Back to Insights Business process outsourcing (BPO) dates back to decades ago. However, in light of modern freelancing platforms, it has gained infamous popularity. Today, business process outsourcing Back to Insights

How to Handle Business Process Outsourcing Effectively

February 14, 2019

Business process outsourcing (BPO) dates back to decades ago. However, in light of modern freelancing platforms, it has gained infamous popularity. Today, business process outsourcing is an extremely effective way to conserve internal resources. By giving companies access to the specialisations of other organisations, BPO can reduce costs, increase efficiency, and even improve accuracy, all at the same time.

Of course, a company can’t outsource to just anyone, a certain process must be in place to ensure quality results. This guide will explain how your business can utilise BPO effectively.

Business process outsourcingWhy Use BPO?

A long list of reasons can encourage you to use BPO for your company First and foremost, it costs less. With BPO, you don’t have to hire or train in-house employees and you don’t have to worry about related equipment or software. Secondly, BPO gives you access to expert talent. An organisation that specialises in the activity will handle the task much more effectively, meaning things will get done sooner and more accurately.

Finally, it usually comes with extra benefits. For instance, BPO often results in higher security, which is especially important for all financial processes that you outsource. The company handling these activities will likely have better security protocols in place because their main work is finance-related. Your company doesn’t have the same resources to invest in such infrastructure because these things aren’t your company’s speciality.

What to Outsource

A great common example of business process outsourcing is data entry, which many companies outsource because it’s the sensible way to go. A company will save time, money, and a lot of resources by having a third party do this job.

With BPO, a company that specialises in data entry manages the activity on behalf of the business. The alternative is to construct a data entry department on-site, which would mean staffing new workers and implementing a new system. These are things that would cost a substantial amount of money, so BPO only makes sense in this case.

One thing that’s often seen with BPO as well is better end results. Most likely, a company will end up getting data entry finished more quickly by outsourcing to a specialist. Trying to take it on in-house would just drain resources because the business lacks the capacity to do it efficiently themselves. Outsourcing data entry allows them to take advantage of another organisation’s speed and expertise.

Back Office vs. Front Office

Oftentimes, business process outsourcing gets split into two categories. Back office outsourcing usually consists of necessary business activities, with data entry and content moderation being good examples. Front office outsourcing usually involves customer-facing tasks, such as lead generation. Lead generation is something many companies outsource because it is complex and time consuming.

A business might participate in both back office and front office outsourcing at the same time, it all depends on their needs. When deciding what to outsource, internal capacity is a major deciding factor. Certain activities are likely taking away from production time or other important tasks and, in those cases, outsourcing is the smart choice.

How to Outsource Effectively

The purpose of BPO is to get another company to take care of something on behalf of your company, but they need to do it more quickly, more affordably, and more accurately than you can in-house. Unfortunately, you cannot just hand a task over to anyone. When you begin looking at BPO, you’ll run into plenty of companies that don’t live up to their word. Your decision should come down to quality, communication, and cost. These five questions will help you select a company with the right key traits.

1. Are They Capable?

This is the first question you’ll need to ask when looking to outsource and the company needs to back up any claims they make with actual accomplishments. They may not have experience with your specific tasks but what matters is that they have a proven track record of communication and attention-to-detail.

With those traits, they can create an effective process that fits your needs, so long as they have the resources in place to handle the demands of your business. This doesn’t necessarily mean the company needs hundreds of employees because such large companies usually move slower. You just need to pick a company that has access to a lot of resources so they will be able to scale with you.

2. Are They Accountable?

The companies you outsource to need to share your organisation’s values. Integrity and reliability are among the list of things you need to look for in a business and the right company will invest time into learning what you need them to know.

3. Are They Dynamic?

The right company will become a partner to your business for the long-term, so think about their speed and aggression. Not just the speed at which they function but their approach to growth and success. A company that refuses to slow down will challenge your organisation to move and grow too.

4. Are They Innovative?

As a business, you know things change constantly. Many companies that have been around for a while have stagnated and they are sometimes stuck in their old ways, often using outdated processes.

Meanwhile, younger companies are on the cutting edge and they don’t have a status quo to hold them back. They don’t follow the “old way” of doing things, they are able to integrate new technology right out of the gate, and that’s what you need to take advantage of.

You need an agile company that adapts to every change in the market. They shouldn’t just survive, they should always try to come out on top.

5. Are They About More Than Money?

It’s business, money matters, but at the same time, a company that just cares about the bottom line isn’t going to go too far. They need to care about business relationships as much as you do, so the company you outsource to should go the extra mile in order for you to both succeed, together. Establishing communication and shared values is always worth the time investment.

Take It to the Next Level

When used correctly, BPO can be an invaluable part of your business. With time, you’ll be able to add experienced partners to your external team and these partners can go far beyond prescribed activities. If you choose the right companies, they will help you succeed in every aspect of your business, so take the time to do your research. When it comes time to hire, your business will reap the rewards of the time you have invested.

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