It is undeniable that the popularity of Business Process Outsourcing (BPO) has increased over the past decade. Now, businesses feel safer and more confident they can achieve their targeted goals with the help of third-party servicing agencies. It is nearly impossible to find a jack-of-all-trades business person, which means it is extremely hard to find an entrepreneur who expertly knows every aspect of business management. Entrepreneurs across the globe are actively making optimal use of business process outsourcing options to fulfill various internal and external business needs, including managing payroll, Human Resource (HR), accounting, bookkeeping, or Client Relationship Management (CRM).
What Is Business Process Outsourcing?
In simplest terms, BPO is the delegation of a specific business task(s) to a third-party service provider. From managing HR-related activities to bookkeeping, BPO covers almost each and every aspect of the business. It can be a blessing for most small to medium-scale enterprises because BPO helps you seek ways to adapt and stay competitive. However, BPO is not simply for small businesses but is a prominent practice among corporations and large-scale enterprises as well. Outsourcing some activities to a third-party service provider with expertise in handling core business operations helps you save time, money, and resources.
Business process outsourcing is usually divided into two major categories: back-office outsourcing and front-office outsourcing. Back-office outsourcing includes internal business operations such as procuring, purchasing, or billing, and front-office outsourcing includes customer-related services and support. Therefore, companies need to decide which type of services they hope to acquire from a suitable third-party services provider. However, it is important to recognize that the climate of outsourcing may be facing a paradigm shift by either promoting itself or facing demotion, which signifies that the market is proactive and able to generate a great amount of activity.
Why Business Process Outsourcing?
A set of people with superior expertise and knowledge usually offers the market a wide range of business management-related activities that help organizations focus more on core areas of the business while simultaneously allowing them to focus on other areas of business. 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 aspect of the business. Their solution is to outsource some of the daily functions and activities to outside agencies, thereby cutting costs and improving process efficiency. However, several pros and cons related to BPO are briefly explained below.
Business Process Outsourcing Pros
As businesses tend to remain more focused on innovation and staying competitive and productive, outsourcing is a wonderful option. Acquiring the services of experienced and well-qualified individuals or agencies can help you increase your organization’s overall productivity. This will allow you more time to focus more on managing core business affairs and can even increase credibility or customer confidence in your company.
Cost-saving is probably the second most important benefit of outsourcing. Hiring in-house teams to manage HR, accounting, marketing, and financing can be difficult. Thus, outsourcing a portion of these business activities to outside companies can help you save money and efficiently use company resources. Additionally, you can save on technology and infrastructure, which means you will not need to build standard facilities or purchase equipment to accomplish those tasks. In short, choosing the right business process to outsource can help you achieve intended outcomes at a reasonable price.
Business Process Outsourcing Cons
Outsourcing means sharing sensitive information or data to third-party service providers. This may cause companies a great deal of stress if their data is misused in any way. Therefore, it is vital to find credible agencies that can accomplish your crucial business tasks safely and reliably.
To avoid hidden costs such as legal expenses, you must ensure that everything is detailed in the agreement with the outsourced party and the agreement is readily signed by both parties involved. Choosing an outsourcing partner that you can trust will help you avoid financial surprises and a damaged reputation.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 platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO 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.