4 Reasons Why Every Business Owner Should Invest in Business Process Outsourcing

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The BPO industry has grown considerably over the years, and so are BPO market trends. Business Process Outsourcing or BPO companies are usually employed as third-party service providers to carry out single or multiple tasks for a client company. Organizations work with them for their back- and front-office operations.

BPO companies are either onshore, nearshore, or offshore. In onshore outsourcing, an organization hires a third-party provider with headquarters within the same country. Nearshore refers to outsourcing to a nearby country, and offshore is hiring a BPO company in a country usually on the other side of the world.

Purpose of BPO
Various organizations work with BPO companies for their front-office and back-office business functions.

Front-office
This covers business functions involving customers as the end-users, such as:
• Customer relations services or after-sales
• Sales
• Marketing
• Grievance redressal
• Supply chain

Back-office
Meanwhile, this covers a company’s internal functions, including:

• Human resources (HR)
• Quality assurance (QA)
• Information technology (IT)
• Payroll or payment processing
• Accounting
• Administrative services

However, the range of services offered by BPO companies has grown over the years. More organizations jumped into the outsourcing bandwagon—no wonder the BPO industry itself also grew a hundredfold and is expected to grow even more in the years to come.

The importance of BPOs for organizational growth

Here are four notable reasons why a lot of organizations these days rely on BPOs and how they helped them run their businesses effectively.

1. Cost reduction
This is perhaps one of the major reasons companies opt for outsourcing. Instead of purchasing expensive equipment, hiring additional employees, and training them for a specific task, businesses have the option to outsource functions to a third-party service provider.

Then again, finding a reliable BPO company is no easy task. Choosing a BPO company can make or break a business, which is why you should do your research before signing a contract with them. For one, a good BPO company should give a higher rate of return. Hiring an outsourcing provider will also help lessen or even eliminate overhead costs.

2. Focus on core business activities
As we all know, small businesses usually do not yet have the budget to hire more employees and purchase equipment. This is why working with a BPO helps small businesses, including start-ups, accomplish their other functions. At the same time, their in-house team can focus more on their core business functions.

Being ahead of the competition is a must, especially in this ever-changing digital landscape. This means businesses should be quick to respond to the consumers’ ever-changing demands and needs. Through BPOs, business owners can respond to those needs faster, better, and more efficiently.

3. Better talent allocation
Organizations that choose to work with BPOs get the utmost service and skills from the cream of the crop, minus the hassle of overhead, HR recruiting, and training costs. It’s up to the organization to find the best BPO company to respond to their business needs.

In case of unsatisfactory performance, the company can work with another service provider instead of finding another employee to fill the job vacancy and start from scratch.

4. Access to modern technologies
BPO companies can offer the latest technological advancements that their clients may not necessarily have yet. After all, BPOs constantly seek innovation and are on the lookout for the latest technological trends that can help them do their jobs more efficiently if they want to have more clients.

Organizations that choose to work with forward-thinking service providers will surely be ahead of the competition.

Potential risks of hiring BPOs
On the downside, BPOs may also carry some risks, including:

• Unexpected expenses or costs
• Security issues and breaches
• Potential disruption due to unforeseen circumstances (e.g., natural disasters, financial matters, workplace difficulties, etc.)
• Communication issues (e.g., cultural barriers, time difference, etc.)

What lies ahead for the BPO industry?

Investing in outsourcing services is a major decision among companies and organizations that can deliver positive results. It helps:

• Improve workplace productivity and quality of service
• Save time and money from recruitment and training of new employees and purchasing equipment
• Small businesses to focus on their core business functions, given their limited budget
• Reduce operational and overhead costs
• Businesses to scale and thrive

Technology continues to evolve, and so are consumers’ needs and how organizations work. This also means companies have to keep up with these ever-changing consumer demands. At the same time, they need to use company resources effectively and efficiently.

Some of the most promising outsourcing trends in the next coming years include:

• Adoption of cloud platforms or infrastructures in work and team management
• Cost-reduction and budget optimization
• Robotic Process Automation as a way to improve efficiency on business operations and deliver quality results to clients

At this point, we can only expect the BPO industry to continue catering to companies’ outsourcing needs and thrive in the years to come.

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