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BPO is Gaining Steam: Here's Everything You Need to Know

by Kitty Tan

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Business process outsourcing (known as BPO in short), is a business practice in which a company subcontracts its business-related operations to a third-party vendor. It is a process where many companies are turning to, either because they want to focus on their core operations or that they are trying to cut costs. Typically when for the latter, organisations will outsource a non-core function to a vendor who has a way to carry out the same task for less. 

This process used to only apply solely to manufacturing firms, such as the carbonated sweet drink manufacturers where they would outsource a large segment of their logistics. However, in recent years, this model has evolved and is now applicable to services outsourcing as well. 

Breaking Down Business Process Outsourcing

Businesses from small startups to large companies choose to outsource their processes as fresher innovative services are increasingly accessible in today’s highly competitive and fluctuating business climate. 

Generally speaking, companies typically adopt the BPO application in the back office and front office. Back office outsourcing refers to a company handing over its core business operations such as payment processing, accounting and quality assurance to external professionals who will ensure that the business operates accordingly. Contrary to that, the front office BPO takes on tasks that usually include customer-related services such as sales, marketing, and tech support. 

Types of BPO

BPO can be divided into three groups based on the geographic locations of the providers and you can achieve process optimization and success by utilizing the three groups simultaneously: 

  • Onshore BPO

As known as domestic outsourcing, onshore vendors operate within the same geographic vicinity as the contractor. It may be countries, city, and even state. In our case, Singapore. For example, a company in Dallas, Texas could outsource a vendor located in Seattle, Washington (different states). 

  • Offshore BPO 

Pretty straight-forward, these vendors reside outside of the contractor’s home country. For example, a Singapore company may choose to outsource to Mumbai, India. As India is still a developing country, their salaries are significantly cheaper and hence, it is very cost-cutting.

  • Nearshore BPO
     

They are vendors in countries that are located near the contractor’s country. For example, a Singapore company may choose to outsource to a company based in neighbouring Malaysia. 

 

Benefits of Contracting to a BPO Company

To assist you through this decision-making process, here are the top five reasons why you should outsource your business processes to a specialist. 

1. It reduces the costs of your company

BPO cuts down costs for in-house labour, especially so for training and staffing. Read the article on Recruitment Process Outsourcing over here. Top BPO companies strive to constantly enhance processes by removing redundant steps and decreasing spending. Quality BPO vendors deliver exceptional quality by streamlining your non-core business function for you, thereby reducing the costs for your organisation. Wherever possible, vendors can even leverage on markers where it is cheaper to bring your organisation even more savings.  

2. It allows you to focus on your business

When you hand over a non-core process of your company such as payroll services, barcode labels, etc. to a vendor, it allows you to put all your focus on your company’s core competencies. Also, why invest in expensive facilities and equipment to support the business process when you can outsource? You might think that it is a wise investment for now. But in the long run, would your company be able to sustain this asset investment in the long run? 

3. You have access to the latest technological resources

When you choose to outsource, it means that your business will be kept abreast with the latest technology and innovation without you having to lift a finger. These guys will do it for you. The right strategic BPO vendor will keep up with the latest business innovations and practices to deliver the best service with the aim of improving your processes over the duration of your contract. Simply put, the vendors would invest in these cutting-edge technologies and your company will reap the benefits the innovation can bring without having your company to fork out a cent to invest in such technologies. 

4. You can reassign resources

Think of some of the spaces you have dedicated to your customer service, IT support accounting department and all the storage space meant for documents. Now imagine how your business would go on and the money you can save by shifting over to an outsourcing vendor? By reassigning your resources, it has the ability to boost your score and generate profits for your business exponentially.

5. You can expand your company globally

If one of the goals of your company is to expand globally, then BPO could be a viable option for you. Say you are trying to enter the Japanese market, you are going to have a tough time getting started because you cannot just simply import your Singaporean sales team. These are two very different cultures and languages. Even if you were to send an employee who is fluent in that language to start a regional department, he or she may also not be well acquainted with how the new market works. Hence, it is advisable for you to only source for a native company since they are familiar with the cultural and native language used in the business.

Now, we understand that the worth of BPO goes above and beyond cost reduction and it also gives rise to a myriad of benefits when utilized appropriately. The most important factor of all would be its ability to allow you to focus on your core competencies. There are also different kinds of processes you can choose from depending on the needs of your company. The key here is to find the right provider to outsource your business processes to. The company should be an expert at what they do and they should also possess the integrity to not take advantage of the control they have over your business. 

 


BGC Group is an international manpower outsourcing and recruitment agency that can help clients deliver robust human capital solutions. We are adept at identifying your business needs and are efficient in providing you with customized solutions to effectively manage your HR pipeline from start to finish. Trusted by the Singapore government as the #1 government outsourcing recruitment agency, we've got an awesome track record to show and you can trust that your business is in good hands. 

Find out more and talk to us! 

 

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