The popularity of business process outsourcing (BPO) has increased over the past decade or so. Businesses are now feeling safer and are more confident to achieve their targeted goals with the help of third-party servicing agencies. Entrepreneurs across the globe are making optimal use of several business process outsourcing options for fulfilling various internal and external needs of their businesses. These are things such as managing payroll, human resources (HR), accounting, bookkeeping, or handling clients.
What Is Business Process Outsourcing?
In simplest terms, it is the delegation of a specific business task(s) to a third-party service provider. From managing HR-related activities to bookkeeping — it covers almost every aspect of the business. It is a blessing for most small to medium-scale enterprises because it helps you seek ways to adapt and stay competitive. BPO is a common practice among corporations and large-scale enterprises as well. Outsourcing some activities to a third-party service provider that has expertise in handling core business operations helps you save a lot of time, money, and resources.
Business process outsourcing is usually divided into two major categories that include back-office outsourcing and front-office outsourcing. Back-office outsourcing includes internal business operations such as procuring, purchasing, or billing. Front office outsourcing includes customer-related services and support. Therefore, companies need to decide on which type of services they hope to acquire from a suitable third-party services provider.
Why Business Process Outsourcing?
A set of people with superior expertise and knowledge offer the market a huge range of business management-related activities that help organizations focus more on the core areas of the business, simultaneously allowing them to care less about other business areas. Companies outsource their redundant internal processing tasks to third-party service providers with specialized knowledge in their respective fields.
Moreover, most organizations around the globe cannot afford to hire in-house teams to manage each and everything. What they do is outsource some of the functions and activities to outsource players to cut HR and other costs and improve efficiency in the processes. However, there are several pros and cons related to BPO that are briefly explained below.
Business Process Outsourcing Pros
As businesses tend to remain more focused on bringing innovation, staying competitive and productive, outsourcing is a great way to achieve all these things. Acquiring the services of experienced and well-qualified individuals or agencies can help you increase your organization’s overall productivity. This will allow you to focus more on managing core business affairs as you will have more time for that.
Cost-saving is probably the second most important benefit of outsourcing. Hiring in-house teams for managing HR, accounting, marketing, financing, and, hence, everything in an organization is tough. Thus, outsourcing some portion of such activities to outside players can help you save a lot of money. Plus, you also save on technology and infrastructure, which means you will not need to build standard facilities or purchase equipment for getting things done. In short, choosing the right business process outsourcing can help you achieve intended outcomes at a reasonable price.
Business Process Outsourcing Cons
Outsourcing means sharing sensitive information or data with third-party service providers. This may cause companies a great deal of stress if their data gets misused in some way. Therefore, you must always find credible agencies for getting your crucial business tasks done.
To avoid hidden costs, such as legal expenses, you must ensure that everything is spelled out in the agreement and signed readily by both parties involved. Choosing an outsourcing partner that you can trust will help prevent financial surprises.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.