What is Business Process Outsourcing?

By December 27, 2019 March 19th, 2020 Business Process Outsourcing, Business Trends

Simply put, Business Process Outsourcing (BPO) is a process by which any business organization delegates non-primary business tasks to a third party. This enables the ability to increase focus on the primary activities of running the business. BPO companies provide all sorts of services, such as, Human Resources (HR), Customer Relations, Data Entry Services, Call Center Services, Accounting Services, etc.

Today, the outsourcing environment has become so diverse that companies can outsource their entire workflow.

Types of Business Process Outsourcing

There are two major types of BPO services; Back Office Outsourcing and Front Office Outsourcing.

Back Office Outsourcing refers to the outsourcing of tasks like Data Entry, Data Management, Data Analysis, Surveys, Payment Processing, Accounting, etc. By utilizing Back Office Outsourcing services, a company can significantly reduce expenses.

Front Office Outsourcing deals with the activities related to customer relations. These activities include Voice Services (call centers), Email Service, Tech Support, Marketing, etc.

Outsourcing options vary in three different ways, depending on the geographical location of the BPO company.

  1. Onshore Outsourcing: A company located in the S. outsourcing its work to another company located in the U.S. would be considered as Onshore Outsourcing.
  2. Nearshore Outsourcing: A company located in United States outsourcing to a company located in a neighboring country, like Canada, is considered Nearshore Outsourcing.
  3. Offshore Outsourcing: Finally, if the outsourcing service provider is located in a distant country, such as India or Philippines, then outsourcing work from United States would be Offshore Outsourcing.

What is business process outsourcing? The advantages that BPOs provide help increase efficiency, scalability, and overall ROI.

Why do Companies Outsource?

The first question people ask after learning about outsourcing is, “why outsource?”

The answer is simple: it reduces cost.

However, the advantages of outsourcing are far more than just cost savings. Here are some outsourcing benefits for a business:

Cost Effectiveness: This is the most obvious reason why any company would want to outsource its work. Most of the time, it costs less to outsource the work than to do it in-house due to associated overhead costs, such as maintaining an office, taking care of the employees, hiring an IT department. These responsibilities are all taken care of by the BPO company.

Increased Efficiency: Outsourcing companies are specialized in the work they are offer. For example, a company offering Data Entry Services will have specialized talent with the ability to work more efficiently. This specialization helps increase overall efficiency and productivity.

Increased Security: This advantage is directly related to specialization. A company which specializes in data processing will have more effective security measures in place to prevent data theft than other businesses could employ.

Easy to Scale: It is easy to reallocate resources and increase or decrease the operations as per the requirement when outsourcing as compared to doing it in house.

Better Customer Relations: With increase productivity in the work, and timely support provided by BPO companies, the business can focus on building better customer relations and not worry about non-primary activities of the business.

What we have to offer?

Here at ARDEM, we offer complete solutions for all your business needs. We provide BPO Services, Back Office Support Services, Accounts Payable Solutions, Utility Bill Management, Data Entry Services and more. How does it work? Contact us to learn more and get started today.

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Kellie Bakalian

About the Author

Kellie Bakalian is a Leader and Client Relations Specialist of ARDEM Incorporated, New Jersey. She holds a degree in Art History, Criticism and Conservation from Rutgers University and is an avid fan of history. She has worked at ARDEM for over 10 years managing projects, created meaningful relationships with customers, and taking charge of Government Contracts since 2008. She likes to write thoughtful articles on management and business process outsourcing.