BPO is the deepest form of outsourcing, involving close interaction between the customer and the service provider (outsourcer). In contrast to task outsourcing, which involves outsourcing individual projects with limited time and budget, business process outsourcing can have no time constraints and no fixed budget. Under BPO, the organization outsources not just individual tasks, but a closed functional area within its business.
In general terms, it is clear: the supplier is built into the customer’s management system, taking responsibility for the implementation of an entire business process. Resources involved in the process may belong to anyone: the same vendor, the customer, or third parties. Not all, of course: apparently, the resources that manage the process (first of all, the process manager) must belong to the supplier.
According to Statista, leading vendors in the global BPO market in 2018, by revenue:
Automatic Data Processing (ADP) – 12 985
FIS – 6 882
Conduent – 5 393
First Data – 5 214
Accenture – 5 094
Teleperformance – 4 552
Broadridge – 4 318
TSYS – 4 028
Capita – 3 534
Paychex – 3 454
This statistic shows 2018 data. It reveals who were the top providers in the worldwide Business Process Outsourcing (BPO) market in terms of revenue. The market leader that year was Automatic Data Processing (ADP) with revenues of slightly less than $13 billion.
These days, more and more entrepreneurs are adopting innovative business approaches. Now the business process outsourcing (BPO) market is valued at about $135.5 billion in terms of revenue. It is projected to grow by 1.9% this year, based on the latest data.
Business Process Outsourcing (BPO) is a service by which a provider takes responsibility for managing and optimizing a customer’s business process. BPO assumes “removal” of the completed fragments of the business and transfer of their support to another company that has a sufficient number of qualified professionals and appropriate resources to support “someone else’s” business process. Outsourcing can include, for example, payroll or personnel search and recruitment. These services are provided by BPO companies. At BPO companies, clients are served by experienced international outsourcing experts.
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Business Process Outsourcing or BPO is the outsourcing of any segment/process/function of a business organization to a third-party organization. The main reason for outsourcing business processes is to reduce costs and maximize efficiency. The emphasis is on the process, meaning the process is predetermined and the vendor must ensure consistency and performance in the assigned processes. The different types of BPO are explained below:
- On-coast BPO: outsourcing commercial activities to another company but in the same country.
- Offshore BPO: outsourcing business operations to a company located in a neighboring country.
- Offshore BPO: outsourcing the business activities of a company located abroad.
BPOs typically fall into two categories based on services:
- Back-office functions: organizations that outsource various back-office functions or back-office functions, such as payroll, accounting, human resources, quality control (quality assurance) to third-party providers.
- Front office functions: organizations that outsource customer service providers, such as technical support, marketing.
A BPO is able to handle both external and internal operations of a facility. The BPO provides many services such as:
- Client service
- Technical assistance
- Human resources (staff recruitment and selection, teaching and deployment, payment processing, etc.)
- Financial and accounting-related services.
- Website maintenance services
Benefits of BPO
- Higher efficiency
- Lower expenses
- Concentrate on the primary task only
- Top-skilled workers
- Improved outreach of resources
- Cost savings for infrastructure.
According to Deloitte’s 2016 report, businesses most often outsource IT processes, legal tasks, real estate and facilities management, tax reporting, human resources, financial and procurement issues. And the outsourcing market is growing every year, barring a dip in 2013 and 2016. Last year, the global market was $88.9 billion.
Although Deloitte made a report based on a survey of companies with billions in turnover, outsourcing BPO services are now available not only to large firms but also to small businesses. It’s not about freelance accountants at all. Outsourcing companies are ready to support small and medium businesses.
Why Do We Need BPO?
The majority of large companies and businesses have opted for BPO for a variety of individual reasons. Every entrepreneur and businessman has his own view. The primary reason for them all is to thrive and extend their business with reduced costs overhead and concentrate only on their primary goal, BPO has greatly assisted them in this. Considering the above benefits of BPO such as higher efficiency, lower expenses, concentrating on the primary task only, top-skilled workers, improved outreach of resources, cost savings for infrastructure, etc. more organizations are choosing to outsource business operations. Outsourcing helps entrepreneurs in absolutely all spheres of our life. For example, in the manufacturing industry, the production of large products is done in-house, while marketing, textiles, retail, and machine testing are outsourced. Plus, outsourcing strengthens the business of both companies. A company that outsources gets a lot of benefits in the form of getting the work done well and on time. And the outsourcing company begins to make more money as it gets a new customer. Thus, the business chain increases and improves.
If the aspiring businessman is not a financial expert and not at the same time a lawyer, human resources specialist, and analyst, it will be difficult to cope with all these roles. That is why it is better to do as the American economist Peter Drucker bequeathed: do what you do best and outsource the rest.
Even a small restaurant can now afford to outsource. You can outsource all business processes and fiddle with bureaucracy. And the owner only has to deal with the things for which he opened the business.
Financial and business outsourcing is often seen as a way to optimize current costs. Deloitte research shows that the main reason for outsourcing is the need to reduce accounting costs. This was the response of 70% of respondents.However, if previously outsourcing of accounting was seen purely from the point of view of cost savings for in-house accounting services, now outsourcing is being used to achieve a competitive advantage, to reduce financial risks. Most importantly, outsourced accounting allows business owners to focus on the business. BPO professionals can help with all management problems. If you hire a BPO team that knows their job, your business will thrive.