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Wednesday, May 29, 2024

What is Business Process Outsourcing and why does your business need it?

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Have you ever known that business world outsourcing is a six trillion industry? You are right. It is one of the biggest service providers in the worldwide economy. In India, the BPO sector has seen exponential growth since the early 2000s. 

All of us are familiar with the idea of outsourcing business processes. Nonetheless, many people are not aware of business process outsourcing (BPO) and how it works in the market. All the business possesses the ability to adapt, find and solve the problems in the most efficient ways. The ability to recognize the problems and find innovative solutions is the key to unlock the doors of success for any business. Nonetheless, it is not sufficient to reactively fix the issues when they arise. Companies must work to improve business processes before problems come to the surface. Everyone wants constant growth and improvement within the company. 

Adopting the BPO model is one of the most popular and effective methods to streamline the business. Business process outsourcing services can be a good way to utilize your business’s time, money, and resources.

Defining the BPO.

Business process outsourcing, famously referred to as BPO, is the business strategy where one company can recruit another company to perform specific tasks. It is like outsourcing certain functions of the job.

For instance, the manufacturing company can outsource their supply chain management to another company specializing in supply chain management. Hence, it intrinsically entails outsourcing one or more non-core business activities or processes to the external service provider. There will be two parties involved, the client company, the one which is outsourced and the external service provider or vendor, which would be the outsourcer. 

Here you should keep in mind that only non-core activities are generally subject to outsource. The companies cannot outsource their core activities. They devote all their attention to activities like marketing, manufacturing etc.

Nonetheless, non-core activities like customer relations, sales services, supply chain management, real-time accounting etc., can be subject to outsourcing for the client company.

Use of the BPO.

Companies might contact with BPO vendors for two main reasons;

Back office operations like IT services, payment processing, quality assurance etc.

Front office operations like customer relations, sales, marketing, grievance redressal etc.

Types of BPO.

Onshore outsourcing – when the company recruits a service provider that is situated in the same country, also known as domestic outsourcing.

Offshore outsourcing – when the firm recruits a service provider in a different country, also referred to as offshoring.

Nearshore outsourcing – when the company recruits the service provider in the neighbouring country.

Benefits of the BPO.

The company can be more flexible in its performance when the company outsources non-core activities to BPO as the company will not have to devote additional time to fixed assets and can easily convert them into variable costs. Also, it will enhance flexibility in resource management of the client company and assists in adapting to the environmental changes quickly.

Increases the speed.

It is one of the biggest benefits of BPO as it increases the speed of business processes. They provide a very good response time, and the clients can concentrate on their core functions. This breakdown of activities can speed up the overall operation. They also offer first-rate customer service. Your business can hire inbound customer service as well to provide the best quality customer care. Not only that, but you will also find tons of call center outsourcing companies in the market for the same. 


By outsourcing the business processes and activities, the client company can be cost-effective. They will save as they will not have to invest on fixed assets and costs. They can also redirect these funds to core activities. Outsourcing to developing countries can be cost-saving. For instance, if any giant MNC were to outsource their IT services in India. They would save an average of thirty percent of the company’s expenses, which is quite a margin.

More skill.

When one outsources the business activities to BPO, they allow themselves to receive the work from skilled human resources. If you outsource your supply chain management, your supply chain management will be in good hands and experts in their field. The same goes for accounting, IT services etc.

Competition with giant companies.

Crucially small and medium-sized businesses, business process outsourcing services can provide you with the opportunity to compete with giant ones. Especially when it comes to a market which is full of big players, call center outsourcing companies enable your business to run as if you are a large player, without the overhead of employee costs.


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