bpo outsourcing

Commonly, companies have developed all their operations internally, whether or not they are related to their main activity. Over time, subcontracts to third parties emerged to carry out secondary activities not directly related to the primary tasks of the contracting companies, such as courier and cleaning services, especially due to the lack of qualified personnel and the lower cost implied.

During the last decades, thanks to remarkable technological advances, the practice of outsourcing has also spread to sectors that have had a more direct relationship with the business, delegating complete business processes, often of an administrative type and with a high technological component, which has allowed many companies to fully focus on their main, core activity.

Business Process Outsourcing

Business Process Outsourcing (BPO) is the outsourcing of a business’s processes or functions to providers offering specialized services. In other words, specific activities that have a direct impact on the business are assigned to external companies, with the idea of reducing costs, improving the quality of services and increasing productivity.

Outsourcing is often used for internal business functions, including administration and accounting services that have a high technological component, such as purchasing processes, invoicing, and implementing and maintaining IT (information technology) resources.

Services related to customers, such as advertising, marketing or technical services, are also prone to outsourcing, always aiming to reduce costs while achieving efficiency and quality.

If the contracted service is carried out within the contracting company’s own facilities it is called in-house BPO, and if it is carried out in the supplier’s facilities it is known as off-site BPO.

In fact, the outsourcing service can be offshored, which means that the corresponding activity is carried out outside the contracting company’s environment, even in cities in other countries, in order to benefit from more favorable fiscal and economic conditions.

Key Benefits of Business Process Outsourcing (BPO)

Obviously, companies resort to outsourcing some of their services because it presents significant advantages. That is, companies analyse the conditions proposed by the providers of certain services and, if the profitability is higher, they do not hesitate to delegate certain activities. Here are the main advantages of BPO:

Better Quality

The contracted company is an expert in a certain service, and also has the necessary infrastructures, resources and technology to offer an optimal result.

The personnel of the supplier company have high technical training which allows them to provide a more effective and higher quality service. Thus, the company implementing BPO, in turn, experiences an increase in the quality of the services and products offered by the contracting company.

Decrease in costs and increase in benefits

Hiring business activities and processes from an external provider can mean significant savings on infrastructure, skilled personnel, technology equipment and software licenses, among other areas. However, within the cost, a significant number of “hidden” costs that exist in companies must be taken into account for non-core departments or personnel. Likewise, there are unknown costs, such as liability for services managed internally vs. outsourcing.

Outsourced companies should have professional liability insurance covering possible incidents in the service. This type of coverage almost never exists when services are performed internally.

Set new goals and expand markets

Outsourcing strategic services not only implies a reduction in spending on infrastructure, personnel, etc., but also significantly increases flexibility and capacity to adapt to frequent changes in the business sector, increasing the speed of business processes and decision-making.

Therefore, companies are better positioned to set more ambitious goals and targets, such as the implementation of new services or the launch of a new line of business.

When is it convenient to outsource

There is no general formula that lets us know if it is convenient to outsource a certain service or several of them. In fact, many brands are wary of delegating processes from their production chain to other companies, especially for fear of losing control.

However, although this is a logical fear, there are no compelling reasons not to outsource certain processes in order to improve the quality of services. It should be remembered that most companies that decide to outsource experience a noticeable improvement in their productivity, if a trustworthy partner has been chosen.
In this sense, delegating secondary activities that slow down the production processes of the main activities to other companies, will always involve a lower risk and greater control, either because they require qualified personnel, because they are time-consuming or because they generate high costs. It is in this context that outsourcing can be the ideal alternative to achieve the objectives by any company.

The areas most prone to outsourcing are administration, advisory services and accounting and labor management, legal advice, marketing, telemarketing and sales, cleaning and security services, reception and access control, data recording, technological services in application development, infrastructures and systems, occupational risk prevention services, translations, storage, domestic transport and international transport, among others.

Publicado el 03-2022 por PBS