Know all about Business Process Outsourcing

 Know all about Business Process Outsourcing

Outsourcing is a business practice which is used by companies for the reduction of costs or improving efficiency by shifting operations, tasks processes or jobs to an external contracted third party for a significant period of time. Functions that are contracted out can be performed third party either offsite or onsite of the business.

Many firms these days can easily employ an outsourcing strategy for emphasizing on important aspects of the business. When you are outsourcing some less important activities can improve streamlining, efficiency and productivity because there are other firms that perform smaller tasks better than the firm itself. This is the strategy which can lead to faster turnaround times and increased competitive advantage within an industry and it helps in cutting operational costs. There are many businesses which can reduce labor costs in a significant manner by outsourcing some tasks whereas other companies can also have access to technology without the need of investing a large amount of money for owning the technology.

Business process outsourcing is the contracting of non-primary business functions and activities to a third-party provider. BPO services include human resources, payroll, call center and accounting relations. BPO is also known as information technology enabled services (ITES).

BPO process company outsourcing is important for saving time and cost from some parts of Asia especially Vietnam. There are following categories of BPO services:

Horizontal BPO

Horizontal BPO includes function centric outsourcing. This vendor specializes in carrying out specific functions across many types of different industry domains. Common examples of horizontal BPO include payroll processing, facilities, HR and similar functions. Automatic Data Processing is an important example of horizontal BPO vendor.

Vertical BPO

Vertical BPO always focuses on the provision of functional services in only some of the industry domains. Financial services, manufacturing, health care and retail are the nice example of vertical BPO domains.

Categories of BPO services

There are two important categories of BPO outsourcing services which are divided into back office and front office outsourcing. Back office outsourcing includes internal business functions including purchasing or billing and front office outsourcing includes customer-related services such as tech support or marketing.

Back office outsourcing invites other organizations to manage important functions such as data entry, data management, and payroll, accounting and quality assurance tasks. Back office outsourcing helps in strengthening the important core business processes of organization which helps the company to run smoothly.

On the other hand, front office outsourcing is linked with the customer interactions. It includes making calls, emails, tax and many other forms of communications with customers. Front sourcing outsourcing providers list includes telemarketing, customer service, inbound and outbound sales, market search and appointment scheduling.

BPO that is outsourced outside the own country is sometimes known as offshore outsourcing. BPO that is outsourced to the neighboring country of the company is sometimes known as near shore outsourcing and BPO that is contracted within the own country of a company is known as onshore outsourcing. BPO Process Company outsourcing can be used by any reliable outsourcing company which provides much-needed services to the companies who require it.

Advantages of Business Process outsourcing

Here are some of the important advantages of business process outsourcing:

Enhanced profit margins

Outsourcing is never driven by cost as it is the only reason for doing so, there is still a cost benefit present to the seen. Partners are skilled in a specific area and it can work at the high-efficiency level, by eliminating redundancy and reducing the costs of doing business.

Improved products

A firm can focus more on the continual innovation and improvement of all its products and it has made it successful in the first place.

Improved supply planning process

The relationship of expert partners throughout the supply chain can source different materials cheaply and quickly to help different companies in decreasing their complexity, inbound material cost and lead time. There are some partners which provide procurement and factory feed processes for the simplification of an inbound material supply chain.

Enhanced inventor

If you have an expert partner who is managing your all your payments, shipments, supply partner and inventory forecasting and supply partner activities you can always expect that supply chain will always speed up, by make sure that inventory and demand match in a consistent way by helping to give products in consumers hands.

Improved Logistics

By using advanced transportation management tools, there are many expert vendors who can automate the workflow and business rules of a company for getting consumers to consumers in a reliable, cost-effective, secure and quick manner.

Disadvantages of Business process

It is very important to dwell on the potential disadvantages of BPO services before outsourcing any type of work. Here is a list of some of the important disadvantages of BPO services:

Hidden costs

Though outsourcing is always considered cost-effective there are always some hidden costs. You should make sure that before signing any type of document.

Slow turnaround time

There is a single BPO company which associates itself with different organizations at one time. There are many BPO services providers who never concentrate on the tasks assigned to them. It will lead to slow turnaround times and poor quality.

Risk of exposing confidential data

No matter how much guarantee is given by BPO companies there is always an increased risk of exposing any type of confidential data which is mainly linked with recruitment, payroll, account services and payroll.

Fewer chances of getting desired results

It is always difficult to get the final expected outcome if the right BPO provider is not selected. There may be some issues that are linked with linguistic variations, classification responsibilities. Outsourcing always leads to control loss.