What is Business Process Outsourcing?

BPOs are enterprises that help bigger organizations manage their processes efficiently. Often BPOs are companies that help other big companies develop a set of capabilities. On the contrary, BPOs’ services are also used to reduce load. BPOs take away the pressure of repetitive processes and allow enterprises to focus on their core services or products.

A BPO is generally located in countries with affordable talent pool with capabilities to operate 24X7 and cater to multiple needs of a client that includes customer support, document management, payment processing, lead generation, and hiring and payroll management.

In the early years of its inception, BPOs catered mainly to telecoms and travel companies but in the contemporary world, it is helping e-commerce, Fintech, Healthcare, and even governments run their processes efficiently.

What Are The Popular BPO Trends?

BPO services have always been about speed, responsiveness, understanding concerns of a lead, and offering competitive rates to win clients. While cost-effectiveness is the most highlighted USP of BPOs but outsourcing has helped businesses streamline hay wired processes, it has shaped the customer experience for many brands and also added to the overall efficiency of an organization.

Operations, peripheral activities, and contact centers will be the most outsourced processes in the coming years. 2020 will start a new era of outsourcing where both BPOs and enterprises will rely on different metrics for measuring efficiency and success.

  • Omnichannel Approach For Higher Client Retention : With quality customer experience becoming a standard instead of being a key metric, the focus of enterprises will shift to offering an omnichannel experience. With customers relying on multiple devices to interact with businesses, offering omnichannel experience will lead to better customer satisfaction and also increase customer retention. BPOs from around the world are gearing up with the requisite technology and training to help organizations offer similar experience across all platforms and devices. Tailored Outsourcing: With the entry of new players like the Philippines, the competition in the BPO sector has stiffened. More and more agencies are evolving themselves to suit the growing needs of an organization. While some enterprises continue to train their employees on the latest technology, out of box thinkers are customizing their services as per the growing needs of enterprises. Sectors like E-commerce and Fintech are growing rampantly.
  • Businesses Will Go Data-Driven : The power of analytics when harnessed properly can help businesses control churn rate, increase customer loyalty, and also drive referral sales. In the coming years, BPOs will also analyze user data to offer a better customer experience. BPOs are lining up to adopt analytics environment because customer experience is now a key decision influencer.
  • Social Media As A Customer Service Channel : BPOs will play a crucial role in helping organizations offer quality customer support on Facebook, Twitter, and WhatsApp. Unlike contact centers, enterprises can rely on social media channels for handling more than one customer at a time and improving their customer satisfaction scores.
  • AI-Powered Voice Response : When leveraged efficiently, Artificial Intelligence will work like a bridge between data collected from various channels like social media, calls, emails, and chats. When analyzed together, data from varied sources will reveal every pattern a particular customer follows assisting with better customer service.
  • Cloud-Based Services Will Make Every Business Global : The growing demand for quality customer experience and omnichannel experience turns cloud-based storage into a necessity. By transferring all customer-related data in the cloud, enterprises will make it easier for BPOs to analyze the data and decipher customer expectations.
  • Up Skilling : With multiple BPOs evolving to suit the needs of growing organizations and offering tailored outsourcing services, others will also be coaxed to upskill. In the coming times, BPOs of all sizes will start investing in training their professionals. Any agency that resists change or denies to evolve with time will go obsolete.

Some Interesting BPO Statistics

In 2018, the global BPO industry was valued at $85.6 billion, which rose to $92.5 billion in 2019. The BPO industry is rising again after the debacle of 2015 when the valuation dipped to $88.9 billion from $104.6 billion. The emergence of new players like the Philippines has strengthened the belief of business-owners in outsourcing.

  • 59% of companies see outsourcing as a cost-cutting tool.
  • Banks are willing to outsource 40% of help desks positions for better efficiency in customer service.
  • Organizations saved up to 18% compared to other businesses by outsourcing payroll management processes.
  • 37% of companies are outsourcing Accounting processes.
  • 31% of organizations witnessed a rise in service quality with outsourcing.
  • 74% of IT Companies outsource their processes.
  • 85% of outsourcing jobs originate from the USA.
  • 80% of businesses globally are positive about their relationship with their outsourcing partner.
  • In 2017, Africa, Middle-East, and Europe together spent over $55 billion on outsourcing.

