A Helpful Guide to Measuring Outsourcing Investment for Phoenix Businesses

Hiring a BPO company in Phoenix with offshore or nearshore operations can enable your organization to reduce costs and increase revenue. It does this by providing services that improve your output and efficiency, helping you achieve business goals. 

However, quantifying the real value of your investment is easier said than done. 

This article helps you measure the outsourcing investment of your Phoenix business. It also explains the revenue and cost advantages of collaborating with a third-party provider.

Stay on this page to discover more. 

Measuring Outsourcing Investment for Phoenix Businesses

What is the business process outsourcing (BPO) provider’s contribution to improving your return on investment (ROI)? 

Outsourcing involves delegating back-office functions (e.g., customer service, help desk, sales support, and human resources) to a BPO provider with overseas operations. The third-party provider has the expertise, resources, and time to manage your operations. As such, it can help reduce costs, enhance efficiency, and boost sales for your Phoenix enterprise. 

This strategy can help maximize revenue while minimizing costs compared to in-house management. You can measure the returns of your back-office outsourcing investment by considering the savings (on the cost side) and revenue (on the revenue side) it generates for your Phoenix business.

Measuring Outsourcing Investment for Phoenix Businesses: Revenue-side

Consider how the service provider helps improve revenue to make the outsourcing investment efforts of your Phoenix business worthwhile and successful.

Offers 27/4 Customer Service Operations for Ceaseless Support 

One way to determine if your outsourcing investment is worth it is to see if the provider can offer nonstop support for your Phoenix business. The service provider’s remote teams should be able to work anytime to accommodate your consumers. Some providers offer services during the holidays, weekends, and graveyard shifts.

Round-the-clock customer service works best for e-commerce businesses. Your in-house unit can run your Shopify electronics and gadgets store in Downtown Phoenix in the daytime. Meanwhile, the offshore team from the Philippines continues the nighttime operations, mainly handling buyer inquiries and concerns.

24/7 operations can translate to higher revenue by:

• Attracting new customers. Customers worldwide can transact with your online business and get fast service. Nonstop customer support allows you to expand into other markets more easily.
• Building market superiority. Continuous customer support can enhance your market reputation, giving you a competitive edge. It also makes your Phoenix company appear larger by delivering constant service regardless of time and place. 

Provides Diversified Expertise for Revenue-enhancing Services

You can measure the value of your outsourcing investment based on the quality of the provider’s talent. The ideal talent pool for your Phoenix business should comprise tech-savvy, adaptable, personable, communicative, and formally trained professionals.

These professionals have exceptional social skills and expertise in modern technologies, including computer systems, smartphones, and social media networks. They are skilled in various business fields to boost the outsourcing investment of your Phoenix business. 

The following are the income-boosting services that third-party workers can deliver: 

• Using conversion rate optimization procedures
• Launching effective digital marketing strategies
• Facilitating inventory and fulfillment functions
• Deploying retention plans
• Harnessing data analytics and metrics 
• Improving the website user experience (UX)

Their broad experience, proficiency, and knowledge can translate to higher revenue by: 

• Strengthening customer or buyer loyalty
• Honing competitive advantage 
• Amplifying company and brand image
• Raising employee morale and minimizing turnover 
• Increasing upselling and cross-selling prospects 

Delivers High Customer Experience (CX) for Long-lasting Buyer Loyalty

A customer-centric BPO provider can add value to your outsourcing investment. It achieves this by guaranteeing consistently excellent CX for your Phoenix business. So, consider partnering with a provider focusing on customer procurement, retention, experience, and satisfaction.

Superior CX results in better revenue by:

• Offering an exceptional buying experience. Third-party vendors can deliver more precise product or service information by integrating customer or user data. This, in turn, increases consumer confidence and encourages more purchases. These vendors can assist in satisfying your consumers while cultivating a brand reputation.
• Reducing advertising costs. Elevating CX drives sales growth while reducing customer acquisition expenses. With a solid and loyal customer base, you can optimize your marketing budget and reallocate resources to support other strategic initiatives.
• Solidifying brand image. A solid reputation leads to an expanded consumer base. Third-party professionals can improve CX by leveraging innovative customer support solutions, including chatbots, data analytics, and contact center as a service (CCaaS) platforms. These solutions attract more dedicated and varied customers.

