Are you tired of doing everything in-house and seeing more and more of your hard-earned money going on ever-increasing employee costs and government-mandated extras?
Do you feel like you're drowning in administrative tasks and just want to focus on what you do best?
Well, have you considered Business Process Outsourcing (BPO)?
Let me tell you all about it!
In simple terms, BPO means hiring someone else to do your non-core business functions, like accounting, payroll, human resources, and customer service.
It's like having your own personal army of experts without the cost and hassle of hiring and training them in-house.
Now, BPO isn't new.
It's been around since soft drink manufacturers started outsourcing parts of their supply chain.
But now, it's used for a variety of services, including tech support, software development, and even accountants and bookkeepers.
For example, we have a client on our enterprise solution, he's in the logistics industry, and his company hires people in the Philippines in the following positions:
- Billing Specialists
- Customer Support
- Accounting Staff
Another person who uses VirtualStaff.ph is a famous YouTuber, and he hires full-time video editors.
Why?
Well, big cost savings and zero quality compromise.
If you can achieve those things, then your business is going to thrive, and it's exactly why BPO companies (Business Process Outsourcing firms) are doing well supplying talent.
It's a win/win for everybody, especially if you, as the business owner does not have any liabilities or compliance risk.
A good BPO company will take care of all of that for you.
Meaning of Business Process Outsourcing (BPO)
Let me break down the concept of Business Process Outsourcing (BPO) for you in a way that won't put you to sleep!
Picture this: You run a business, and you're juggling a million different tasks.
It's like trying to keep a dozen plates spinning at the same time, and if just one of them falls, the whole show could come crashing down.
That's where BPO comes in.
Basically, it means hiring another company to handle some of those tasks for you.
So instead of trying to do everything yourself, you can focus on the things you're good at and let someone else take care of the rest.
There are two main types of BPO: Back office and front-office.
Back office BPO means outsourcing things like accounting, HR, and quality control.
It's like having a team of superheroes working behind the scenes to keep everything running like clock work.
On the other hand, front-office BPO is all about client-facing tasks like tech support, sales, and marketing.
It's like having a squad of smooth-talkers who know how to charm your customers and make them feel like they're in good hands.
And these days, BPO isn't just limited to those types of tasks.
You can outsource all kinds of specialized knowledge, like social media analytics, software development, and search engine optimization.
That's what we call Knowledge Process Outsourcing (KPO).
5 Types of Business Process Outsourcing
1. Front-Office Business Process Outsourcing
Customer-facing services fall under this category, which also includes tech support, customer service, sales, and marketing.
Businesses can take advantage of specialized people with distinctive knowledge and save money by outsourcing web development, customer care lines, or any front-office services.
2. Back-Office Business Process Outsourcing
Contracting services that are not customer-facing are a part of back-office business process outsourcing. IT, accounting, business process automation, human resources, quality assurance, etc, are among them.
A variety of BPO subtypes have arisen, such as IT-Enabled Services (ITES) BPO, which employs IT analysts, Legal Process Outsourcing (LPO), which employs paralegals or consultants; and Knowledge Process Outsourcing (KPO), which outsources a person with program management or implementation expertise.
Businesses can focus on their core goals by outsourcing these tasks rather than investing in time-consuming and expensive internal training and onboarding.
3. Offshore Business Process Outsourcing
When services are outsourced abroad, this is called offshoring.
The availability of resources, political stability, cheaper labor costs, various tax benefits, and other factors encourage this.
Companies frequently outsource their customer support divisions by signing contracts with call center providers around the globe, especially in the Philippines. As a result, companies can get skilled labor and services at a reduced cost, lowering overhead expenses and possibly lowering the cost of goods or services to consumers.
See how you could save 82% in costs by building an offshore team in the Philippines.
4. Nearshore Business Process Outsourcing
The practice of hiring contractors in nearby nations is known as nearshore business process outsourcing.
For US-based companies, this can cover Central America, as well as Canada and Mexico.
This type of outsourcing typically takes place when specialized skills are less expensively available in a nearby country, but certain considerations, such as time zones or language proficiency, must be made.
An example of this is when a Canadian business hires a U.S marketing agency to handle its marketing needs, or a Silicon Valley business contracts Canadian experts to handle its IT and coding needs.