Things to Consider Before Leveraging Business Process Outsourcing

1. Develop A Clear Set Of Goals And Objectives

This goal is especially important because outsourcing may produce a variety of benefits, some of which may be of marginal interest to particular institutions. Outsourcing also raises several practical and philosophical issues. Both the advantages and disadvantages should be reviewed as concise sets of goals and objectives are developed.

2. Review Options With Stakeholders And Secure Buy-in

Outsourcing can have a major impact on key parts of the institution’s community—including staff, employees, and key stakeholders. To protect the community’s diverse interests, the enterprises should consult with stakeholders to develop outsourcing plans that will be supported as widely as possible. Although the consultation is important in the process, quality consultation ensures that all objectives are fulfilled and met. It is important to establish a quarterly review to ensure efficiency and accountability.

3. Feasibility of Outsourcing

To check the feasibility of outsourcing, it is very important to know the answer to the following questions

  • What is the scope of outsourcing in your industry?
  • What may be reasons to outsource? What will be the benefits?
  • Which functions can be outsourced? What may be the problems and issues?
  • What may be the process and extent of outsourcing?
  • What will be the client-vendor relationship?

Common Business Processes Organizations Outsource

Marketing

Search engine optimization and social media marketing require nuanced effort, which involves incessant monitoring of budget, ranking, and impressions. By outsourcing the marketing process to the industry experts, the CISCO subsidiary tapped into the subject matter expertise of Gabriel Sales and doubled its clientele.

04_High-Ticket-Processes-That-Businesses-Outsource

Document Processing and Verification

The onboarding process for e-commerce, Fintech, and EdTech is tough and requires document processing and verification. By letting professionals who have handled document verification for Fintech and Online Aggregators, EdTech start-ups can ensure no legal hassles going forward.

Seller Onboarding

Seller onboarding service providers often rely on competitor benchmarking for identifying sellers with multiple products. The first step towards finding the right seller involves identifying products that are popular but missing on the platform. Relying on search queries made by customers can prove to be beneficial in identifying products that are missing.

CX Consulting

Outsourcing CX Consultancy to players with proven expertise, organizations can offer incomparable experience and control churn rate. An intrinsic system with the least number of silos can create an experience that enamors the audience and brings them back again and again.

Customer Surveys

The outsourcing market is overflowing with organizations that can conduct customer surveys and reveal hidden data that can simplify product development. With enough information related to customer expectations, developers can create a product that is ready for mass adoption.

Debt Management

Just like traditional banks, Fintech organizations can also outsource debt management to offshoring experts and use the saved time and resources on strengthening their brand value.

Catalog Management 

Outsourcing catalog management to a BPO with proven expertise will help e-commerce players create a quality buying experience. Catalog management covers catalog creation, content writing, and content upgrades.

Cyber Security Needs

Cyber Security Needs Outsourcing cybersecurity to organizations with proven expertise can usher the digital enterprises into the next level, where they are invincible. Here’s how outsourcing cybersecurity requirements will help: A comprehensive cybersecurity provider will ensure compliance management at all times

  • Discover and exploit loopholes to ensure robust data security
  • Identify and restrict malwares from executing and bringing the system down
  • Protect against attacks like DDoS, which render servers useless
  • Protect against card hacks by fulfilling PCI DSS requirements

Content Management

Organizations can either outsource their entire content production processes, which includes both content preparation and then a presentation, or simply outsource content preparation and then get it presented for video recordings by their in-house faculties.

How Companies Can Benefit From Outsourcing?

Every organization is made up of processes that are repetitive and of processes that require innovation. While innovation requires a defined skill & mindset but repetitive processes can be handed to centers that have trained employees to carry out these tasks.

  • Increases Focus on Core Processes : Executives and other leaders can use their available free time to focus on business planning and taking the organization forward. Outsourcing data analysis and dashboard creation to subject matter experts help them streamline their days and find time to focus on work that matters.
  • Impacts Downline Positively : 59% of companies from around the world use outsourcing as a tool to cut overall business costs. By reducing the input cost, outsourcing automatically impacts the profits generated. On the other hand, leveraged subject matter expertise of outsourcing partners helps the organization offer better support, improve accuracy, and generate more leads, which reflects positively on the balance sheet.
  • Amplifies Efficiency & Sets Responsibility : Letting industry experts handle your bookings and reservations leaves you with enough time to focus on important tasks adding up to your overall efficiency. Lesser the distraction better the chances of creating quality content or products.

