Business process outsourcing (BPO), sometimes also known as business process re-engineering, is an act wherein a third-party private service provider is hired to perform one or more business activities in a specific company. The third party is also responsible for taking care of all operations related to that business function. In other words, the entire process is outsourced. This article will mainly discuss the various types of BPO that are commonly found in the corporate world.
The most common outsourcing BPO is the human resources outsourcing. This refers to hiring a professional, usually a temporary employee, to perform the tasks that are related to payroll, accounting, and other core business functions. The temporary employee may be assigned to work on a full time or part time basis. In order for this to be legal, it needs to be stated that the primary business function being outsourced is for a different function. This is one of the best BPO techniques used to cut down on costs and improve efficiency.
Another popular technique used for business process outsourcing is the third-party contract. Here, a contract is entered between the outsourcing company and the target organization that need the functionality. The contract contains detailed instructions and specifications on the tasks that are to be performed. The contract also mentions the payment terms, delivery schedules, and other details. Third-party contract outsources are mostly done by experienced professionals because they are the ones who have the ability and experience to handle the various tasks and operations required for these companies.
Popular ways of conducting Business Process Outsourcing
On the other hand, free consulting is another common form of business process outsourcing. Here, the outsourcing firm provides free consulting to the target organization. During the consultations, the consultant from the outsourced company would meet and conduct free analysis with the target company. From here, the free consulting firm would be able to see if the target company is able to handle the requirements being presented to it. Once the issues are solved, the outsourced company would provide the completed products and services to the organization.
Another popular way of conducting business process outsourcing is through the use of third-party platforms like Facebook, Twitter, LinkedIn, and others. Through these social media platforms, entrepreneurs and other business owners can engage with their target customers directly. This is very effective especially for those offering online services or financial services. Businesses engaged in social media marketing can build up a strong customer base and generate leads by targeting individuals based on demographics. Some even integrate social media marketing and call center services to increase productivity and profits.
Some people would wonder why many companies do not avail of business process outsourcing. In short, it costs less and is more convenient. Since the company does not have to create a separate department just to handle the task, the overhead cost will be reduced. It also means that the personnel in the in-house workforce will be staying and working in their own office. Thus, they will be free from the pressure of performing poorly in their jobs as well as meeting deadlines. Aside from that, it can significantly lower operational costs since the services being offered by the third-party provider will not need to be purchased from the company owner or his employees.
Call center outsourcing is another way of using third-party providers for business process outsourcing. A lot of business owners prefer to outsource their customer service activities like call centers because they can enjoy a better quality results that they cannot get from in-house call centers. Many outsourcing providers offer excellent customer service training to their clients. They are also familiar with different marketing strategies that businesses can use to boost sales and minimize costs. By employing call centers outside the company's own office, entrepreneurs can also reduce their dependence on high-level personnel.
Lastly, many companies have discovered that it can actually save money if they engage the help of third-party providers to perform their non-primary business activities like inventory, customer service, and payroll. It is now possible for outsourced service providers to help these companies achieve their set goals. By using business process outsourcing, you can effectively lessen the amount of human resource requirements within your organization. Indeed, these outsourcing activities are very helpful especially when it comes to handling your non-strategic and core business activities such as customer service, payroll processing, accounting, and information technology.