Business Process Outsourcing: An Overview
So, what is business process outsourcing (BPO)? What do countless forward-looking businesses seek to gain from it?
There’s no rocket science involved. They seek to tackle and streamline their operational overheads.
You’re probably asking how you could benefit.
Let’s explore how business process outsourcing could create new income streams and increased profit margins. We’ll discuss and offer some advice on how could execute those strategies. All without damaging your brand or your customer service.
This article will help dispel any doubts you may have about business process outsourcing. It will show you how to use it to increase revenues, increase profit margins, and support growth.
BPO will save you time and money.
The current global economic climate and various pandemics have created significant concerns. Business face significant issues due to supply chain issues, rising costs, and staff unavailability.
Evaluate opportunities to increase income and profit margins.
You may be questioning why you would choose to outsource when you already have staff. The answer is simple. Many straight-forward tasks or activities don’t require highly trained staff to complete them.
Customers exercise their choice. They demand high standards and fair prices in today’s ever competitive environment.
Having cost effective and efficient processes will be critical to maintain customer loyalty. They enable businesses to scale up to address growth and increase revenue.
Successful organisations know this. They operate efficiently and continue to reinvent themselves by being innovative and creative. Management continually seek improvement and use business process outsourcing to move from average to great.
The Rise of Business Process Outsourcing
Business process outsourcing is commonly used by organisations to engage third parties to complete certain business processes. Often professional BPO organisations have lower employment overheads, and highly trained personnel and experienced staff.
Originally, business processing outsourcing was focused on slashing overheads. The 21st century has evidenced major paradigm shifts in how it is perceived.
It’s now frequently used as a strategy to combat global economic challenges. It enables organisations to become more efficient and to generate better results for their owners and customers.
As organisations seek to tackle to improve their “bottom-lines”, they identify business processes to outsource. They gain access to a global talent pool, without compromising quality.
Business process outsourcing offers flexibility to scale up or down, as needed.
You might be asking yourself whether the commercial benefits are worth the risk. The following will help to explain the benefits:
#1. Focus on Core Business Activities
Business owners and management are often bogged down with repetitive, less important activities. Their time would be better allocated to critical business activities, such as business development, strategy and communicating with customers.
Successful businesses outsource their lower priority, repetitive, and routine tasks to leverage the BPO company’s skills and experience.
#2. Reduced Overheads
Many organisations want to reduce overheads to improve profit margins. Its often easier and quicker than increasing revenues. BPO companies, such as an accounting business process outsource service provider, retain pool of highly trained staff.
BPO companies employment costs are often considerably lower. Organisations can benefit from this as well as utilise BPO staff on a full-time, part-time, or even on a casual basis.
These savings significantly improve an organisation’s cashflow and profit.
#3. Eliminate Unnecessary Infrastructure Costs
Avoid large investments in buying new or upgrading computer equipment, software, and office furniture. Many business process outsourcing companies invest heavily in their infrastructures to maintain high standards.
Automate many of your repetitive and routine tasks.
Let’s use your bookkeeping and accounting tasks, as an example.
Do you enjoy screening countless accounting transactions, generating financial reports and numerous tax departments’ returns?
Many business owners don’t and outsource this work. An accounting BPO service provider will do this for them. They can prepare and circulate invoices and statements and collate bills to pay.
Your accounting systems will be up-to-date. You’ll have accurate financial reports to help you make crucial business decisions.
#4. Access to a Talent Pool of Highly Trained Professional Staff
Business process outsourcing companies recruit and retain experienced people. An Indian BPO, for example, has access to much bigger talent pools. Many businesses find it hard to access that volume of highly talented individuals.
Recruiting new staff takes time. Management frequently need to screen numerous resumes and interview short-listed of applicants. New staff often need time to learn certain tasks. Time and cost associated with these are avoided when these tasks are outsourced.
RELATED ARTICLE: ARE YOU READY FOR AN OUTSOURCED ACCOUNTING SERVICE?
Is Business Process Outsourcing Right for You?
Astute business owners use business process outsourcing as an essential strategy to grow their business. It allows them to focus “on” their business, and not be “in” their business.
They obtain immediate cash flow benefits and improved margins. Fixed costs, such as employment costs, IT equipment, office furniture, etc are avoided and become variable.
BPO companies staff can be hired on flexible terms to cater for seasonal demand or varying workloads.
Many businesses acknowledge that outsourcing certain activities would be highly viable.
However, they are then faced with choosing a reliable business process outsourcing partner.
Before choosing one, we recommend you consider a few factors. Ascertain their industry knowledge, experience, and reliability. Determine how they’ll support your strategies and how you’ll maintain quality, while achieving the cost savings.
I hope you have found this article helpful. I hope it helps you decide if business process outsourcing is a suitable strategy for you.