Business process outsourcing (BPO) is the contracting of specific business processes to a third-party provider. This can include areas such as customer service, human resources, information technology, and accounting. BPO allows businesses to focus on their core competencies while outsourcing non-core processes to a specialist provider. As a valued way to solve both traditional and modern market complexities, BPO can provide a flexible array of services and alternatives for restructuring, processing, and operating essential business tasks.
Business Process Outsourcing call centers help to efficiently handle inbound/outbound customer calls and shifting tech operations to lower-cost markets to reduce labor expenses. Contemporary BPO companies have grown into strategic partners for various industries by sourcing high-tech infrastructures and blending them with human intelligence. BPO contact center services have transformed over the years, with modern customer service outsourcing now including virtual agents. This shows how BPO is continually evolving to deliver the best possible strategic outcomes for customers and companies. Business process outsourcing is an important strategic addition to any company's operations. By outsourcing certain business functions, companies can improve efficiency, reduce costs, and focus on their core competencies. BPO services can include a wide range of functions, such as customer service, IT, human resources, accounting, and legal.
AI Virtual agents provide an added, intelligent layer of customer service to your customer’s experience. These virtual agents are able to field, triage and even manage customer inquiries, freeing up human agents to manage more complex tasks. The addition of virtual agents to BPO offerings shows how BPO is continually evolving to deliver the best possible strategic outcomes for customers and companies.
A good business process service can help you better serve your customers and outperform your competitors by combining skilled agents, AI-powered technologies, tailored training programs, and a seamless transition framework. Accelerating business growth in today’s post-pandemic world requires ongoing innovation to deliver real-time business value. Business process outsourcing is a strategic way to meet today's business goals.
While business process outsourcing is making enterprise operations more agile and intelligent, business leaders and enterprise executives may still be skeptical about data, security, and service quality. But these concerns and fears are misguided. digital transformation and business process outsourcing provides an exceptional opportunity to redesign processes digitally using data, technology, and skills, and can mitigate even the smallest chance of data breaches.
Selected and implemented effectively, Business process outsourcing saves companies money and time. It also allows companies to focus on their core competencies.
There are three key reasons why business process outsourcing is becoming more popular.
Business process outsourcing has some disadvantages.
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Outsourcing and offshoring business processes is a rapidly developing industry and adding new tasks for various industries along the way. Based on services executed for an organization or vertical, there are four main BPO categories:
There’s more than one way to outsource, so you can choose the ideal outsourcing strategy for your business—one that will help you improve customer service to boost satisfaction and fuel exceptional growth. Analyzing the available outsourcing strategies will help you realize that each approach offers a unique value proposition around culture, cost, and operational aspects.
Onshore outsourcing refers to outsourcing in your brand’s homeland and employing labor under the contact center’s payroll. Keeping operations in the same country can be an ideal set up, especially for industry verticals such as services and government organizations, which can avoid cross-border transactions. Customer problems may be solved more easily when a local call center agent is handling interactions. Plus, onshore BPOs are familiar with the culture, language, and may even be using the same products and services as your customers.
Hiring third-party employees in the same country also helps to create new jobs, boosting the economy. Privacy and sensitive data can be handled carefully, especially for financial and government centers. Your outsourcing partner can take over end-to-end management of the entire process, which reduces cost and helps the business focus on new segments. Revenue boosting functions, such as sales, generally prefer onshore because agents are geographically and culturally aligned to customers.
This is when you choose to run your contact center overseas, in a country where agents with similar skills can provide the same service quality while significantly cutting costs. Customer operations are shifted offshore, specifically to lower-cost regions like LATAM and South Asian countries. These regions have established a solid base for contact center operations with the help of a diverse talent pool and lower labor costs.
In the past few years, offshore operations have leveled-up with onshore interaction excellence and shown tremendous growth with elevated workforce management, technology, and new-age training. If you’re concerned about the quality of CX performance in offshore centers, be selective about what you move offshore. Start with a smaller business segment and see how your customers react first.
Nearshore outsourcing strikes a happy medium between onshore and offshore outsourcing. Nearshore business process outsourcing is where you outsource to contact centers in a neighboring country, who have similar cultural attributes and understanding when it comes to CX.
Nearshore outsourcing offers two valuable benefits—you get the language and cultural behavior of the home brand with the costing benefits of an offshore market. For example, some countries neighboring the United States and Australia have a lower cost of living, so hiring high-volume customer service talent from these places can help to optimize operational costs. You still need to choose the outsourced business segment wisely and use a phased approach by moving a small segment first. Keep a close eye on how effective the nearshore centers are and track CSAT and NPS scores to evaluate outcomes.
