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Reasons Why Companies Opt to Outsource Business Processes

There are new trends that keep emerging in the business world, due to which it has become very dynamic by nature. Every type of business has to grow, and increase its returns. Business process outsourcing is one of the most affordable ways by which a business can be run. BPO is the process of outsourcing the operations of a specific business unit to a third party service provider.

BPO can be divided into two categories – back office outsourcing and front office outsourcing. Back office outsourcing involves internal business functions such as accounting, payroll, human resources and finance whereas front office outsourcing involves customer related services, like contact center services.

If the business is outsourced outside the country of the company, then it is known as offshore outsourcing and if the business is outsourced to a neighboring country, then it is known as near shore outsourcing.

Taking up business process outsourcing services does not mean cutting down on the business, but is in fact adding to it. It brings about changes in the current processes, so as to make them work more efficiently and faster while at the same time keeping in mind the cost effectiveness. BPOs increase the flexibility of a company in many ways.

Mentioned below are some of the services that a BPO can provide-

  • Technical support services
  • Book keeping and accounting
  • Customer support services
  • Telemarketing services
  • Insurance services
  • Document scanning
  • Web research

There are many advantages in outsourcing to a BPO company. It leaves the employees of the company less burdened with mundane tasks, leaving them with more time to concentrate on core business activities.

Here are some advantages-

  • Focus of the company can be improved
  • The operating cost can be reduced and controlled
  • Access to the latest technologies
  • More time at hand to pursue the company’s goals
  • Maximum and efficient utilization of the resources
  • Skilled and efficient workforce
  • There is improvement in the productivity

Human resources, finance, accounting, data entry, billing, and software development are some of the departments for which companies prefer to utilize outsourced services from BPO firms.

Human Resources: Most companies need the services of HR, which include duties such as hiring employees, drafting contracts and implementing new procedures. All this is very time-consuming and labor intensive. So it’s a practical option to outsource these duties.

Finance: This is one of the most important departments in a company and all its processes need to be followed in an efficient, error-free manner. The finance team can work on more important matters if the day-to-day running is outsourced.

Software Development: This is being outsourced on a very large scale. The reason for this is that growing economies like Asia have a high literacy rate and the cost of labor is also low. So it becomes cheaper to offshore to such countries.

Call centers: Certain products are cheaper to sell over the phone. This pulls down the selling and the marketing cost of the product. Furthermore, when it is off-shored to developing economies where the cost of labor is considerably lower, the overall cost can be further reduced.

Outsourcing these jobs to reliable service providers ensures better service at a lower cost. The core company is not responsible for the benefits of the employees from the outsourcing firms. This largely reduces their overheads, as they do not have to take the responsibility of paying benefits to the employees. Lower head count of employees means lesser overheads. The major bulk of work is forwarded to the business process outsourcing units.

Thus we can conclude on the note that business process outsourcing is a valuable tool for every business and is extremely useful for an organization to grow on a large scale.

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