It won’t be wrong to say that outsourcing has become the hottest and most exciting topic across industries around the world throughout the past couple of decades. Business Process Outsourcing is a common practice of taking help/hiring a third party to take care of certain work processes for your business. BPO services can include website content, payrolls, customer support, accounting, social media marketing, and much more.
BPO is usually characterized as either front office or back office, relying on the kind of business process it takes care of. Front office work includes customer-oriented tasks such as customer service, support, marketing & sales. Whereas, the back office incorporates internal business functions; these keep the business operational but customers cannot see it. In this particular writing, you shall witness some of the best advantages as well as disadvantages of Business Process Outsourcing.
Advantages and Disadvantages Of Business Process Outsourcing
Advantages of Business Process Outsourcing:
- Cost-Effectiveness- Be it a small company or a large giant, cost-effectiveness is a major benefit. BPO companies offer state-of-art services at pocket-friendly pricing and the factor that makes it possible & highly efficient is the high availability of resources and proper management. BPO service providers are capable of managing their resources in a way that they can stand on the requirements of their clients. It is said that with BPO companies, you can reduce your business’s expenditures to an extent of 70%.
- Skilled & Proficient Manpower- Having a skilled person to get a job done is important, isn’t it? This is the area where the salience of business process outsourcing grows because BPO companies have established their reputation for having skilled manpower that makes sure that the business objectives are met with utmost perfection. Another great advantage is that the problem of overstaffing and understaffing also vanishes with it.
- 24*7 Smooth Operations- With a business process outsourcing company, you can win 24*7 business operations. For small businesses, the cause of frustration is round-the-clock business operations that ask for hefty investments; resulting in mismanaged budgeting. This is where BPO companies set in. The BPO providers never confront scalability-related issues, for which the credit goes to their enormous industrial experience.
- Global Expansion- If your organization is deciding to enter an overseas market, certain activities that ask for local market knowledge, national law expertise, or English language fluency can be assigned to a BPO company. This results in enhancing efficiency and widening the expansion of your organization.
Recommended Read: What Are The Best Business Process Outsourcing Trends For 2021-22?
Disadvantages of Business Process Outsourcing:
- Less Control Over Outsourced Tasks- The negative factor that stays hidden under the darkness of advantages is “less controlled outsourcing tasks”. For Business Process Outsourcing, you have to understand that both the vendor as well as the company have to agree on some terms, and then the former takes the entire control into their own hands. Sometimes, the client’s company wants certain changes in outsourced call center operations. However, the signed agreement doesn’t let them do that, which sometimes fetches problems at a later stage.
- No Transparency In Costs- You must know that in the business world, everything works on faith and trust. Usually, small businesses reach out to vendors at an unbeatable price. Striving for availing services at a nominal price is a good practice in itself but that doesn’t mean that you can let your guard down. In a nutshell, cost-effective issues have always been associated with Business Process Outsourcing as a highly unfortunate factor. To get rid of the problem, it is crucial to discuss the pricing model thoroughly before handing over the contract.
- Communication Problems- While working with a Business Process Outsourcing company, the language barrier may come up as a hindrance to the overall business’s operational efficiency. Outsourcing services such as development or IT services, where a lot of people are involved can ultimately result in miscommunication. And, needless to say, this can be cost-burdening for your company.
- Overdependence- When you outsource your work to a BPO company for quite a long time, then your organization may become accredited to the way they work and tend to get over-dependent on them. It leads your organization to pay more than the usual costs if demanded.
It won’t be wrong to say that Business Process Outsourcing is a great alternative for businesses that don’t have much time to spend on non-core activities. However, every company of any size must be completely aware of both its advantages and disadvantages of it as you will be solely responsible for the enhancements or downgrades that are the two main aspects of hiring a BPO company for your business operations.