What is Business Process Outsourcing?

Business process outsourcing (BPO) refers to hiring a third-party provider to complete business tasks. Almost every business function can get outsourced and does. 

Businesses of all sizes utilize business process operations to gain a competitive advantage by improving efficiency and increasing productivity while reducing costs. It’s simple, pass specific business functions or tasks off to the BPO provider, and they complete the work for you. It’s a pretty awesome concept. 

Types of Business Process Operations

While every business function can get outsourced to a third party, there are three main types of business process operations which are:

• Front office or primary process 
• Back office or secondary process 
• Management process 

The type of business process operations you hire depends on your business needs and the tasks you’re looking to outsource. Business process operations offer specialized services under one of the three categories and some provider services under all three.

Let’s break it down and look at some of the different services under each type of business process operation.

What Are Front Office BPOs?

1. Sales BPO
2. Customer support BPO
3. Production BPO
4. Tech support BPO
5. Marketing BPO

Sales BPO

Every business is fueled by revenue. Sales is an essential business process that brings in money. The sales function requires skills and strategic planning to maximize each lead to net the most revenue. Running a successful sales department is a full-time job that requires a lot of workforce that come at a high expense.

Many businesses outsource their sales department to a third party with a team of experienced experts to get the job done successfully. After all, sales are one of the most important functions in a business because there is no business without the revenue generated from sales. 

Customer Support BPO

Customer service and support are essential in business. Some business leaders don’t truly understand the level of importance of providing exceptional customer support. However, many sharp entrepreneurs and CEOs know delivering excellent customer service is what will give them a competitive advantage, so they choose to outsource it to the pros. 

Business process outsourcing providers who specialize in first-class services can help businesses scale by satisfying their customer’s needs and growing a following of happy and loyal customers. Without a dedicated team to provide customer support, a business will eventually fail.

Customer service is often looked at as an expense rather than a revenue-producing business function. However, providing outstanding customer support retains customers who will return to purchase again, refer others, and write favorable online reviews for the world to see. So, customer service is essentially a revenue production task when done right. 

Large Fortune 100 companies to small start-ups outsource to business process operations to tackle the important job of servicing customers. There’s an art and science behind delivering excellent customer service. It takes time, resources, technology, and workforce, so many business leaders outsource customer service to business process operations specializing in this critical function. 

Production BPO

Producing quality products is essential for a business to keep the lights on and the revenue coming in. Since production often involves specialized equipment and manual labor, many companies outsource. 

The company designs and crafts the product’s features then turns it over to a third-party manufacturing facility to tackle the production work. 

Tech Support BPO

Tech support is a business function many businesses need today. We live in a world surrounded by technology, and many business operations revolve around it. Ecommerce, NFT, and subscription companies are all ones where customers often need tech support. 

Tech support requires a specific skill set to handle successfully, which is why many business leaders utilize business process outsourcing providers to tackle the job. A BPO company has the expertise on staff to effectively provide the support customers need. 

Marketing BPO

Marketing and advertising is a complex business function that is ever-evolving. It requires a team of experts to strategically implement the best strategies to get the brand in front of the target audience with an attractive and positive image. Without the proper time and attention on marketing and advertising, a business can fail quickly. 

Marketing and advertising efforts are often outsourced to third-party BPO providers with the experience and knowledge to get the most out of the allocated marketing budget. Maximizing the return on investment is the benefit of putting the essential function in the hands of the pros. 

What Are Back office BPOs?

1. Accounting BPO
2. Information technology BPO
3. Human resources BPO
4. Data entity BPO

Accounting BPO

Accounting work is tedious and time-consuming, but a company never really knows where they stand financially without it. Maintaining the books, accounts payable, and accounts receivable is a lot of work to stay on top of, but it’s essential for the smooth running of a business. 

BPO providers that offer accounting services have experienced professionals on staff to handle the job. Outsourced accounting providers have the software and processes to streamline the critical tasks to make them seamless and almost effortless for a business. 

Information Technology BPO

It takes a lot on the back end to ensure all the technology used within an office stays up to date and runs properly. IT also involves website and software development which requires a specific skill set that can be costly to have on staff full-time. Outsourcing IT to a BPO provider gives businesses access to the level of expertise needed to handle all of their tech projects at an affordable rate.

