Business process outsourcing. Business Process Outsourcing. Advantages and disadvantages of BPO

Business process outsourcing: what is it? What types of studies and functions do BPO developers support? As programs improve, BPO experts weigh the pros and cons.

What it is?

Business Process Outsourcing (BPO) is the practice of concluding a specific workflow or several external service providers. BPO usually contains additional services, unlike core business functions, that can be either technical or non-technical. Translated from English, Business Process outsourcing means accounting for quality transactions in all current operations. Services may include:

• payroll preparation;
• accounting;
• telemarketing;
• data recording;
• social media marketing;
• customer support and more.

From “fledgling” startups to huge companies and corporations, enterprises of any scale ... The demand for outsourcing processes continues to grow as new and innovative services are introduced, and companies are looking for advantages to get ahead of competitors.

What BPO became famous for - the main "ideals" of the future of corporations

Outsourcing of business processes can be an alternative to labor migration, allowing the workforce to remain in their home country while providing their skills abroad.

1. BPO is often divided into two main types of services: back office and front office.
2. Back office services include internal business processes such as billing or purchasing.
3. Front office services relate to subsidiary customers such as marketing and technical support.
4. BPOs can integrate these services so that they work together, and not independently.

The organization of outsourcing as a continuous process, should also be associated with financial costs. But it is worth remembering that they are also engaged in these financial statements, so there is still a risk of “staying in the dark”.

Working moments on the "industrial" front of interaction

The industry is divided into three categories based on the location of the supplier. A business can achieve complete process optimization by combining three areas.

1. Offshore service owners are located outside their own country. For example, a US company may use an offshore BPO provider in the Philippines.
2. Third-party suppliers are located in countries neighboring the company contractor country. For example, BPO in Mexico is considered the closest seller of such business services.
3. Onshore suppliers operate in the same country as the contractor, although they may be located in a different city.

Different models of the business process become more the same, which allows you to install "on the company" block, managed by two or three co-founders. In other words, a corporation can be managed by a whole group of people, when without additional programs it will take about a thousand people involved in the employment and prosperity of the business.

Why business outsourcing?

Large companies choose outsourcing for many reasons. Some people believe that business exists only after the tax burden associated with outsourcing, or “shipment of jobs abroad.” However, it does matter that corporate income tax is one of the highest in developed countries. Therefore, modern companies benefit from outsourcing operations in countries with lower income taxes, because enterprises pay "for the pace of life" in the host country.

Evidence for innovation

In addition, enterprises cite many other reasons for outsourcing:

1. Cost reduction: outsourcing reduces the cost of internal labor, especially for staffing and training, as well as for the workplace and the placement of full-time employees.
2. An outsourcing company physically located in a developing country uses cheaper labor markets.
3. Finally, outsourcing allows enterprises to use variable-value models, such as paid tariffs, instead of fixed-price models, which are necessary to maintain staffing levels.

If we talk about the advantages and disadvantages of BPO, 70 percent can be given in favor of the use of such programs and services.

Passionate battle of competition - what to look for before choosing a software?

To focus on key features, remember:

1. Outsourcing allows companies to hone their core offerings instead of functions that are not directly related to their business process management. For example, with outsourcing, a company does not have to control the work of an accountant in calculating wages. Rather, he can focus his efforts on covering his business differentiators and maximizing overall growth. In turn, these actions can increase the competitive advantage of the company and improve its interaction with the value chain. Ultimately, a firm can enjoy customer satisfaction and increased profits.
2. To achieve the best results in “odd” functions: outsourcing companies specialize in what are considered fuzzy tasks of other enterprises, providing their customers with world-class capabilities.
3. In fact, an outsourcing system that invests in specialized technologies can offer customers cutting-edge achievements.

It is beneficial to all parties, but the strongest survives here. Outsourcing of business processes will always be coupled with a “technological” game of competitors, where none of them will see the strengths of the strategic plan. For example, a game company may refuse to pay for the latest payroll program in the market, but an outsourcing business offering payroll services is likely to make these investments beneficial to its own productivity, as well as to customers.

