BPO is an acronym for Business Process Outsourcing that involves engaging a third-party provider to be responsible for providing part or all of a business’s operations most commonly for customer service (e.g. call centres) and back-office functions like invoice payable, forms processing, accounting and so on.
What are the benefits of using a BPO?
There really are numerous reasons why companies engage the services of a BPO including:
- Leverage external expertise – access instant expertise that can benefit your business.
- Improved efficiency – BPO’s are typically more efficient as they are experts in those functions. More modern BPOs are also using technology such as Robotic Process Automation to deliveryever more efficiency and cost savings to their customers.
- Improved compliance – BPO’s typically have well-established processes with strong governance that can save you considerable time, energy and expense in establishing.
- Cost savings – From improved efficiency, expertise, compliance, technology, scale and so on, a BPO can offer savings over performing the same function in-house.
- Flexibility – You can easily scale up and down to suit business requirements.
- Focus – By letting Business Process Outsourcers handle discrete functions for your business, your team can focus on your core expertise and future planning.
Are there any downsides of using a BPO?
It would be great if there were no risks in business but anytime you engage a third-party to perform business functions it always carries with it some risk.
Common risks with engaging a BPO include:
- Estimating costs – whilst direct labour can be easy to calculate, there are a range of other costs like recruitment, training, technology, management and so on that can make it harder to determine the exact price.
- Exchange rates – Especially with offshore BPO’s, currency exchange rates can have a big impact on price.
- Training costs – Both for initial training and ongoing training.
- Turnover – If a BPO has a poor culture with high turnover it can lead to higher costs for recruitment, more training, lost productivity etc.
- Productivity – Whilst a BPO can often be more productive, there can be slowdowns depending on a range of factors including authorisation levels, system access etc.
- Systems access – Depending on the function, there may be requirements for the BPO to integrate with your internal systems which can be complex and or introduce security concerns.
What types of functions can be outsourced to a BPO?
There are literally hundreds of functions that a BPO can manage for you including:
Front Office – work that involves direct interaction with a customer
- Customer service – this is a broad bucket that can include a range of different skills across multiple channels like telephones, social media, email and so on. It can include:
- General questions and Answers
- Complaints and escalations
- Billing and payments
- Advice and counselling
- Product recalls
- Emergency response and roadside assistance
- Sales calls including everything from inbound sales, outbound telemarketing, direct response, lead generation, appointment setting, order taking, upselling, fundraising and retention.
- Technical support – Helpdesk support, problem resolution and troubleshooting.
- Collections – either handling inbound payments or making outbound calls to recover outstanding debt.
- Surveys – outbound calls to survey consumers and businesses on a broad range of topics. This can also include database cleansing to improve the quality of your list.
- Fundraising – similar to sales with a focus on raising funds for charities/not-for-profits. This can be both outbound and inbound (charity drives etc.).
Back Office – work with NO direct customer interaction
- Human Resources – recruitment, Payroll processing, Employee Database management, annual leave management
- IT Managed Services – Infrastructure monitoring, mobile device management, IT operations, software updates and patching
- Administrative – Data entry, data processing, document processing, digital mailroom, records management, filing/database management, sales support
- Finance and Accounting – General bookkeeping, accounts payable and receivable, financial reporting, bank and account reconciliations, credit card collections.
Where can you find BPOs?
You can find BPO’s onshore (in Australia), offshore (overseas) and on-site (meaning they can work on your premise with your internal teams however the staff are employed by the BPO.
There are all sizes of BPOs – large global outsourcers with hundreds of thousands of employees scattered across offices all across the world through to small niche outsourcers who only focus on a particular skill with a handful of employees.
How do you choose the right BPO?
Engaging the right BPO can be a critical decision for your business – get it right and it can be a fantastic partnership that benefits both partners. Get it wrong, and, well it can be a nightmare.
You can find a list of BPOs on our CX Directory where you can directly engage with outsourcers to ask questions, request proposals, organise site visits etc.
Alternatively, you can engage expert consultants who have experience with business process outsourcing who can help with the selection, engagement, optimisation and so on. Search the CX Directory for specialist outsourcing/BPO consultants >
We also offer a free industry service that can help recommend BPO’s for you. We’ll provide you with a few recommended Business Process Outsourcers that are best suited as a potential partner for you. Just contact us >
More resources on Business Process Outsourcing:
- Read our article on call centre outsourcing with pricing, types of commercial models and more >
- Read our expert tips, guides and articles on outsourcing >
- Read our latest news articles on Outsourcing >