Business Process Outsourcing (BPO) is the generic term used for engaging another company to deliver services on your behalf.
When referring to a single entity the term used is a Business Process Outsourcer (also BPO).
But wait, there’s more!
Business Process Outsourcing is commonly split into two definitions:
1. Front office outsourcing
In the Customer Experience and Call Centre world, Front-Office business process outsourcing typically refers to using third-party outsourcing companies (Business Process Outsourcers) to handle customer-facing activities like your primary or overflow calls as well as live chat, emails, telemarketing, sales and more.
2. Back Office outsourcing
Back-Office outsourcing typically refers to non-customer facing activities like accounting, payroll, HR, claims etc.
Business Process Outsourcer Locations
One of the most critical decisions in moving towards a BPO solution is determining the location of your Business Process Outsourcing provider.
The common terms you will hear when people refer to business process outsourcing locations are:
On-shore Business Process Outsourcers are located in the same country as you.
From an Australian perspective, that means using a BPO located in any Australian state.
Even Tasmania 🙂
Refers to countries nearby that are in relatively close proximity and may offer some cost benefits.
Again from an Australian perspective, New Zealand is considered our near-shore location.
An off-shore Business Process Outsourcers typically offers the highest cost savings using countries with significantly lower salaries.
For Australia, the most common outsourcing locations are the Philippines, South Africa and Fiji.
Pros and cons of using a Business Process Outsourcer
There are a number of pros and cons in engaging a business process outsourcer. Trust me, I’ve worked on both sides of the fence!
Prior to working in the Business Process Outsourcer sector, I was always a bit sceptical about outsourcing my customer experience functions in particular.
My thinking was that no one was going to look after our customers as well as our team could.
But having spent time at a BPO I can assure you, from my experience, I got that wrong.
BPO’s essentially live and die by the quality of service they provide so trust me, they are very keen to get it right.
Benefits of using a call centre Business Process Outsourcers
There are a lot of benefits in moving some or all of your call centre functions to a Business Process Outsourcer:
Business Process Outsourcers are experts and running contact centres or back-office functions.
Unlike in your business where there are lots of different business units all vying for attention, a BPO is focussed purely on being the best at what they do.
Tapping into this expertise, the right BPO will guide you on how to improve your CX, lower costs, better utilise technology and more.
2. Lower Costs
Even with on-shore Business Process Outsourcers you will typically save some money due to their greater efficiencies, although the significant cost savings are more attributable to the near-shore and off-shore BPO’s where you can save up to 70% of the costs of running the same contact centre on-shore.
Engaging a call centre outsourcer makes scaling your business up or down a lot simpler.
As the Business Process Outsourcer manages all the staffing issues you don’t need to worry about recruitment, contracts, awards etc.
4. Improved Customer Experience
As well as being able to tap into the experience of the Business Process Outsourcer, there are other ways an outsourced solution can improve your customer experience including:
- Hours of business (you can offer extended hours that would not be cost-effective on-shore)
- Less wait times (as you can afford to have additional resources)
- Improved self-service (Tapping into the experience and technology of the BPO)
Risks of using a call centre BPO
Allowing another company to manage your customers in particular, unfortunately, doesn’t come without some risks.
Of course, applying due diligence in the selection process can minimise the risks or using a service like our free CX Connect service where we can provide a recommended list of suppliers who can meet your requirements.
While an initial hourly rate can seem incredibly attractive, there is often a range of hidden costs that can take the gloss off the expected savings.
Travel costs, increased training requirements, legals etc can add some significant costs to the project.
And depending on the location you choose, international currency exchange can also take the shine off the savings.
As the Philippines is paid in US currency, in the past five years the cost of outsourcing to Manilla from Australia has increased by 30% due to the $AUD falling against the $USD.
Whilst your security might be lock-tight the same may not apply with your call centre partner.
With the current focus on data protection, PCI-DSS standards etc you need to ensure the Business Process Outsourcer meets the standards you expect or need.
There are hundreds of call centres outsourcers across the globe and knowing the right ones to choose can be tough.
Many call centres have specific areas of specialisation like sales or service, but there are also specialists in different industry sectors – e.g. outsourcers that specialise in the finance industry, FMCG etc.
Ensuring you find the right outsourcing partner can take up a lot of time.
Particularly with off-shore call centres, maintaining a strong level of communication is paramount to success.
Language differences, time zones and cultural differences can all result in communication difficulties so it pays to ensure you have an agreed communication plan as part of your contract.
Breaking up is hard to do
Engaging a Business Process Outsourcing partner takes a lot of effort to put into place.
If the relationship sours, it will require a significant effort to find a new outsourcing partner whilst you are trying to exit out of your existing one.
How to find a Business Process Outsourcer
If you think engaging a Business Process Outsourcing partner for your business is the right strategy there are a few ways you can begin your search:
- Search through our free CX Directory where you will find BPOs listed by country and skillset as well specialist outsourcing consultants.
- Call us for some free advice on 03 9008 7287
We’ve got lots of information that can help you in considering Business Process Outsourcing for your call centre:
- We’ve got a heap of free downloads including our ‘Complete Guide to Call Centre Outsourcing, Call Centre Cost Guide and more.
- You can find lots of expert articles and the latest news in our outsourcing category