Extending the boundaries of exposure

To expand its presence in the world, some outsourcing companies can serve customers in different languages ​​around the clock, thereby relieving the local company of responsibility. They try to use their presence in several countries and minimize redundant state units. In this regard, there is a remote management of business processes, decision making and more. Everything seems to be conducted through virtuality in real time.

To provide flexibility, companies that outsource non-critical functions can act faster and more effectively in managing the risks associated with introducing new products or services. They can also redirect internal resources to more important functions in order to provide better coverage and share responsibility.

To increase speed and efficiency, they prefer that specialists cope with these tasks on their own, thereby saving time, increasing accuracy and increasing their capacity. For example, BPO, which specializes in records management, can automatically index documents, make them available for retrieval, and support the company in accordance with legal requirements. This replaces manual data entry and storage. Possessing such inhuman resources and capabilities, the question arises as to which business processes should be outsourced and which ones are best performed by ourselves.

Transfer of affairs: a robot or a mechanized human-machine?

There is a good chance to trust the person to whom you outsource your projects, because he is armed with the best set of skills for a specific purpose. Business technology is used for this, so that time is divided into parts. Each of them will perform many tasks. If you do everything manually, then the profit will decrease, so the creators urge you to spend time on a standing resource that can then shoot.

What is the catch of an ideal business strategy?

One of the biggest downsides is that you accidentally expose yourself.

1. What happens if the person you entrusted the case leaves?
2. What if they steal your ideas and pass them on to other companies you compete with?

There are many advantages to working on established models of a business process, but first you need to make sure that you follow how everything can turn against you.

What types of services do outsourcing companies support?

BPO providers now support a range of services and help fill many of the gaps within companies. Some of the industries involved include healthcare, pharmaceuticals, energy, business services, retail and e-commerce, telecommunications, automobiles, utilities, banking, supply chain, power solutions and asset management. In fact, demand growth has led to the emergence of sub-specialties, including:

1. Information Technology Services (ITES) BPO Services: This form is used by Information Technology (IT) via the Internet or a data network to provide services.
2. Knowledge Process Outsourcing (KPO): KPO has slightly changed BPO. Companies offer more technological experience. They can also provide domain-based business knowledge and experience. Some examples of services include research, analysis, or working with Microsoft Word and Excel. To fulfill their obligations, they hire people who are competent in a particular field, whether it be outsourcing of non-core business processes, or specialized areas.
3. Legal Process Outsourcing (LPO): LPO is a subset of the previous one and covers a huge range of higher level legal work. LPO firms can develop patent applications and legal agreements, as well as conduct research. Some companies even advise clients.

Research Process Outsourcing (RPO): Another KPO branch that specializes in research and analysis. Companies conduct analytical work that supports business, investment, biotechnology and marketing firms that require outsourcing services.

Specialization in various industries

Each BPO company specializes in specific services. They can be grouped as follows:

1. Customer interaction services: outsourcing organization will cover voice mail services, meeting schedules, services, marketing program, telemarketing, surveys, payment processing, orders.
2. Back-office operations: includes processing of checks, loans and debit cards; direct and indirect purchases; transport management; logistics and shipping; warehouse management.
3. IT and software operations.

Recent technical support functions include application development and testing, implementation services, and feedback service with potential customers who wish to experience outsourcing of business processes. For example, manual data entry can be replaced by automatic data capture, increased information consumption, and shorter cycle times.

Work with the financial part

In the field of money management, BPO has a separate arsenal of workpieces and tools:

• financial and accounting services: billing, debt, general accounting, audit and regulatory compliance;
• human resources services: human resources and staff policy, payroll services, healthcare management, hiring and recruiting, labor force training, insurance and retirement benefits;
• knowledge services.

Recent processes may more include data analytics, data mining, data and knowledge management, as well as Internet and web research, developing an information management program and providing customer feedback.