Complete Guide To The Types Of BPO Business Process Outsourcing
In business, outsourcing – as well as offshoring – are common ways for companies to get more done. And while outsourcing can cover any number of services, a closely-related option is known as business process outsourcing or what’s known as BPO.
The human resources field is no stranger to BPO. While there are business process outsourcing companies, some HR companies, or HR consultancies, today offer BPO services alongside their other HR outsourcing services.
But let’s start at the beginning, what is business process outsourcing? What are the benefits of business process outsourcing? And what types of BPO services are there?
We’ll answer all of these questions – and more – in this article.
What is business process outsourcing?
Business process outsourcing (BPO) is the process of delegating or subcontracting one or more of your business process needs to a third party or BPO vendor.
Originally, BPO was used by large manufacturers that outsourced segments in their supply chain. However, the business process outsourcing industry has expanded significantly to include various other segments and business spheres.
Many businesses today use BPO to outsource one or more of their IT business processes. Another area where BPO is in high demand is the field of human resources.
There are several types of HR BPO services, which we’ll discuss in the following sections.
It’s worth mentioning that if the business process outsourcing vendor or third-party is in a different country, the process is called “offshore outsourcing.”
Many companies often outsource their call center because it’s too expensive to have in-house. Sometimes, companies opt to outsource their call center to a foreign company.
In this case, it becomes offshore outsourcing, business process offshoring, or BPO offshoring. The service is also referred to call center offshoring.
But first, let’s look at the benefits of using business process outsourcing for your company.
Business process outsourcing advantages
Why do companies turn to BPO service providers?
Probably because of the many benefits of business process outsourcing. Let’s explore them here.
1) Greater expertise
One of the top reasons companies turn to BPO service providers is the greater expertise these companies provide.
Some business process functions and services are harder to come by. Hiring a full-time team is more likely to negatively impact the company – by straining its finances and resources – than outsourcing the service they want done.
Business process outsourcing vendors provide this expertise at a much lower cost than a company would incur if it hired a full-time team.
By hiring a BPO company, you’d be getting highly-trained and skilled people to perform business functions that you neither have the time nor capacity to take on.
An extension of the above reason and a top reason companies require BPO services is to reduce their costs.
Cost-cutting is becoming more crucial to startups, small and medium-sized businesses (SMBs), larger companies, and even corporates.
All companies, regardless of size, need to save money. But some business services are considered core services, ones that they need or their business will fail.
So, what do they do? They outsource these business functions to BPO service providers like Tawzef.
3) Saves time
One of the biggest advantages of business process outsourcing is saving time. Saving time means a business can both save money and increase productivity.
It also means, companies can focus on the revenue-driving areas of their business.
BPO service providers, like Tawzef, help companies do exactly that.
4) Better efficiency
Since BPO means you get to outsource some of your non-core business functions, it also means saving time and costs, which translates to better efficiency for your teams and employees.
Types of BPO services
When talking about business process outsourcing, it’s important to highlight the two main types of BPO services.
These are back-office BPO and front-office BPO.
Back-office business process outsourcing
Back-office business process outsourcing includes business support services that are considered part of the ‘core’ business operations.
In other words, back-office BPO includes functions like accounting, IT services, regulatory compliance, HR services, among others.
This means that HR outsourcing services are part of the broader services provided by BPO vendors.
Front-office business process outsourcing
The second type of BPO is front-office business process outsourcing.
Front-office BPO relates to customer-focused services such as sales, marketing, and tech support. Call center outsourcing, including call center offshoring, is a front-office BPO service.
Types of HR BPO services
Now that we’ve covered the main types of BPO services, let’s dive a little deeper into HR BPO services.
Human resources business process outsourcing encompasses the different types of HR outsourcing. However, it may include additional services like IT services.
Top HR BPO services most companies outsource include:
- GAP Analysis
- HR strategy
- Manpower planning
- Employee taxes
- Conformity with labor law regulations
- Salary surveys
What to expect when working with a BPO vendor
Let’s say you’ve decided to hire an HR consultancy or BPO company to handle one or more of your business processes. What can you expect from that company?
One of the essential factors or aspects you should always consider when outsourcing any service is to ensure:
- There’s a good communication between you and the BPO company.
- You’re clear on what you’re outsourcing and what you’re getting in return.
- Your contract with the BPO service provider should dictate the duration of the service they’re providing.
- Be aware that the BPO provider is like your partner.
Businesses today have a lot to do for their core business. However, instead of focusing on what they do best and on enhancing employee productivity, companies bury their employees under non-core tasks, resulting in limited productivity, burn out, and high turnover.
That’s why outsourcing non-core business functions is one of the best and most-effective solutions companies can turn to.
It means hiring someone else – a company – with great experience in areas you’re unfamiliar with to handle your business needs.
If you’d like to learn more about the types of BPO services including HR BPO services or if you’d like to outsource one or more of your non-core services, get in touch with Tawzef’s team and we’ll help you drive your business forward.