With the outlook of global economy still uncertain, companies are looking towards smaller and lower risk outsourcing transactions for achieving their cost saving targets. This approach makes sense because if the larger deals go wrong, the cost for companies to roll back their investments are proportionately higher. Even when the companies are awarding smaller contracts, their expectations for quality and commitment from their providers have not wavered. On the contrary, companies expect outsourcing partners to step up their execution and show their commitment by continuously providing high quality services at a reasonable cost.
For providers, this implies that they need to step up their game. They need to put much more focus on understanding clients’ businesses, their processes, and their objectives that they want to achieve with the collaboration. This will minimize the operational, strategic, and capability risk. Secondly, the providers need to improve their delivery process. They need to incorporate the necessary technology and tools in their delivery process to make it more efficient and less error prone.
While the recession has slowed and somewhat changed the BPO dynamics, the fact remains that this segment of technology services will continue to grow. According to Baystreet.ca, the global “addressable” BPO market is worth $122-154 billion U.S., most of it in retail banking, insurance, and travel/hospitality industries, with such sectors as the auto, telecoms, pharmaceutical, accounting and Human Resources catching up.
Let’s review some of most common business process outsourcing sectors:
Accounting Outsourcing is gaining popularity with SMEs because it is becoming a challenge for them to keep their books up-to-date at a reasonable cost. Accounting outsourcing services not only reduce the annual cost by 50% to 60% but also eliminate the need to maintain a separate accounting department.
Some of the services under this category include:
- Account Receivable and Payable
- General Ledger
- Fixed Assets/Equipment Accounting
- Audits and Project
- Closure of Books
- General Accounting Reporting
- Accounts Reconciliation
- Cash flow Analysis
- Sales Analysis
- Billing Services
Data Process Outsourcing
Data, once collected and properly organized, can be a powerful tool for decision makers. It can provide valuable insight and help companies formulate their future policies and growth strategies. With data process outsourcing, companies can access highly qualified resources at reasonable rates.
Some of the services in Data Process Outsourcing include:
- Data conversion from multiple platforms to single platform
- Conversion of raw data to desired format
- Data compilation from different sources
- E-book conversion
- Catalogue data entry
- Receipt and bills data entry
- Editing, sorting and indexing data
Customer Services Outsourcing
Prompt, courteous, and knowledgeable customer service is essential for survival of any business. Customers, who are not satisfied with how their complaints or questions have been handled by a certain company, are ripe targets for competitors. However, companies are always struggling to find enough financial resources to continue to invest in their core business and at the same time to hire, train, and deploy more customer service personnel. Customer Service Outsourcing is a viable option which companies can use to bulk up their customer care staff while keeping the costs low.
Some of the services provided include:
- Call centers
- Voice emails
- Email/chat support
One aspect of technology advancement has been the advent of paperless office. One of the processes supporting the model is transcription from audio files. Transcription outsourcing has reduced cost and turnaround time, and at the same time freed office resources from taking tedious.
Some of the services included in Transcription Outsourcing are:
- Medical transcription
- Audio book conversion
- Meeting agendas and notes
- To do lists
Knowledge Process Outsourcing (KPO)
This part of BPO involves outsourcing of more complex business tasks and processes. While in other areas of BPO, the workers are executing a defined business process which is repetitive in nature; in KPO the workers are using their knowledge of certain area to generate valuable insight and intellectual property. For example, an analyst in an offshore location, who has an MBA and some stock market exposure, can perform stock analysis and write a report, is providing services that fall under Knowledge Process Outsourcing.
Increasing education levels in offshore locations have opened vast KPO opportunities for companies looking for skilled and knowledgeable staff at reasonable cost.
Some of the services that fall under Knowledge Process Outsourcing are:
- Learning Solutions
- Business & Market Research
- Research & Development
- Content Development
- Data Analytics
- Training & Consultancy
- Equity Research
BPO provides a viable and profitable business model for both buyers and providers of these services. The cost savings are well documented and understood. As long as the involved players continue to adjust to ever changing economic conditions and technology innovations, there is strong reason to believe that BPO services will continue to gain traction and, therefore, should be a part of the overall corporate strategy of companies wanting to increase productivity and to reduce cost.