The Ultimate Guide to Business Process Outsourcing (BPO) Services – All You Need to Know

Business Process Outsourcing or BPO is a common business practice used by many major players in every market. But what exactly is business process outsourcing? How does it work? How can it benefit you? All of these questions are of equal importance for your business.

In this guide, we’ll go over the various types of BPOs and their associated features. We’ll also mention how you can select the right BPO for your business.

Let’s jump right into it.

Detailed Explanation of Business Process Outsourcing
Business process outsourcing is commonly known as BPO. It is the process of outsourcing your secondary tasks to a different company. The reason why many businesses opt for a BPO is to maintain a sharp focus on the primary business tasks.

Removing the non-essential tasks from the operations loop enables a business to target its main goals effectively. This also promotes the overall efficiency of the workforce. One of the most common secondary tasks for BPO services is the management of HR operations.

Is BPO related to business development?

From one point of view, BPO essentially acts as a development service. However, BPO services are acquired by businesses of large scale. Their main operations are already established. These businesses just need a third party to manage these operations.

In some cases, there is a commitment to elevate the existing results. However, the majority of businesses just opt for the maintenance of current results.

Are there any types of BPOs?

BPO services aren’t limited to a single subsection of a business. There are many aspects of a business that BPO service providers can handle with exceptional results. Let’s check out what these types are in extensive detail:

Front End BPO
The first type of BPO is associated with the customer-related operations of a business. You can hire a BPO service provider to handle customer service, sales, and more. As long as it is associated with your customers, it’ll be categorized under front-end BPO.

Businesses hand over their customers to third parties to save their precious time. Customer service alone can consume hours upon hours. You have to employ an extra workforce just to dedicate a department to customer assistance.

How does BPO help the sales end of a business?

Let’s suppose your business sells IT hardware. Hiring an experienced sales team can significantly increase your costs in terms of payables, onboarding, interviews, and whatnot.

A third-party BPO will already have a sales team with a relative skillset. They can get on with the sales operations from day one.
Back End BPO
The next type of BPO is related to the internal matters of a business. The list includes management, administration, HR operations, accounting, and more. For a large-scale business, employee management is an extremely tedious task.

Handing over this responsibility to a third party eliminates the stress on your end. Furthermore, it adds a layer of credibility to your business.

For example, you acquire a BPO service to handle the salaries of your employees. Without the presence of a bias, there are zero chances of discrepancies in employee payouts.

On top of that, all the data is maintained by the third party for any bi-annual or annual audits.
Offshore BPO
One of the most common types of BPO is offshore BPO. Many first-world countries outsource their internal and external operations to countries across the world. Businesses prefer offshore BPOs because they offer cost-effective solutions.

Hiring a customer service team in a first-world country can cost millions of dollars. However, such services are cheaper in other parts of the world. Companies use this practice to reduce their costs and elevate revenues.

What sort of operations are handled by offshore BPOs?

In most cases, customer service, accounting, auditing, and project management are given to offshore BPO services. This is mainly because they have the necessary workforce required for such intensive tasks.
Onshore BPO
As offshore BPOs work outside a country’s territory, onshore BPOs operate inside the same country. Onshore BPOs offer feasible options with tangible solutions. In most cases, onshore BPOs can send teams for training and operation management.

Onshore BPOs act as an intermediary body between the company’s executive management and employees. They make sure that every aspect of the business is carried out in order.

Now, let’s check out some advantages and disadvantages of hiring a BPO service.

Advantages of Hiring a BPO Service

Efficiency. The biggest advantage you can benefit from is the efficiency aspect of a BPO. Dividing your tasks can help you manage your time diligently. In the long run, you can see the results of such efficiency in the tangible revenues.

Cost Management. Hiring a third party to handle your operations can reduce your costs. The overall cost of hiring a BPO service might be way less than the salaries of acquiring employees.

Business Scaling. If you want to expand your business down the line, a BPO can handle all the non-essential operations. This makes it convenient for you to focus on the main operations of your business.
Disadvantages of Hiring a BPO Service

Quality Management. Every BPO operates with a unique protocol. These protocols might not align with your business approach. Hiring multiple BPOs can add further complexity to this problem.

Data Breach. Since you have to share all the information of a department with a BPO, there’s a high chance of data breach. It is even harder to locate the breach with a third party in the picture.

Communication Gap. Your business can face communication issues because of the location even if you have an onshore BPO. It is hard to streamline the communication channel with different time zones in play.

How to Select the Right Business Process Outsourcing Service?
While there are many options for BPO services, it can be daunting to select the right one. Here are some factors you can keep in check before finalizing a BPO for your business.

Past Experience
We highly recommend that you check the past experience of a BPO. A proven track record in your field is a must. It indicates that your choice of BPO can handle the tasks diligently and provide the desired results.

Let’s suppose you want a BPO for accounting. Your selection should have experience in providing accounting services to other businesses. This ensures they can handle any hurdle, issues, and difficulties along the way.

BPO Pricing
An important factor in selecting a BPO is the pricing package. Normally, hiring a BPO is significantly cheaper than conducting the respective operations yourself. However, if the pricing exceeds your personal costs, it is best to find another option.

While it may be convenient, the accumulation of commercial BPO cost isn’t worth it from a financial standpoint.

How much does a BPO cost?

The prices vary depending on the extent of service you avail of. Generally, you have to pay per employee salary. These salaries can range from $150 to $650 depending on the complexity of the BPO task.

Infrastructure & Workforce
We suggest that you keep an eye out for the infrastructure of the BPO. This includes the hardware, software, working space, availability, and more. If they check all the boxes, it is an indication of their professionalism and dedication to the craft.

On the other hand, inquire about the workforce. The lack of an appropriate workforce can lead to several issues. We recommend that you not only focus on the quantity but also the quality of the BPO team.

Data Security & Breach Prevention
Lastly, we recommend that you ask a BPO for its data security practices and breach prevention measures. Both are equally important in keeping your sensitive data safe from leaking out.

Without these measures in place, your company’s data is always at risk. Even a minor leak can cause hundreds of thousands of dollars in damages.

Final Thoughts
With this, we come to the end of our guide on business process outsourcing services. Outsourcing your business operations to your third parties can provide you an edge over your competition. With a dedicated team to manage your secondary tasks, you can divert your main team towards the primary tasks. This can help you propel your business on the path to unparalleled success.

We hope this guide proves to be exceptionally beneficial for you. Let us know if you have questions related to BPO services.