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What is Business Process Outsourcing?

It has become difficult for companies to hire more people to handle various processes in today’s day and age. So companies started looking for measures to avoid the hassle of hiring more human resources. Major Companies decided that an independent service provider should manage their operations and responsibilities for a particular business process. 

This is when BPOs come into the picture. Business Process Outsourcing, aka BPO, is when a company hires a third-party company to manage its processes. People often confuse BPO with Call Center. When in reality, Call Centres are just one type of Business Process Outsourcing. The outsourced process can be anything; Customer Support, Administration, Payroll, etc.

BPOs are also called ITES (information technology-enabled services), which means that they usually rely on technology/infrastructure that enables external companies to perform their roles efficiently. 

However, all of this is just a little gist of it all. Business Process Outsourcing is a field and a topic that begs you to explore it. There are so many layers to it. So, let’s have a look at what it is all about. 

What is Business Process Outsourcing?

Like we said before, in different words, business process outsourcing is mainly contracting a company to carry out some particular business functions from your company. It can be anything from marketing to customer support.

You must not confuse business process outsourcing services for merely outsourcing, though. This is because when you are business process outsourcing, you are outsourcing everything involved in the particular business process. When you are just outsourcing, you are outsourcing just a single type of job. More and more companies these days are inclined towards business process outsourcing and for all the right reasons. 

What are the benefits of Business Process Outsourcing? 

Business Process Outsourcing is being popularized everywhere, which means that there must be some benefits to it. Now that we know what Business Process Outsourcing is, it is time to understand what kind of benefit it provides. After all, when it comes to running a business, the first that you need to look at is whether it will profit your business or not. Let’s have a look at them. 

  • Helps by reducing costs

If you look closely, you will find that specific processes cost you a fortune if you hire people in your country and get all the required equipment. This problem is taken care of with business process outsourcing. Choosing a foreign company that is comparatively cheap for this expensive process of yours will help you cut down on your business costs. Also, you’ll save up a lot on your taxes. 

  • Helps in focusing on core tasks 

If your company is new, you can’t be bothered to excel in every single department. Specific sectors can go unnoticed, and it’s not your fault. Options for business process outsourcing can help you concentrate better on the core functions of your company. All of this happens while some of your processes are being taken care of by the hired company. 

  • Provides improved support 

It goes without saying that when you are taking the route of business process outsourcing, you will have an organization helping you with specific business processes of your company. It will translate to improved support. Everyone needs it. 

  • Can help in global expansion 

Business process outsourcing is mostly done with a foreign company. This gives you a golden opportunity to enter foreign markets. You will have overcome the language barrier and will have made contacts that you can rely on. 

What are the risks involved in Business Process Outsourcing? 

As helpful as Business Process Outsourcing can be, there can be some big-scale risks that are avoided or overlooked and could cause considerable problems in the future. The best thing to do in such a case is to plan in detail and have foresight. Here are the common risks that you may have to face with Business Process Outsourcing: 

  • Chances of hidden costs

Business process outsourcing can be cheaper later on, but you will have to spend a lot of time finding the right company. Time is money these days. This way, you will be facing some hidden costs. 

  • Wastage of time

A considerable amount of time goes behind finding the right business process outsourcing company, as we said earlier. You might not have that kind of time in hand. 

  • Dependency on a foreign company 

It goes without saying that business process outsourcing is all about joining hands with a foreign company. There is very little chance of you knowing them. So, if something goes wrong, you can’t do much about it. 

  • Issues regarding communication

Interacting with your foreign business process outsourcing company might not be the easiest thing to do—the language barrier to blame. There might even be issues and misunderstandings because of cultural differences. 

  • Security risks

Handing over your precious data about your company to a foreign organization is not the safest idea ever. It comes with its risks. You have to think about it all before you go ahead with BPO companies. 

All of this information should be enough to give you a basic understanding of Business Process Outsourcing. It is an ocean of knowledge and opportunities from which you will always have something to learn. 

Conclusion

Business Process Outsourcing is a great business tool that helps lessen the burden of a company. The business can instead focus on more important duties such as expansion, product development, marketing, and so on. Business Process Outsourcing is also cost-effective, as compared to in-house services.

Alongside, in the case of Business Process Outsourcing, you get your job done from a professional who has an ample amount of experience in the field. However, seeing how everything has two sides, it is possible for Business Process Outsourcing to have adverse effects.

However, with proper planning and attention to detail, such risks and negative impacts could be avoided and turned into an opportunity. Therefore, with consideration of this article, make the ultimate use of Business Process Outsourcing with proper planning and foresight.

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Subrata Das

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