5. Onshore/Domestic Business Process Outsourcing
The act of outsourcing and receiving services within the borders of a country is known as domestic outsourcing.
This means that a vendor in one city, state, or province may be hired to supply services to a company in a different city, state, or province.
Numerous reasons, like the availability of specialist talents in specific areas or regional variations in prices and costs, may be the cause of this.
Advantages of Business Process Outsourcing for Business
1. Reduced Labor Costs
When you outsource, you won't have to worry about the expenses associated with employing and training staff.
Think about it, you don't need to provide office space for these workers, so you save on office space expenses.
That's not all. You'll also save fortunes in employee costs.
Check out these case studies to see how much these businesses saved by building teams in the Philippines.
These cost savings are no joke.
In fact, it's likely the reason why the global BPO market is projected to hit a whopping $525 billion by 2030.
By outsourcing, you'll not only save money, you'll also have access to a talented pool of skilled staff who are experts in their respective fields.
It's a win-win situation!
2. Concentrate on Core Competencies
Companies can concentrate their resources on the core company operations by outsourcing. They won't have to be concerned about the performance of the accountant and bookkeeper.
Instead, they may focus on actions that would make them stand out from the competition and can concentrate on expanding the company.
Through these measures, the value chain is improved, which strengthens the company's competitive advantage.
Customer happiness and revenue are both improved by concentrating just on core business operations.
3. Improve Results in Non-Core Functions
Working with an outsourcing company can be a game-changer for your business.
Here's why: when you outsource, you get to work with experts who specialize in the function you need help with.
Even if it's not a key function for you, it's their bread and butter.
For example, if you were to partner with my team via our Enterprise Solution.
You're not only going to get legal protection, HR, and compliance, but you're also going to work with a world-class team that knows the Philippines market inside out.
Whether you partner with us or not, the key is to partner with a top-tier BPO company or go through a legit outsourcing marketplace.
By working with a top-quality BPO company, you get access to top talent in a variety of industries without having to make any big investments in a legal and compliance department.
Sounds pretty sweet, right?
4. Global expansion
Some tasks that call for familiarity with the local market, understanding of national law, or proficiency in a foreign language can be delegated to a BPO business if an organization wishes to enter a foreign market. It aids in accelerating expansion and increasing efficiency.
Some outsourcing agencies offer round-the-clock, multilingual customer service.
5. Increased Flexibility
A company that outsources functions can act quickly and efficiently when it comes to risk management for introducing new offerings to clients.
These companies can also modify their internal resources to effectively handle more important tasks. 37% of small businesses outsource at least one business process, which helps them improve their flexibility.
6. Improved Speed and Efficiency
Outsourcing your business processes to the Philippines can drastically reduce turnaround times, leading to improved speed and efficiency.
Just imagine being able to plug and play and have an entire customer support department set up without having to deal with compliance, taxes, and legal headaches.
5 Commonly Outsourced Business Processes to the Philippines
Many tasks that can be handled in-house can be easily outsourced. Among the processes that are most frequently outsourced are:
Customer Support:
Customer service support is one of the most commonly outsourced business processes to the Philippines.
This includes tasks such as handling customer inquiries, complaints, and technical support.
The Philippines is well-known for having a highly skilled and competent workforce with excellent communication skills, making it an ideal location for providing customer service support to businesses worldwide.
Accounting and Finance
Many businesses choose to outsource their accounting and finance processes to the Philippines due to the country's highly skilled accounting professionals, plus they can save thousands of dollars a year in employee costs. (The cherry on the cake).
Digital Marketing
Outsourcing digital marketing tasks such as social media management, content creation, and search engine optimization can help businesses increase their online presence and reach a broader audience while also reducing costs.
Administrative Support
Things such as data entry, document preparation, and scheduling is another popular process that businesses outsource to the Philippines.
The country has a highly educated workforce with excellent administrative skills, making it an ideal location for outsourcing these tasks.
IT Support
The country has a large pool of highly skilled IT professionals who can provide software development, network administration, and help desk support services.
Outsourcing IT support to the Philippines can help businesses save on costs while benefiting from highly skilled professionals' expertise.
How to Choose a BPO Service Provider
The choice of a company's outsourcing partner is of the utmost importance.
Since it has an impact on personnel, business operations, and workflow procedures as a whole, outsourcing non-core business functions from within an organization requires change management.