    Also, outsourcing organizations share performance reports at regular intervals, which establishes a much-required sense of responsibility among peers.

  • Increases Focus on Core Processes : Executives and other leaders can use their available free time to focus on business planning and taking the organization forward. Outsourcing data analysis and dashboard creation to subject matter experts help them streamline their days and find time to focus on work that matters.x
  • Impacts Downline Positively : 59% of companies from around the world use outsourcing as a tool to cut overall business costs. By reducing the input cost, outsourcing automatically impacts the profits generated. On the other hand, leveraged subject matter expertise of outsourcing partners helps the organization offer better support, improve accuracy, and generate more leads, which reflects positively on the balance sheet.
  • Amplifies Efficiency & Sets Responsibility : Letting industry experts handle your bookings and reservations leaves you with enough time to focus on important tasks adding up to your overall efficiency. Lesser the distraction better the chances of creating quality content or products.

    Also, outsourcing organizations share performance reports at regular intervals, which establishes a much-required sense of responsibility among peers.

Business Process Outsourcing in Healthcare

By 2024, the Healthcare industry will be outsourcing projects worth $105.60 billion. The expenditure on outsourcing is expected to grow at a CAGR of 7.5%. Technological advancements have introduced a disruption that is irreparable for established organizations. To develop the requisite capabilities, prominent enterprises are now leaning on outsourcing.

The healthcare industry is expected to witness a surge in outsourcing opportunities because Fintech and E-commerce players are changing the dynamics. With online order, payment, and delivery of medicines and other requisite medical equipment, traditional players are under great pressure to cope up. To build technical arms that can cater to millennials, healthcare agencies must leverage the power of outsourcing.

Healthcare players also understand the risk of starting everything from scratch hence they are relying on partners who have a proven track record. With outsourcing healthcare players will benefit the following ways:

  • Helps traditional players adapt to the changing dynamics of the market
  • Offers genuine insight into challenges and road ahead
  • Leverages latest technology and methodologies to simplify the transition
  • Generates enough confidence in the key-stakeholders to pursue change

Disadvantages Of Business Process Outsourcing

Business Process Outsourcing brings agility, efficiency, and cost-effectiveness to organizations but it takes away the control. Organizations are often required to rely on third-parties for day to day updates.

BPOs help organizations scale and achieve efficiency but there are some drawbacks too. A lot of key stakeholders feel that onboarding a BPO leads to lack of control on the processes. In other news, BPOs have misused the opportunity to grow by not ensuring proper data security.

Major Disadvantages Of Business Process Outsourcing

  • Lack of Uniqueness

    Well! Trends like tailored outsourcing are picking pace but outsourcing companies continue to cater to multiple enterprises with the same old paradigm. Such practices take away advantages from companies. All organizations follow the same pattern for product acquisition or customer service leaves no opportunity for standing out.

  • Hacking Hazards

    A good number of outsourcing agencies are not working in compliance with varied agencies. Failing to furnish ISO Compliance  and PCI DSS Compliance can land both outsourcing partners and the primary organization in trouble and this is perhaps one of the biggest disadvantages of outsourcing processes.

  • Diverse Company Culture

    Organizations often find that the work culture followed at third-party outsourcing agencies are more about work and less about employee well-being. Bigger enterprises see this as a gap that can impact productivity. Often enterprises are willing to outsource processes meanwhile trying to build an in-house team.

Is Business Process Outsourcing Secure?

In 2020, the average cost of a data breach has reached a $3.5 million mark. Also in a recent study, it was revealed that 90% of businesses that faced data-breach were shut down within six months of a breach. Only a handful of businesses with trusted backup were able to survive the breach.

Data breach, unauthorized access, internal sabotage, DDoS attack, and Credential Stuffing are some of the latest weapons of hackers. People are trying to garner benefits by gaining illicit access to the databases.

Business Process Outsourcing is Safe When

  • Organizations involved have requisite ISO Family certifications
  • Companies have successfully fulfilled 12 requirements of PCI DSS
  • All parties involved are adhering by secure coding practices
  • Employees are trained to ensure data privacy of customers
  • Processes are designed to safeguard the interest of customers
  • Organizations prioritize Business Continuity Plan as an integral step

Popular Start-ups that Outsourced Processes for Growth

Start-ups with deep pockets and start-ups that are surviving on seed fund, all of them are leveraging outsourcing capabilities of proven BPOs to grow fast. Here are some of the known start-ups that leveraged outsourcing for growth:

Skype

It was valued at $2.5 billion when eBay acquired it. Skype was started as a simple idea and then built into a full-fledged peer-to-peer messaging network with the help of outsourcing. While start-up founders are willing to do everything on their own, Skype founder was courageous to outsource the main website development task.