This leading retailer successfully combined offshore and nearshore outsourcing strategies. They expanded their chat program, ramped up the number of agents, and looked to BPO to provide agents for voice as well as digital. The retailer expanded its chat services to Canada and deployed nearshore voice agents in Colombia to reduce costs and improve performance.
Although WFH agents have ranked as the most prioritized beyond-the-shore outsourcing strategy in a Covid-driven world, many industries were using them long before the pandemic. The remote work model eliminates the cost of office space and saves in-class training costs by providing highly-digitized, interactive, and economic virtual training.
In addition to cost-optimization benefits, WFH models also help your company reach a larger and more diverse talent pool with zero geographical challenges. Agents are more experienced, skilled, and have the perfect cultural etiquette for best-in-class customer interactions. Start by identifying which challenged business process you want to outsource, and your BPO partner will handle the operational strategies to boost customer satisfaction and agent retention. If you’re concerned about security and data breaches, choose a partner who provides a work-at-home security tech stack for agent monitoring, hires from a pre-vetted talent pool, and handles end-to-end transactions to mitigate risks.
If you’re not ready to offload key tasks but want to reduce costs and hand off management of some tasks to an external contact center, you can still lower costs for various segments by working with strategic partners. When you have outsourcing partners streamline services per your company’s needs, that’s call managed services. Your BPO partner will take on everything—from recruitment, training, and leadership development, to workforce management and success monitoring. Managed services provide value in key areas including access to a pre-vetted contingent workforce and working knowledge of CX best practices. Start by pinpointing a particular business need to offer the managed services team. Following careful observation and trials, you can gradually hand over additional segments.
In a modern world, BPO offers a number of intelligent operation solutions to bridge the gap between your brand and your customers and help you level up with competitors. With industries sourcing BPO providers in healthcare, financial services, energy and utilities, retail and e-commerce, telecom, automotive, and many others entering the outsourcing world, business process service vendors have shown tremendous growth, leading to the addition of multiple subspecialties:
This outsourcing model blends a general BPO process structure with information technology (IT). IT is a service delivery mechanism carried electronically over the internet, and has become a vital variant of outsourcing. At times, ITES BPO can also require support from telecommunication and data networks. For example, an outsourced IT helpdesk isn’t completely internet-based—the service provider manages service requests through calls and emails, accesses the company's network, and remotely views employee systems through sourced software, so they can solve every glitch efficiently.
the business process outsourcing of knowledge-intensive activities, most often from Western companies to companies in India and the Philippines. KPO is a subset of business process outsourcing (BPO). Whereas BPO generally refers to the outsourcing of transactional activities, such as call center operations, KPO generally refers to the outsourcing of activities that are more knowledge-intensive, such as legal research, software development, and pharmaceutical research. The advantage of this type of business process outsourcing is that it can often lead to a significant cost savings for the company. In addition, it can also result in a higher quality of work, as the workers in the offshore location are often more highly skilled than workers in the company's home country.
The KPO vendor’s onboarded market researchers and strategic mentors use high-tech data analytics to bring operational excellence and efficiency. KPO prevails in accounting and financial services and engineering design and development.
This type of Business process outsourcing is offshore outsourcing within the legal sector. It includes the offshore provision of services such as contract review, legal research, due diligence, compliance, and document management. The LPO industry has grown rapidly in recent years, as law firms and corporate legal departments seek to reduce costs. India is a leading destination for LPO, with a large pool of qualified professionals and low labor costs. Other destinations for LPO include the Philippines, South Africa, and Canada. Businesses are choosing LPOs because they can take on large, complex projects and have a proven track record of quality and cost efficiencies. Outsourcing also enables businesses to access legal expertise that may not be available in-house.
We have already discussed some high-level reasons outsourcing is a good idea. Now, let’s dig deeper into the true power a BPO can provide your business.
If you outsource your business or even a segment of your business, the outsource company will cover the cost of maintaining competitive technologies, including software and communication tools. The business process outsourcing provider will pull that cost by providing similar services to multiple clients. Agents, technology, and analytics work together to reduce support costs by driving efficiency and effectiveness. AI-empowered agents get more work done by simplifying conversations, preventing customer frustration, and boosting customer satisfaction. This helps streamline operations to reduce average handle time (AHT). Customer service outsourcing firms serving major industry verticals like banking and financial services, retail, healthcare, and telecom, provide best-in-class practices for handling compliance, risk management, and data security. With increasing concerns over data breach, cyber theft, and hacking, BPO ensures the implementation of high-tech technologies to mitigate even the most negligible risk. As a result, BPO-offered technologies can save you the cost of hiring a safety and security team that checks security processes in your company.