The following steps are included in the decision-making process for outsourcing:
1. Define your Requirements
Understanding the business operations that need to be outsourced in detail is crucial. It will be challenging to discover the ideal outsourcing partner without specifications. The partner company should also be aware of what the project requirements and the specifics of the job entail.
2. Narrow Down the Selection Criteria
Choosing the selection criteria and then evaluating vendors according to them is the most important stage in choosing the proper provider. The following factors might be taken into account while choosing your BPO service provider:
- Area of Expertise of the BPO Company
- Services offered by them
- Employee Strength of the firm
- Cost of their services
- List of clienteles
3. Shortlist Few Outsourcing Agencies
Start shortlisting a few outsourced companies based on your evaluation criteria. The ideal number of selected businesses is three to five, with the ability to whittle that number even further.
4. Assigning Pilot Projects
Once the shortlisting process is complete, it's time to assign pilot projects to each of them. This aids in determining the company's capacity to carry out the responsibilities assigned to the firm that will be recruited.
5. Evaluation of the BPO Agencies
Evaluation of the agency can be done based on the criteria such as:
- Quality of the Delivered Output
- Turnaround time of the project
- The adaptability of the sudden updates in the project
- Cost of the Services offered
6. Hire From an Outsourcing Marketplace
The VirtualStaff.ph outsourcing marketplace offers the hybrid of "strip costs and do it yourself" and "done for you" via the Enterprise Solution.
Not only will you save a ton of money (and I mean a ton), but you'll also get access to a talented and hardworking pool of Filipino professionals who will work their butts off to get the job done.
The best part is that you have full flexibility. You decide how much you pay when you pay and who you want to hire.
Frequently Asked Questions
1. What is Business Process Outsourcing (BPO), and how does it benefit businesses?
BPO involves delegating non-core business functions to external service providers, allowing businesses to focus on their core competencies. Benefits include cost savings, access to specialized skills, increased efficiency, and scalability.
2. What types of tasks can be outsourced through BPO?
Tasks such as customer support, accounting, digital marketing, administrative support, and IT support are commonly outsourced through BPO.
3. How does BPO contribute to cost savings for businesses?
BPO eliminates the need for internal hiring and training costs, reduces overhead expenses like office space, and provides access to a global talent pool with competitive labor rates.
4. What are the key differences between back-office and front-office BPO?
Back-office BPO focuses on internal functions like accounting and HR, while front-office BPO deals with customer-facing tasks such as customer service and sales.
5. What are the advantages of offshore, nearshore, and onshore BPO?
Offshore BPO offers cost savings and access to a global talent pool, nearshore BPO provides proximity and cultural alignment, while onshore BPO ensures regulatory compliance and communication ease.
6. How can businesses ensure quality and efficiency when outsourcing processes?
By selecting reputable BPO service providers, establishing clear communication channels, setting performance metrics, and conducting regular evaluations, businesses can maintain quality and efficiency in their outsourced processes.
7. How can overdependence on external vendors affect a company when outsourcing?
Overdependence on external vendors in the outsourcing process can significantly impact a company in various ways. Entrusting all business operations and decision-making solely to service providers can often result in business chaos and, ultimately, failure. This overreliance can lead to a disconnect between the company's objectives and the actions taken by the external vendor, potentially derailing the achievement of key business goals.
Ineffective communication and lack of collaboration between the company and the vendor make it challenging to maintain transparency, monitor progress, and address any issues promptly. Without clearly defined business goals and metrics in place, an organization risks losing control over the outsourcing partnership and may not obtain the desired outcomes. Therefore, it is essential for companies to establish a strong partnership with their vendors based on open communication, shared objectives, and mutual understanding to ensure the success of their outsourcing endeavors.
The Bottom Line
Outsourcing can save you some serious dough, increase your productivity, and give you the flexibility you need to focus on what matters.
Plus, it's not just a passing trend - the BPO industry is growing faster than my waistline after a buffet (and that's saying something).
So, if you haven't dipped your toes into the outsourcing pool yet, it's time to dive in and do some research.
And if you're going to do it, here's my best advice.
"The key to successfully building a team in the Philippines is to save a tonne of money, but never compromise on the quality of staff you hire."
Sign up on VirtualStaff.ph and start building your team today!
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