BPO Models: Why You Should Consider Business Process Outsourcing – RDI Connect

What is Business Process Outsourcing (BPO)?

Business Process Outsourcing (also known as BPO) is the concept of hiring another outside business to fulfill a process that your business needs to operate. RDI saves you time by taking over essential but non-primary business functions for your company. Our services include call center and managed IT services and support, market research and consumer insights outsourcing, and social media marketing. All of these offerings can help your business improve its efficiency and, in turn, become more successful.

Companies typically choose to outsource when they feel that another specialized company, like RDI, could better complete the task at hand ultimately saving time and money. Most often, businesses find it more efficient to outsource rather than creating a new department within the company itself to be responsible for business processing.

BPO is of interest to companies of all sizes across the world. From young startups to significant Fortune 500 companies, all sorts of businesses across industries choose to outsource different processes – and the outsourcing industry is only growing. As new, innovative services are introduced, companies will look for any edge they can get to push them ahead of the competition. Adopting RDI’s BPO business model is a surefire way to streamline your company’s functionality and take your company to the next level.

There are two main types of services when it comes to BPO – back office and front office. Back office services handle internal business processes like billing or purchasing, while front office services handle contracting the company’s customers through services like call centers, marketing, and tech support. BPO providers typically combine these back and front office services.

Vendor locations determine the three categories of the BPO industry and global outsourcing.

1. Offshore vendors are located outside of the business’s home country. To give an example, a company in the United States partnered with an offshore BPO business in the Philippines.
2. Nearshore vendors are located in neighboring countries to the contracting business’s home country. For example, in the US, a nearshore vendor like RDI Connect could be your BPO provider located in Nogales, Mexico.
3. Onshore vendors are located in the same country as the contracting business, although they can be in a different state. A company based in Miami, Florida, could contract with an outsourcing company like RDI based in Ohio, Indiana, Kentucky, Vermont, or Nevada.

Benefits of Business Process Outsourcing

Businesses based in the United States choose to outsource for several reasons, as there are numerous benefits to using a BPO service provider. Some people claim that the tax breaks associated with outsourcing are the sole reason businesses choose to outsource; however, that notion is flawed.

According to PolitiFact, while there are tax breaks for a company when it moves locations out of the state or country, there are currently no specific breaks concerning outsourcing. Nevertheless, one thing that is important to note in regards to this argument is that the United States has one of the highest income tax rates in the developed world, sitting at a whopping 39.1%. This means US companies do receive some benefits and indirect tax breaks by outsourcing to BPO vendors in countries with lower income taxes.

While these breaks can be incredibly beneficial, some other advantages of outsourcing business processes include the following:

Cost-efficiency:

Using RDI to outsource business processes reduces the cost of in-house labor, from staff training to office space. Companies can also utilize fee-for-service payment plans, granting more financial flexibility instead of hiring local, full-time employees.

Upgraded Security:

Outsourcing to RDI ensures that you’ll have better security to protect against cyber theft and other crimes.

Greater Efficiency:

Due to the nature of outsourcing, RDI helps streamline non-core business functions. Specialists will handle those tasks, which in turn saves time, improves accuracy, and increases productivity. Instead of dedicating your company’s time, money, and energy towards the business process, outsourcing to RDI allows your business to spend more time focusing on what you do best.

Better Coverage:

RDI trains all of our employees for each task tailored to your business, so you never have to worry about being understaffed. Even with an employee out sick, there is always someone that has already been trained in the position to cover for them.

Improve Relations with Vendors:

Outsourcing services speed up business processes, which means quick turnaround times between your company and your vendors. This will keep both parties happy and working well together.

Supported Services:

RDI offers many different services to fill in gaps and help take your company to the next level, no matter the industry. Some specialized areas of service include the following:

Information-Technology Enabled Services (ITES) BPO:

This form of business process outsourcing uses information technology over data networks or the internet to provide services. Examples of ITES BPO jobs include IT analyst, production support analyst, and service desk analysts like RDI Intuitive Technical’s managed IT security services outsourcing.

Knowledge Process Outsourcing (KPO):

KPO firms go beyond offering expertise in business processes. They also provide business and domain-centric expertise. Examples of KPO services include analysis, research, and Microsoft Office Suite. KPOs can make low-stakes business decisions so long as they are in alignment with higher-level policies.

Legal Process Outsourcing (LPO):

LPO is a subgroup of KPO and is allocated a massive swath of higher-level legal work. LPO firms draft legal agreements and patent applications alongside conducting legal research. Some LPO BPOs even advise clients. LPOs consist of experienced paralegals who use industry-standard databases.

Research Process Outsourcing (RPO):

As another subgroup of KPO, RPO focuses on research and analysis processes. The research and analysis of these RPO companies like RDI Sightline consumer insights outsourcing informs business, biotech, investment, and marketing firms.

Travel:

From reservations to hotel and vehicle bookings, travel outsourcing specializes in all the operations that go into travel logistics. Travel BPO creates significant cost savings for companies because it’s financially efficient while simultaneously increasing customer satisfaction. Airlines and travel companies also streamline front and back-office processes with BPO. To give an example, an airline could potentially outsource its ticketing process.

Some other specific services that BPO companies can specialize in include the following:

Customer Interaction Services such as call centers, voicemail and email services, social media, marketing, appointment scheduling, surveys, payment processing, orders processing, quality assurance, warranty administration, and customer support, all services offered by RDI Connect.

Back Office Transactions such as credit, debit, and check processing, receivables, collection, transportation administration, logistics, and warehouse management, to name a few.

IT and Software Operations offered by RDI Intuitive Technical as tech support, app development and testing, and IT help desk.

Knowledge Services such as RDI Sightline outsourcing for data analytics, data mining, internet and web research, information governance programs, and voicing customer feedback.

Finance and Accounting Services such as general account, billing services, accounts payable, receivables, and auditing.

Human Resource Services such as healthcare administration, payroll services, hiring and recruitment, training, retirement benefits, and insurance processing.

Types of BPO Models

Captive Model

In a Captive BPO Model, the third-party service provider handles proprietary and core business functions that the parent company retains in order to exercise greater ownership and control- hence the name “captive.” The captive model ensures long-term specialization for its resource requirements and is ideal for businesses seeking to lower costs by having their own operations.

Build-Operate-Transfer or BOT Model

The BOT model is an agreement between a business and a BPO service provider where the rights to build and operate a particular project are granted to the third party within a specific time frame. In this model, a private entity would hold the right to design, construct, and operate a project or facility in exchange for low costs, expertise, and quick transition times. An example of this kind of model would be infrastructure, where the government grants the right to construct an expressway to a private business. Ultimately, the company will return the ownership of the expressway to the government after a specific time frame.

Joint Venture (JV) Model

In a Joint Venture business model, both the business and third party join forces to run operations. Both parties equally contribute to capital, employees, and intellectual property rights, to name a few. Both companies share losses, assets, profits, and management. Although the parent company still retains core business functions, the third-party service provider will handle less critical functions.

Niche BPO

In the Niche BPO Model, the main goal is to make company processes more efficient by working closely with the firm. Both parties share the associated risks.

Outsourcing business processes to BPO service providers is yet another way businesses seek to rise above in the 21st century. Whatever your business needs are, consider using RDI for your outsourcing needs to save your company valuable time, money, and energy.

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