Guide to Business Process Outsourcing

Outsourcing is often separated to front-office tasks and back-office tasks.

To succeed, 21st century businesses must be highly efficient. Many turn to business process outsourcing service providers (BPOs) to help achieve these goals.

A key factor in transforming a business from “good to great” is embracing and implementing modern and proven business tools and techniques and process management practices.

Outsourcing has become the norm for many businesses

Outsourcing has become the norm for many businesses.

This article will explain business process outsourcing. We’ll cover what it means and how it can help you transform from “good to great”. It’ll highlight areas of your business you could outsource, and many more tips to help determine if it’s right for you.

How Will Business Process Outsourcing Help You?

So, what do we mean by outsourcing?

Business process outsourcing is not new. Successful businesses have been outsourcing (or contracting out) some of their business processes to BPO companies since the 1970s. Initially, work that was outsourced was confined to data entry and basic administration.

Times have changed. Gradually, the scope of outsourced services was extended to accounting and payroll, telemarketing, call centres and customer support. Businesses focused on outsourcing tasks they considered were non-core business activities or functions.

From small solopreneurs and start-ups to large global enterprises, outsourcing continues to provide many benefits. Businesses who embrace it often outperform their competitors.

Outsourcing is often used as a key business strategy to slash overheads and processing costs. It enables smart businesses to focus on core activities, such as growing their business and increasing revenues. Consequently, the BPO industry has witnessed accelerated growth.

You might be wondering how it could help you accomplish greater outcomes in your niche or industry.

To further explain outsourcing, you need to understand the two fundamental types of outsourced activities. Front-office activities and back-office tasks.

Outsourcing is often separated to front-office tasks and back-office tasks.

Outsourcing is often separated to front-office tasks and back-office tasks.

Front-office activities focus on marketing and sales, and strategy. Back-office services include support processes, such as accounting, technical support, billing, payroll, data entry, and much more.

Although these activities are often carried out independently, when combined they can offer amazing benefits – like the links on a chain become stronger.

When managed ineffectively, many businesses carrying out these processes themselves, find they drain their budget and resources. BPOs often deliver 40-60% cost saving benefits, which allows them to maintain tighter control on their expenses.

This is particularly useful for businesses seeking to implement cost-cutting strategies.

Outsourcing non-core and time-consuming activities allows businesses to reallocate employees’ time to more valuable tasks.

Other than the obvious cost-saving benefits, outsourcing offers additional advantages. It enables businesses to enlist external specialists with the appropriate skills and knowledge. This is especially helpful if current staff lack this experience.

There are many more significant advantages to outsourcing.

Why Should You Outsource?

One of the more obvious advantages gained by outsourcing is that it reduces overheads. This increases profits and enables businesses to reinvest the savings into growing their businesses.

Regardless of a business’ size, age and location, outsourcing delivers numerous benefits. Businesses of all shapes and sizes can scale their businesses, and even get ahead of their rivals.

The Benefits of Business Process Outsourcing

1.  Start-Ups, Small Businesses and Solopreneur

It’s a myth that only big companies enjoy the benefits of outsourcing. Small businesses, solopreneurs, and start-ups can enjoy the same benefits.

We know that operating your own business can be demanding. You may still have the same passion as when you started your business. But the tasks mount up and there’s never enough time in the day. You don’t have time to do everything.

Running a successful business is no easy task…with or without staff.

Running a successful business is no easy task…with or without staff.

Solopreneurs who outsource enjoy greater efficiency and know key tasks will be completed sooner. They acknowledge that juggling everything on their own is a recipe for disaster. Sooner or later, they will drop the balls.

By using a reliable outsourcing company, solopreneurs focus on their business core tasks. They spend more time on business development and interacting with customers. They spend much less time on handling time-consuming and menial activities – leaving the outsourcing company to handle them.

2.  Small and Medium Sized Businesses

Small to medium business enterprises (SMEs) play an extremely important role in the economy. They have potential to reach even greater heights by taking advantage of the benefits outsourcing offers.

It’s a sad myth that outsourcing is expensive for SMEs. Business process outsourcing offers a way for any business to become more cost-efficient…regardless of size. A SME can also reduce its operating expenses by outsourcing some of its business processes.

As would be expected, many small businesses lack all the skills and experience required to succeed. Outsourcing can fill the gaps. SMEs can acquire people with the required skills to carry out specialist work, such as accounting and payroll.

Outsourcing offers SMEs highly flexible and cost-efficient solutions. SMEs can choose which activities to retain and which ones to outsource, which offers greater financial freedom. They pay only for what they need and don’t need to pay for expensive equipment, or even worry about annual leave and sick pay.

3.  Larger Companies

Large companies, by their very nature, handle many processes. Many see outsourcing as an advantage by outsourcing some business processes to lower their costs. They seek to significantly reduce expenses, such as staff costs and equipment.

Unsurprisingly, large companies tend to have many employees. Consequently, payroll costs are typically the biggest expense and are fixed, regardless of the company’s income levels.

However, by outsourcing, fixed costs like these can be significantly reduced. Savings are often directed to income generating activities that help achieve business growth.

Many large businesses seek to lower their employment costs

Many large businesses seek to lower their employment costs

Large organisations often struggle to manage high levels of efficiency with so many staff. By outsourcing, these companies can impose stricter service and performance levels on the service provider.

Also, there are still no guarantees that larger businesses have the right expertise in-house. BPO provides access to industry experts who have the relevant skills and experience to assist as and when needed.

Use this guide as a valuable reference as you begin your journey to business process outsourcing. Hiring a reliable business outsourcing company should ensure you stay on a straight path.

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