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Business Process Outsourcing

When an organization involves a third-party service provider for working on their services or to perform tasks, it is known as ‘Business Service Outsourcing’ (BPO). Companies contract the BPOs for front office and back-office operations. Services like IT, quality assurance, and payment processing are back-office operations. Dealing with sales, handling customer relations, and grievance redressal are the qualities of an employee under front-end operations. Other services that come under a BPO are accounting, administration, customer service, and call centers, manufacturing, IT management and services, HR, marketing, sales, research, shipping, and logistics. There are a lot of advantages that come along with Business Process Outsourcing including a low budget, high efficiency, international expansion. With pros come the cons.

The company becomes highly dependent on the tasks and services provided by the third party and hence might face security issues and a lack of good results. The third-party service provider might or might not have the same perspective towards the tasks as the company and in the end, might come up with issues like hidden costs as well. But these entities are well trained in the tasks(customer service) that they perform.

Hence any company would invest more than the required amount to outsource their services rather than implementing the same at their premises.

Advantages of BPO

These days many start-ups come up with various tactics to deal with their business functions that are not of the larger significance part to the company but at the same time need attention. BPOs are their first choice so that they can work more efficiently on the core aspect of the company. If an organization wishes to expand its business at a global level, outsourcing will help them gain knowledge about the local market, culture, and language traits. Access to fluency in a foreign language can easily be acquired with a third-party provider. All of these points boost up the expansion and achievements of an organization.

As discussed earlier, these outsourcing companies are skilled in what they do. They know how to deal and tackle with the challenges faced in providing customer service. In the process of providing the best customer service, they also intake the latest technology and practices. All of this results in the best possible outcome with the finest productivity. Nevertheless, there is a lot of cost-saving to reduce all the purchasing of IT equipment and hiring employees to perform the tasks.

Disadvantages of BPO

When providing tasks to a service provider, an organization might lose access to its data. It might result in a security breach and not every service provider will be sensitive in sharing and processing the data. Providing services over a long time would also make them overdependent and lead to a higher cost than expected. In case the BPO company is offshore, there might also be language problems associated and outsourcing services like IT can lead to huge blunders due to miscommunication.

Conclusion

Considering the operational flexibility that a BPO provides, it is always the first choice for companies to focus more on their topmost prioritized tasks. It helps to look at goals and give a skilled hand to non-core services that require attention. On the other hand, there are a few drawbacks to this. There are some of the recognized BPOs where chances of these drawbacks are less. Choose the right BPO option for your organization to balance every function.