Business Process Outsourcing: Its Forms, Benefits and Challenges

Advantages Of Outsourcing
Advantages Of Outsourcing
Business Process Outsourcing
Business Process Outsourcing

BPO is an outsourcing branch. More formally known as business process outsourcing, it is a practice involving contracting out one company’s functions to another. BPO can be categorized into front office and back office outsourcing. The latter includes functions like accounting, human resource or finance. The former involves customer services like call/contact center solutions.

The BPO process is predetermined and proven, and its executor should confirm that every procedure is put into effect consistently and effectively, wherever it is situated.

Types of BPO

There are various BPO types that offer different services, which include the following.

Data Entry

The BPO companies offer offline entry of data, like creating documents and updating business data, or the online entry that includes updating web data, databases and catalogues.

Call Center Outsourcing

The BPOs get inbound calls from customers or make outbound calls for marketing, and they even serve the role of a technical support center.

Financial Outsourcing

These BPOs give services associated with accounting, financial analysis and accounting.

Healthcare Outsourcing

These specialize in medical billing, medical coding and making medical transcripts.

Engineering Outsourcing

This form of BPO gives a wide variety of solutions in the mechanical field, the structure or the civil field.

Advantages of BPO

Some of the main benefits of business process outsourcing are as follows.

Higher Margins of Profit

The biggest benefit of contracting out your activities to another company is that the latter will have human assets available at low salaries. In other words, by outsourcing your processes, you avail that third-party’s staff, and you can cut down your own payroll.

Better Focus on Core Business

With most non-primary tasks out of your way, you can afford to relax and pay more attention to your core areas of operation.

Access to Up-to-Date Technology

Small and midsized businesses are not able to pay for the latest programs’ licensed version, so they outsource tasks to companies with access to these applications. This also presents SMBs with a financial benefit in that they will not have to invest in the said form of software.

The Main Challenges in the BPO Sector

The biggest challenge of BPO is high staff turnover. In other words, in this area of business, people come and go from time to time, and only the committed ones stay at one place for a long time. The main reason for the high churn rate is that after they learn everything, BOP work gets rather monotonous for people.

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