AppSumo

The founders outsourced the development of the platform and started making the company cash positive by putting up ads for $50.

Slack

A leading instant messaging app for workplaces outsourced its app design and marketing and benefited immensely from it.

The most leading enterprises like Staff.com and Skype have relied heavily on outsourcing to make a platform that went viral. The latest breed of start-ups can take a cue from these success stories and start leveraging outsourcing as a tool to grow big faster.

Common Concerns Related to Business Process Outsourcing

Data Breach

  • Data security concerns have got companies to rethink their decision of outsourcing.
  • 68% of companies are facing issues with BPOs when trying to upgrade to cloud-infrastructure.
  • 35% of organizations are always anxious about the data shared with the outsourcing agencies.
  • Even with all the concerns, 44% of chief intelligence officers are willing to collaborate and share data with outsourcing agencies.

Compliance Failure

Today business process outsourcing organizations are catering to the growing needs of Fintech and E-commerce players. These industries work with the direct involvement of customers’ credit cards, which puts BPOs under the limelight. Organizations that are capable of handling such immensely important data safely only makes up for valid partners. BPOs are yet to come par with the required security standards but the evolution is happening.

Why India for Outsourcing?

India has ruled the outsourcing landscape for quite some time now, the emergence of new players like the Philippines and African countries has impacted India’s revenue but India continues to be the favorite choice for outsourcing back-office operations.

India is still the preferred choice of global organizations for processes back-office requirements because

  • Diverse Pool of Talent

    It is easier to find engineers, customer support agents, content writers, KYC executive, and market survey guys in India that too in bulk. The huge population with an impressive amount of literacy packaged with skill development programs makes India the favorite for processing operations that requires additional expertise.

  • Affordable

    The huge population has coaxed organizations into keeping their prices low, which supports frugal living in India. Organizations that are required to pay $1500 in the US can get the same work done in India by paying as low as $500.

  • Government Subsidies

    To make India an attractive FDI destination, the government here is taking measures to make help businesses run smoothly. By offering subsidiary in tax and additional support for building infrastructure, the government is ensuring that India continues to rule the outsourcing landscape.

Business Process Outsourcing Companies in India

India continues to be the most attractive outsourcing and offshoring destination. The availability of talent pool and facilitative infrastructure makes it easier for companies from around the world to outsource their processes to India and get requisite work done with compromising on quality.

Top BPOs in India are

India is the leading outsourcing destination because it has several organizations that are constantly innovating, upgrading, and upscaling to suit the needs of varied global enterprises. Here’s a list of most popular BPOs from India:

Why the Philippines for Outsourcing?

The Philippines is challenging India for its position of favorite outsourcing destination and its command over the customer support domain is a threat to other outsourcing countries as well. Here’s why the Philippines is turning into the favorite country for outsourcing.

  • Affordable English Speaking Population

    Hiring European nationals for customer support is expensive but the Philippines offers a similar pool of English speaking population at an incomparable price. The affordable pool of English speaking population is attracting organizations that require customer support for countries like the US, UK, and Europe.

  • Technology Dominance

    The Philippines is spending plenty of resources and manpower on developing new technologies. The availability of English speaking population combined with state-of-the-art technology makes it easier for organizations to select them as their preferred outsourcing partner. BPOs are playing a crucial role in shaping the technology, by understanding the problems of customers meticulously, they are willing to offer technological solutions.

  • Safe From Malpractices

    In other outsourcing destinations, organizations have been fooled and duped. With the Philippines, the cases of such fraud and malpractices are very low and it is perhaps one of the biggest decision influencers. Availability of talented pool, backed by technology, and then ethics have turned the Philippines into a haven for organizations willing to outsource.

Business Process Outsourcing Companies in the Philippines

The Philippines is leaving no stone unturned in attracting all kinds of outsourcing projects. The country has successfully established itself as the first preference for customer support services. Here are the leading BPOs from the Philippines:

India v/s Philippines : The Best Outsourcing Destination
An Infographic

 

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