What is BPO?

What is BPO?

If you’re not familiar with the term BPO (business process outsourcing), you’re not alone. In fact, many people are somewhat fuzzy on what the term actually means, and even more, are unsure of how it can add value to their brand!

The secret to every business’ success recipe is adaptability, problem-solving, and innovation. But the ability to identify problems and find solutions to them is arguably the most important.

But fixing problems as they arise isn’t enough. Businesses must also work to improve core functions to prevent issues from occurring. Continued growth and improvement are the aim of every business, not merely maintaining a certain status.

This is where BPO comes in: to streamline processes.

Understanding BPO

Any business that hires another company to perform a process the original business needs to operate uses BPO. In short: BPO is the use of third-party service providers to take care of non-core business activities.

It makes sense to outsource the services of another more specialized company, to handle business tasks more effectively than your in-house processes. Outsourcing can also be more efficient than hiring in-house talent and funding a department within your company to manage non-core business functions.

From accounts to customer relations, document management, and HR, various tasks can be outsourced. Unlike automation, outsourcing is the act of paying another company to run specific business processes on your behalf. Automation, on the other hand, uses another company’s software to streamline your in-house processes.

Different Outsourcing Options

Whenever a company considers using BPO, they’ll look to outsource one of two categories of services: back-office or front-office operations. Back-office processes deal with in-house business necessities such as payroll and billing. Front-office BPO refers to services like customer service, marketing, and tech support.

Depending on the nature of your business, your organization might benefit from one or both types of BPO.

You also have the option of choosing offshore, nearshore, or onshore BPO services. Offshore refers to using a BPO vendor abroad. Nearshore is when you contract work to a vendor in a neighboring country. And onshore refers to using a company within your own country but outside of your state or region.

What Are the Advantages of BPO?

The benefits of business process outsourcing include:

Cost Savings

When you outsource certain services, there’s no need to pay in-house staff for non-core business processes. The BPO vendor is also responsible for maintenance and the upkeep expenses associated with the functions they handle.

Improved Efficiency

BPO vendors specialize in streamlining core and non-core business processes. This means they can handle these tasks more efficiently and effectively than most in-house departments.

Laser Focus on Core Business Functions

Most companies, but more specifically startups, can encounter difficulties when it comes to ancillary business activities. But by entrusting BPO vendors with non-core processes, your organization will have more time to focus on core business activities.

Global Growth

If your brand is focused on entering the global marketspace, you’ll need local market knowledge, expertise on local laws, and fluency in the primary language of the foreign market you’re targeting. When you work with a language service provider that can assist with all of these tasks, it’ll boost your efficiency and lead to quicker expansion.

Competitive Advantage

Companies that choose to use BPOs for non-core functions can refocus their resources on what sets them apart from the competition. The BPOs can also theoretically deliver the services for which they were mandated at the highest level, which often yields greater precision, accuracy, and speed too. All of these combined can help brands gain a competitive advantage in the local and global markets.

Are There Any Drawbacks to BPO?

Although the advantages of BPO are far too significant to be ignored, some issues must be thoroughly considered before entering into a contract with a BPO vendor. These include:

Security Issues

Whenever a business contracts a BPO vendor, the risk for a security breach is a potential problem since sensitive data must be shared and processed.

Reliance on BPO Vendor

When companies rely on BPO vendors for extended periods of time, it’s possible for the brand to rely too heavily on the outsourced service.

Communication Problems

Whenever working with an offshore BPO vendor, the language barrier can be a pitfall to efficiency. Outsourcing development and IT services, which demand the involvement of many people, can lead to errors in processes due to misunderstandings. Some of these errors can be very costly too.

Interested in BPO?

Day Translations has over 15 years of experience in helping businesses take center stage in the global marketplace, now with our DayBPO services, we can help your brand cross the language barrier too! Get in touch with us today to learn more about our global outsourced business services solution!