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What is BPO, and What Are the Pros and Cons?

Posted by Clarissa Gotsch on Oct 25, 2017

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So what is BPO exactly? BPO or Business Process Outsourcing, is a way of contracting out business-related operations to a third party. The term was originally associated with manufacturing firms that outsourced parts of its supply chain such as Coca Cola, but it now encompasses many sectors of business. 

BPO also includes call center outsourcing. Here are 4 Reasons You Need to consider Call Center Outsourcing. 

Modern BPO can be segmented into three areas: (1) Back-office outsourcing, which includes HR, finance, data entry and accounting, (2) Front-office outsourcing, which includes customer service, sales, and market research, and (3) Global industry services such as travel, telecom and media. 

Organizations that decide to outsource part of their business process do so because they don't have a large enough labor force in some sections, it's cheaper, or they just need the time to focus on more critical parts of their business. For companies considering BPO as an option for their own company, they should take into consideration both the pros and cons of BPO:

THE GOOD

What is BPO, and What Are the Pros and Cons?

1. Higher efficiency

The workforce is trained and skilled in focus areas, so they aren't having to multitask. Plus, they have greater access to professional training and expertise. 

What is BPO, and What Are the Pros and Cons?

2. Cost and time effective

Saves the company who is outsourcing on infrastructure and technology, and resources related to staffing and training. This is usually the primary benefit for businesses who decide to outsource. 

What is BPO, and What Are the Pros and Cons?

3. More flexible

BPO companies can quickly gain access to the right resources - whether technology or otherwise, to easily grow with your company and meet changing business demands. 

THE BAD

What is BPO, and What Are the Pros and Cons?

1. Loss of fine control

Employees are not as accessible as in-house employees, making it more difficult to maintain an level of quality if the third party does not hold the same standards. For some, this may cause communication issues that delay project completion. 

What is BPO, and What Are the Pros and Cons?

2. Lower than expected savings 

If the third party is poorly staffed or managed, or not the right fit for the company, the cost savings might not be as high as first imagined, and customer dissatisfaction is a possibility. 

What is BPO, and What Are the Pros and Cons?

3. Information security 

Data theft or security breach of information can be an issue for companies without a secure information security policy in place.

CONCLUSION

Outsourcing should be considered part of a companies planning and budgeting process. When used for the right reasons, and with the right third party vendor, outsourcing can have long-term value for both the companies and the clients that they serve.   

Call Center Outsourcing Flowchart to help you make a decision

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