BPO owns hiring teams, including talent acquisition professionals specializing in various industries, in-house training teams equipped with productive technologies, and other teams exclusively overseeing workforce management and employee experience. Outsourcing your business to a BPO provider puts you at the leading edge in terms of high-skilled talent. Plus, you don’t need to worry about the high cost per hire because staff augmentation services are rolled into the outsourcing package. BPOs can help you execute a performance management plan by taking care of the end-to-end employee lifecycle for anyone hired under their payroll—which also saves you valuable time.
For firms of any size, BPO can be an excellent solution for allocating resources more efficiently when it comes to staffing and outsourced projects. Even smaller companies can benefit from budget flexibility by onboarding on-demand, highly-experienced experts at a reduced cost. Modern BPOs have elevated work-at-home performance management to the next level. From virtual recruitment to face recognition, we’ve figured out the best ways to support remote work and put them into practice with built-in compliance systems—prevent impersonation, on-the-job digital media browsing or use of writing materials, and unauthorized presence or location changes.
Companies really do tend to level up when they decide to outsource non-critical business to a BPO service provider. Outsourcing allows you to maintain a strategic focus on core competencies, business criticalities, and competitive gains more effectively. Steadily adapt and advance within your market by handing over operations to professionals who manage employee productivity and experience, implement tools and technologies, boost sales, and above all, share your burden and responsibilities. Today’s CX challenges require modern, innovative solutions. From multinational giants to small start-ups, every enterprise wants to onboard the best BPO partner. As customer demands and preferences evolve, a BPO offers the best contact center solutions to help you stay relevant and competitive across key industries, even in a pandemic-affected market.
Expanding your reach and creating a new customer base across borders is great for business, but it has its challenges. National laws and unfamiliar cultural or regional barriers will be your biggest roadblock. Partnering with a BPO vendor can help you expand faster, as a nearshore/offshore provider will already be familiar with the language, your target audience’s cultural norms, and the local market. Outsourcing also helps with geobalancing—intelligently distributing work traffic (services, sales, or support) across resources in multiple locations.
Outsourcing allows you to optimally distribute resources across sites, matching needs with requirements for the best possible performance. Outsourcing can also help you deliver on diversity initiatives and meet corporate goals with creative strategies built by a multicultural workforce. Reach a larger talent pool not just by global expansion but also through the work-at-home agent models that BPOs implement—allowing you to hire from even the most remote places. Get the very best talent from the BPO’s recruitment database to help you overcome language barriers and understand customer needs in new lands. Avoid time zone concerns with contact center agents who work across multiple zones.
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Most companies outsource non-core business functions so they can focus on strategic goals. This doesn’t mean that outsourced processes are insignificant or non-essential—it would be impossible to thrive without them. Since the pandemic, industries have outsourced almost everything to reduce labor costs, office space needs, and tech infrastructure. Nevertheless, outsourcing IT and software development ranked as the number one business process for BPO services, followed by customer service, sales operations, data management, and digital marketing. The table below shows the key reasons cited for onboarding BPO vendors for each process.
| Information Technology | Customer Service | Sales Operations | Data Managment | Digital Marketing |
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Starting from entry-level tasks and small business segments, BPOs are efficiently running a number of processes for financial, healthcare, telecom, hospitality, and retail organizations, and will evolve into even more industries soon. Call center operations have been one of the most economical solutions and the BPO industry is now growing to execute more niche, high-tech, strategic, and demanding pandemic-driven tasks. BPO growth stems from three vital market needs—agility, connectivity, and cost containment. Artificial intelligence (AI) is transforming how contact centers operate by using predictive analytics to anticipate customer needs, giving real-time feedback on caller responses, and lowering operating costs by reducing call staff headcounts.
Best-in-class BPO companies offer customer service outsourcing solutions along with conversational AI, messaging, and voice solutions that can boost customer satisfaction and improve cost efficiency. BPOs using AI technology can significantly improve the customer experience, too. You can empower agents to send personalized content across a range of mobile devices using static and dynamic Active Cards. In a nutshell, artificial AI is changing the BPO industry by providing machine learning that can automate and optimize BPO processes. AI, machine learning, and robotics are poised to revolutionize BPO by making tasks more accurate, efficient, environmentally friendly, and cost-efficient.
Aligning to a brand’s DNA with a strategic approach, find how [24]7.ai is leading as a BPO solution provider by redefining AI, human insight, and deep vertical expertise to produce personalized, satisfying customer experiences across all channels. Contact us today.
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