BPO stands for Business Processing Outsourcing. It is a cost-saving method that allows companies to outsource non-core tasks especially customer care, customer service, product implementation, digital marketing, etc.
What is Business processing Outsourcing?
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It is a method of assigning work to others, assigning various business operations to third-party vendors. It is basically a contract between an organization and third-party vendors with regard to its workflow activities and commitment. The outsourcing of secondary business operations at present is done by all multinational corporations.
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Companies often benefit from the practice of BPO as it is a cost-efficient method and a lot more flexibility can be achieved. Third-party vendors are on the payroll for the completion of a specific task.
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BPO offers technical support, customer care services, human resources, communication, etc. BPO has gained considerable significance.
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BPO originally applied purely to manufacturing institutions such as cold drink manufacturers that outsourced large parts of their supply chain. It now includes outsourcing of services as well. BPO functions can be classified as back-office outsourcing and front-office outsourcing.
What is the difference between BPO and call center?
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BPO is an organization that is responsible for performing operations of another business organization, whereas a call center is part of a client's business setup. BPO is used to save costs and increase the productivity of a company whereas a call center involves handling customer calls. It handles the queries and doubts of customers over telephone calls.
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However, a call center can also be seen as a type of BPO. For example, an organization can outsource its customer service calls to a call center.
What are the advantages of BPO?
1. Time-Saving:
It allows an organization to immediately free up more hours in a day. When companies outsource repetitive tasks, the time spent repetitively on those activities can now be used for other important work. This also allows other departments of a company to take more responsibility.
2. Cost Saving:
One of the most important factors for a company to use business processing outsourcing is the saving on its costs. BPO has given rise to a large group of employees available at very low wages, which results in huge cost reduction and better revenue generation for a company.
3. Flexibility and Scalability:
When companies are effectively able to outsource and do more with time and money. It eventually leads to better growth potential and flexibility in the business. BPO significantly reduces the risk and allows a company to increase its activities quickly. BPO can be a great starting step for businesses that are looking to scale fast but they have to be cautious at the same time about hiring full-time employees.
4. Availability of experienced employees:
Hiring new employees and training them is quite a hassle and a huge cost to a company. Outsourcing work to an already established organization with all the resources becomes a lot more convenient for a company.
5. Project-based manpower:
Every business goes through a phase when a short-term project requires additional manpower. It is highly unlikely for a company to hire new employees for a short-term project. This is the perfect opportunity for utilizing a BPO. BPO allows a company to outsource their short-term project and set a specific timeline and workflow for the external contractors. This way running a short-term project is very convenient for an organization.
What are the types of outsourcing?
There are 3 types of BPO outsourcing:
1. Offshore outsourcing:
It happens when a company hires a company overseas to fulfill specific work requirements. For example, a company in Australia is outsourcing to a company in India.
2. Onshore outsourcing:
It is a process of outsourcing work to another company within your country.
3. Nearshore Outsourcing:
It happens when you outsource work to a neighboring country. For example, if your company is in India and you outsource work to Bangladesh.
What is the future of the BPO industry?
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Due to the advantages of the BPO industry, it has seen tremendous growth over the years and estimates believe that this growth will be seen in the near future as well. The BPO industry is responsible for providing the second highest no. of jobs and it is expected that the BPO market is expected to cross an astonishing 400 billion by 2020. From being a paltry 7 billion industry in 2006 to cross a staggering 400 billion by 2020.
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In the future, companies will ensure that backhand tasks are handled by professional outsourcing service providers. Due to this BPO is also going to be an attractive option for small and medium-sized businesses
Conclusion
The above article covers everything you need to know about BPO. The article gives us a brief on everything including what is BPO and its full form, the difference between BPO and call center, advantages of BPO, different types of outsourcing, and the future of the BPO industry.
