When automation is considered for scaling up the business, Software as a Service (SaaS) and Business Process Outsourcing (BPO) are often mentioned in the same line. However, there is a huge difference between SaaS and business process outsourcing. This distinction is at the heart of the ongoing BPO vs SaaS discussion. Here companies assess the benefits of software automation versus service-based execution.
Under BPO, the outsourced processes are shifted to the service provider. Companies that utilize these services are looking at improving their efficiency rather than use of specific methods/softwares. Whereas in SaaS, the authority and responsibility to use the purchased software service remain with the company. This self-managed model is typical in SaaS outsourcing. Here businesses rely on SaaS business process tools to manage operations internally.
Software as a Service (SaaS)
Software as a service (SaaS) refers to an application serving the end-user through the internet. SaaS works on the cloud distribution/delivery model.
A SaaS provider can host the applications on its own servers independently or can use a third-party cloud service. SaaS products are available for both B2B and B2C users.
SaaS applications are generally accessible through web browsers or a small installation possible remotely. Companies using SaaS applications need to pay a fee to the provider. It can be subscription-based or usage-based. These features make SaaS outsourcing ideal for companies seeking minimal IT dependency.
Why would a business choose SaaS over a BPO?
- A company prefers SaaS over BPO if its data storage requirement is limited.
- If a company has an urgent requirement of scaling up with a new client, it can purchase a SaaS service.
Business Process Outsourcing
Business process outsourcing (BPO) refers to utilizing third-party services for certain business operations. It involves delegating business processes to an external service provider to manage and streamline these processes. Many companies compare the BPO model with SaaS business process platforms to decide what suits their operational strategy best. A business process outsourcing company can offer horizontal offerings across specific industries and vertical offerings that demand thorough industry-specific process knowledge.
BPO services are provided across industries. These services are often supported by advanced business process outsourcing software designed. Thus, BPO vendors ensure end-to-end visibility and control. Some commonly outsourced processes are customer service, accounting, data mining, IT services, payroll, regulatory compliance, and human resources management.
BPO allows the workforce to remain in their home country while contributing their skills outside the geographical boundaries. It is called offshoring if the service provider is located outside the country, several time zones away. Offshore BPO vendors offer scalable solutions that compete directly with cloud-based SaaS applications. Nearshoring refers to the provider being in the neighboring region or one or two time zones away.
How Does the Costing of BPO and SaaS Work?
When it comes to cost, companies using SaaS applications need to pay a fee to the provider. With subscription-based or usage-based monthly or yearly payments, Saas solutions may be attractive. But when it comes to ROI, companies prefer BPO solutions. Data shows that an efficient BPO provider can reduce operational costs by 30%. This is particularly true when evaluating the long-term cost-effectiveness in the BPO vs SaaS decision-making process.
If a company wants to pay for what it uses and the limited facilities of SaaS providers do not create an issue at all, a company is good to go with SaaS at a minimum cost.
Another scenario for cost is hiring and training costs. Compared to traditional SaaS business process models, BPO vendors often provide ready-to-deploy teams with deep process expertise. A BPO service provider can mirror your existing business workflow on the cloud. Or, if required, it can customize the workflow and take the responsibility of training. Since the hired team is an expert in its field, it will handle all assigned business tasks with great competency.
On the other hand, when the host implements new functionalities to SaaS applications, they are rolled out to all users. So, companies need to provide extra time and resources for training. This constant update cycle is one of the key elements in the difference between outsourcing and business process outsourcing versus adopting SaaS tools.
Which is Easier to Implement?
When it comes to quick setup and deployment, SaaS applications win as it is already configured in the cloud. However, with numerous benefits of BPO over SaaS, BPO solutions are the preference of most companies. Understanding the difference between BPO and outsourcing also helps clarify why BPO vendors remain a preferred partner in more complex operations.
ARDEM – A Great Outsourcing Partner
You may want to evaluate SaaS outsourcing or seek a complete business process outsourcing software solution. ARDEM brings expertise to both worlds. Your search for an efficient outsourcing partner ends with ARDEM, utilizing machine learning and artificial intelligence to engineer successful outsourcing solutions. Automated workflows in different business processes result in maximum ROI and operational efficiency. With a range of proprietary robotic process automation (RPA) bots, we deliver a successful solution across industries.
For more information please reach out to us at pricing@ardem.com or call us at 908-359-2600.
