing will affect your business prior to making any outsourcing arrangements.
Professional Business Knowledge and Solutions
When you need advice on business solutions and ways to optimize your company’s growth, ROI Solutions has the information you’re seeking. Contact us today to learn more about our services.