Human Resources BPO

Human resources involve much more than hiring and firing. It includes employee laws, training, taxes, insurance, benefits, and regulatory issues. Human resources BPO handles the management of everything on behalf of the company. 

Start-up or small businesses may not have the need yet for a human resource department. Larger companies with many employees need a dedicated person or team on the essential function.

A human resources BPO provider develops and implements programs that improve processes and increase the business's efficiency and happiness and employees. They ensure employees feel valued and supported to retain them.

Data Entity BPO

Data entry is a time-consuming and tedious job that often gets outsourced to a BPO provider. Many companies would rather not bog down their staff with the mundane task, but it’s essential to get it completed for the smooth running of the business.

Some businesses have contact data entry tasks. To stay organized and keep things organized, they must enter orders and customer information, update product details, and manage spreadsheets. Outsourcing data entry projects to a BPO provider allows companies to pass the torch on this time-killing task so their internal staff can focus on more crucial business functions. 

Management Processes BPO

Management processes BPO is a little different than front or back-office BPO as it doesn’t typically involve any tangible item. This type of BPO includes supporting a business by providing a variety of management processes, including:

• Analyzing daily activities 
• Creating and implementing changes for business improvement 
• Improving efficiency 
• Creating effective strategies for growth
• Developing innovative products 
• Building brand awareness and creating marketing strategies 
• Department expansion

Basically, BPO management processes help businesses live up to their best potential by improving what they’re currently doing. Experts take strategic planning to know what to look for and the best practices to implement. 

3 Different types of Business Process Operations by Location

Once you decide hiring a BPO provider is right for your business, you’ll then have another decision to make: where to outsource. There are three different types of business process operations by location: 

• Onshore
• Nearshore
• Offshore

Let’s go over each of them and what makes them unique.

Onshore BPO

Onshore outsourcing refers to hiring a third-party company within the same country as your business. There’s not much of a time difference when onshore outsourcing. For example, if your business is in New York and you hire a BPO provider in California, you only have a 3-hour difference.

Language barriers are not an issue since everyone speaks fluent English. Onshore BPO providers are typically the most costly to outsource work since they have high labor and overhead expenses.

Nearshore BPO

Nearshore outsourcing is when you hire a third-party company that is not in the same country but shares a border. For example, if your business is in California and you outsource work to a BPO provider in Mexico. 

The time difference isn’t normally substantial when nearshore outsourcing, but it could be a few hours or more. Sometimes there is a language barrier when outsourcing to another country. A successful working relationship needs to ensure you outsource to a company with good English verbal and written communication skills.

Nearshore outsourcing is commonly less costly than onshore outsourcing. You’ll want to weigh the pros and cons before deciding onshore or nearshore. 

Offshore BPO

Offshore outsourcing is hiring another company in a country far from you to complete work for your business. For example, if your company is in New York and you hire a BPO provider in the Philippians.

There’s typically a substantial time difference when offshore outsourcing. When hiring a BPO provider offshore, you must nail down communication times and methods to avoid any troubles contacting them. 

There are often language barriers when hiring a BPO provider in another country. You must ensure to choose a BPO provider that speaks and writes fluently in English, so there are not any miscommunication issues. 

Offshore outsourcing often provides the biggest cost savings when hiring a BPO provider. Since many other countries have a lower cost of living, salaries, and overhead costs, business process operations offer their services at a lower rate than onshore or nearshore providers. 

Conclusion

There are a few types of business process operations to choose from. You must weigh all of your options and hire the right BPO that fits your needs. A BPO provider acts as an extension of your business by completing essential functions for you. But you must work with one with the experience and expertise to handle the same job your company wants to outsource. 

To get the most out of your outsourcing business relationship, ensure to choose a provider that has excellent communication and can scale as needed. You’ll want to hire a provider you can trust to get the job done successfully and on time, every time without fail. Your business is on the line, so your outsourcing partnership must be a success. 

Are you ready to jump on the bandwagon to reap the sweet benefits of outsourcing to a BPO? If so, contact Awesome CX today!  

Sources:

Outsourcing Can Do Much More Than Just Cut Costs | Forbes 

Managing Human Resources | HBR

Outsourcing | American Express