The global technology revolution has brought a never-ending onslaught of the digital shift. As a response to the burgeoning customer demand, companies tend to outsource business processes to stay focused, control costs, and reduce underlying risks.
While many contract out lower-value functions, striking the right balance between business growth and expenditure remains a challenge. Enterprise-level service providers, however, showed promising revenue growth in 2021 from 1.6% to a steady 5.1% in less than 4 months. Today, sourcing agreements consider defined outcomes, business process platforms, and technology expertise as key service elements.
The blog highlights the perks and challenges associated with Business Process Outsourcing (BPO), how the digital upheaval is impacting the BPO industry, and what it has to offer for business growth.
Business process outsourcing refers to the act of delegating certain business functions to third-party vendors to increase in-house efficiency, maintain cost control, and focus on priority business operations. BPO has been around since the 1970s when companies operating in the manufacturing industry started acquiring external parties to make up for the additional labor.
In the past, multinationals were the only ones that could afford outsourcing services. Fast forward, businesses of all sizes have realized the advantages of business process outsourcing with intelligent automation tools and flexible procedures, incorporating BPO services wherever necessary.
As per McKinsey’s study on the benefits of business process services, the BPO industry has garnered an immense $163 billion worldwide, while the global footprint is forecasted to top $183 by 2023.
A rather calculated prediction by the global consulting firm, in the same study, suggests this growth will be fueled by the 7% per annum growth of digital services and through automation of the Business Process as a Service (BPaaS) niche.
While enterprises are increasingly opting for BPO services for cost optimization, better risk management, and improving the productivity of internal teams, let’s have a look at some challenges along the way and how to address them.
Business process outsourcing is a good option when your company is looking to expand and explore new avenues in the market. However, one important thing to consider while outsourcing to third parties is keeping track of business costs and the adoption of BPO services.
Identifying which activities require minimal supervision and assigning priorities is the first step toward outsourcing your business processes. This helps determine the combined time and effort required for you to calculate the number of services and the cost spent to operate your business smoothly.
One important aspect to consider while outsourcing to third parties is to determine the level of risk. In an outsourcing arrangement, enterprises could lose their competitive advantage as a result of over-reliance.
The fact is justified since 70% of the total industry value comes from traditional BPO services and is expected to maintain a steady revenue pool for the next three to five years. While expanding your business across industries calls for effective BPO services, creating a digital ecosystem that retains a competitive edge is a key driver for your success.
When working with a global BPO service provider operating outside your country, communication barriers may persist that can delay your operations, ultimately reducing feedback and service delivery.
However, leading service providers utilize effective project management tools that help create better process visibility for your business to accelerate better.
Business process outsourcing is nothing new to enterprises, particularly those offering services across the globe. Many have migrated routine business functions such as employee payrolls, customer support, and quality assurance to intermediary entities.
To date, enterprises have managed higher-value operations by themselves to maintain in-house privilege over products and services. Now with the constant influx of customer data, processes that are more central to businesses are also being outsourced, keeping intact service-centric capabilities.
In the age where data drives decisions, enterprises have better prospects of maximizing growth by partnering with suppliers, and other service providers. While this oftentimes limits strategic options for an organization, the secret sauce to success lies in creating the right combination of in-house and third-party services.
Offshoring services comes with certain merits and demerits. Service-level agreements (SLAs) help streamline outsourcing deals and manage the underlying risks.
However, quality control management and service cost optimization are barriers that persist in vendors servicing operations to business entities. Establishing communication standards and business management methodologies can accelerate BPO efforts across different organizations in the long run.
BPO services provide businesses with several opportunities leading to new offerings for a new and existing customer base. Moreover, risk management becomes easier when working with BPO service providers since you can focus on critical business processes, providing better opportunities to manage your internal resources effectively.
With the power of business process outsourcing, businesses can expand globally, offering services across the globe with 24/7 multilingual support from BPO vendors. Enterprises can now assign the responsibility of frequent, supporting processes like technical support, human resources, and accounting to outsourcing parties to get the job done without incurring overhead.
When a company outsources a department or process, it is handled by classified experts. A fine example of this is an SEO-based company that offers lead generation services to an enterprise, optimizing their website strategy and traffic through their field-specific expertise. This approach can enhance productivity, improve accuracy, and optimize resource management by targeting key operations where you need help.
Systems Limited blends the right mix of expertise with the best-in-class business strategy to offer dedicated outsourcing services. Our services span a wide array of industries from financial services to telecom, retail, manufacturing, public sector and many more, incorporating innovative BPO capabilities to empower your organization through automation, digital transformation, and omnichannel support.
Our team of skilled BPO professionals provide high-quality support to enterprises across multiple regions helping them thrive with business agility in these uncertain times.