Business Process Outsourcing (BPO) is the go-to strategy for accessing valuable skills in the new world of work. With businesses constantly seeking ways to streamline operations, BPO involves delegating non-core business functions to an external service provider, allowing companies to focus on their core competencies while increasing efficiency and profitability.
Read on to explore the various types of BPO available, the differences between BPO and a call center (it’s more than just a simple distinction), and the steps for engaging the right BPO partner.
What are the different types of BPO?
Several types of BPO services are available to suit different business requirements, each serving a specific set of functions. Let’s explore the six primary types of BPO:
1. Back-Office Outsourcing
Back-office outsourcing is all about handling the essential support services of a business. This category includes administrative tasks, billing and payment processing, record keeping, and data entry. Outsourcing these tasks to a BPO provider frees the company to focus on its core competencies, such as sales and marketing.
2. Front-Office Outsourcing
Front-office outsourcing deals with customer-facing functions such as sales, technical support, and customer service. Outsourcing these tasks ensures that customers receive top-quality service, allowing businesses to focus on their core competencies.
3. Knowledge Process Outsourcing
Knowledge process outsourcing (KPO) is for businesses that need to outsource knowledge-intensive processes such as research and development, data analytics, and market research. KPO providers are staffed with experts who provide companies with the knowledge and expertise they need to stay competitive.
4. Legal Process Outsourcing
Legal process outsourcing (LPO) deals with outsourcing legal services such as document review, contract management, and legal research. By outsourcing these tasks to an LPO provider, businesses can reduce legal costs while meeting their legal needs.
5. Research And Development Outsourcing
Research and development (R&D) outsourcing is for businesses that need to outsource R&D processes such as product design, testing, and prototyping. Outsourcing these processes reduces R&D costs and provides access to the expertise of highly skilled professionals.
6. IT Outsourcing
IT outsourcing involves outsourcing IT functions such as software development, infrastructure management, and technical support. By outsourcing these tasks, businesses can ensure their IT needs are met while reducing costs and focusing on their core competencies.
How is BPO different from a call center?
As previously mentioned, BPO encompasses a wide range of outsourced functions. At the same time, a call center is a specific type of front-office BPO. Understanding the differences between BPO and a call center is essential to decide which aspects of your business to outsource. Let’s break down these differences in the table below –
BPO | CALL CENTERS | |
DEFINITION | A strategy involves delegating non-core business functions to an external service provider that can handle many tasks beyond just taking calls. | A centralized location where customer interactions such as calls, emails, and chats are handled |
FUNCTIONS | Can perform back-office functions such as accounting, HR, payroll processing, front-office tasks like customer service, sales, and marketing, as well as specialized functions like legal process outsourcing, research and development outsourcing, and IT outsourcing | Focused on customer service and handling high volumes of customer inquiries and complaints |
SCOPE AND COMPLEXITY | Typically broader and more specialized | More limited in scope and complexity |
COST SAVINGS & OPERATIONAL EFFICIENCIES | Can provide cost savings and operational efficiencies | It can also provide cost savings and operational efficiencies but may be more limited in terms of scope |
TECHNOLOGY & EXPERTISE | Often have more advanced technology and expertise in process optimization | May not have the same level of technology and expertise in process optimization |
How to choose a BPO company
It is crucial to have a careful vetting process to ensure that you find the right BPO partner. After all, if you’re entrusting parts of your business to a BPO provider, you should expect cost savings, increased operational efficiency, global reach, and improved customer satisfaction. To help you make the right decision, here are some recommended steps to follow—
Step 1: Identify Your Business Needs and Requirements
Consider cost savings, operational efficiency, global reach, and customer satisfaction.
Determine which business areas could benefit from outsourcing to a BPO provider.
Step 2: Research Potential BPO Providers
Look for providers with a proven track record.
Consider providers with experience in your industry.
Read customer reviews and case studies.
Step 3: Assess Capabilities and Resources
Evaluate the technology and infrastructure of each provider.
Assess expertise in process optimization.
Step 4: Evaluate Cost Structure and Pricing Models
Consider upfront costs, ongoing costs, and any potential hidden fees.
Determine the pricing model that best suits your business needs.
Step 5: Determine the Level of Support and Communication
Look for providers who offer regular reporting and proactive communication.
Ensure that the provider has a dedicated point of contact.
Step 6: Consider Cultural Fit
Look for providers who share your company’s values.
Determine if the provider can work collaboratively with your team.
Step 7: Select the BPO Provider
Choose the provider that best meets your business needs and requirements.
Negotiate the terms of the contract, including performance metrics and service level agreements.
Step 8: Monitor Performance and Provide Feedback
Continuously evaluate the relationship to ensure it fits your business well.
Provide regular feedback to ensure that the provider is meeting your expectations.
Conclusion
BPO has revolutionized businesses and has become a game-changer in today’s competitive world. With the ability to streamline operations, reduce costs, and access specialized skills, companies can focus on their core strengths and gain a competitive edge. By following the recommended steps for choosing the right BPO partner, businesses can tap into the immense potential of BPO and enjoy long-term benefits.
