What Is Business Process Outsourcing (BPO)?

There are numerous potential advantages to hiring a BPO company. Among them are greater operational flexibility, access to innovative technologies and top talent, cost savings, access to advanced and quick reporting, reduced risk, a better ability to respond to change and, ultimately, a competitive advantage. Here is a closer look at each of these benefits.

Greater Operational Flexibility

By outsourcing non core competency functions within your business, such as marketing and HR, your personnel are free to focus exclusively on core competencies. In turn, this gives them time to be innovative and adaptive in their work.

Access to Innovative Technologies

To compete for clients against other BPO companies, most BPO companies specialize in one business function and invest in the latest and best technologies in that specialization. This often means companies that outsource to them gain access to the most innovative and best technologies in the industry, technologies they may not otherwise have the budget to implement internally or may not even know exist.

Access To Top Talent

Many BPO companies hire talent with extensive backgrounds and credentials in the area in which they specialize, such as HR or payroll. Hiring top talent means they can compete for clients against other BPO companies. It also means the businesses that hire them gain access to the expertise within that top talent.

Cost Savings

Many BPO companies exist or hire within countries with lower corporate income tax and acceptable incomes. As funds are saved by hiring from other countries, those savings are often passed along to businesses that outsource through them. In addition, many other costs can be saved by hiring a BPO company, including office rental costs, employee-used software fees and other overhead costs.

Access to Advanced and Quick Reporting

Access to advanced technologies like artificial intelligence (AI), machine learning (ML)and automations via BPO companies allow businesses to gain access to more advanced and quick reporting, including financial and cash flow forecasting.

Better Change Responses

By accessing top talent, innovative technologies, cost savings, greater internal flexibility and advanced reporting, companies are better able to adapt when their industries quickly or customer demands change. They may even be able to adapt before the changes hit to stay ahead of demand. For example, access to advanced reporting can help outsourcing companies forecast coming changes so they can adapt before they are forced to.

Specialized Risk Management

Companies that outsource business functions can potentially reduce risks by putting those areas of their businesses in the hands of tried and true experts who know how to avoid relevant risks. For example, if a company outsources its information technology (IT) function, the hired IT experts may know ways to mitigate risks with greater attention to detail than the outsourcing company’s current employees.

A Greater Competitive Advantage

With access to innovative technologies, specialized expertise, cost savings, advanced and quick reporting, specialized risk management and opportunities for greater operational flexibility, companies are better able to develop competitive edges against competitors that may not have such access.