Allows Focus on Core Competencies for Long-term Returns 

Teaming up with a BPO provider to manage your Phoenix operations enables you to pay more attention to revenue-generating endeavors. These core processes include developing and launching new products or services, improving current offerings, expanding to other markets, and initiating large-scale marketing campaigns. 

Outsourcing can help build and reinforce your competitive advantage over market rivals. While Greater Phoenix offers a business-friendly environment, competition remains strong due to its growing economy and strategic location. Arizona’s infrastructure can help businesses reach almost 40 million consumers.

Achieving a competitive edge when investing in outsourcing can lead to better revenue, enabling you to:

• Hone customer service for greater buyer satisfaction and brand commitment. 
• Expand the customer base in other locations quicker to form new income sources, reducing your reliance on the local market.
• Infuse more funds into cutting-edge technologies to streamline operations, advancing output, efficiency, quality, and time to market. 
• Boost staff morale by giving extra incentives, bonuses, and training to lower churn rates.

Measuring Outsourcing Investment for Phoenix Businesses: Cost-side 

Consider how delegating processes to a service provider helps lower business expenses,  making outsourcing investment efforts for your Phoenix business effective and rewarding.

Supplies Affordable, Effective Third-party Workers for Bigger Savings 

Acquiring BPO services from providers in the Philippines, Mexico, and other hubs can enhance your outsourcing investment. These locations offer low-cost but efficient third-party professionals for your Phoenix business. 

Phoenix has a diverse and skilled workforce with higher salaries than its counterparts in the Philippines and Mexico. This is due to the difference in living costs. To illustrate, compare the average monthly salary of a bookkeeper, customer service representative (CSR), data entry clerk, bookkeeper, and technical support representative in the three locations (in U.S. dollars).  

Sources: The Philippines and Mexico salary figures from Salary Explorer; Phoenix, Arizona (U.S.) statistics and technical support representative amounts from Indeed. 

As per the data above, your potential cost savings when hiring a third-party bookkeeper in the Philippines is $2,650.43 ($3,016 less $365.57) monthly compared to hiring for a similar role in Phoenix. You can use the same formula to estimate the cost savings for the other positions. 

(Note: The above calculation is for basic illustration. Please contact a service provider for precise salaries and other cost details.)

Shoulders Operating Costs for More Working Capital 

Instead of building and running an in-house team to deal with your back-end functions, outsource them to a BPO provider to save more. Reducing costs with the help of a service provider leads to a better outsourcing investment for your Phoenix business.

Outsourcing lets you minimize expenses in the following areas: 

• Recruitment. With outsourcing, your BPO partner covers human resources (HR) processes and associated costs, including hiring, orientation, and training. It also addresses labor and personnel management issues.
• Physical assets. Phoenix office leases have increased due to pricier construction. Transfer your operations to a BPO provider overseas so you are no longer obligated to rent extra offices. The third-party provider has its own physical and digital resources (e.g., equipment and computer systems).
• Wages. Similarly, salaries in Phoenix are climbing as the competition for employment continues to swell. The service provider can assume payroll and other worker-related costs.

Extends Scalable Operations for Better Cost Control 

Outsourcing offers the flexibility to adjust delegated tasks under changing market conditions. This capability improves cost control, allowing you to maximize outsourcing investments for your Phoenix business.

Partnering with a BPO company grants you access to an exact number of remote professionals, reducing unnecessary expenses. The service provider can also reduce the team size without personnel layoffs since redundant members can be reassigned to other clients or operations as needed.

The BPO provider also excels at addressing surges in task, transaction, or contact volume during busy periods by deploying additional remote workers. Workforce scaling to quickly meet spikes in demand is its forte. 

Furthermore, third-party professionals collaborate with your Phoenix in-house team, enabling workload division. The internal unit focuses on high-value tasks, while the third-party team manages routine and time-consuming activities.

Offers Ample, Skilled Workforce for Stable Wage Costs Over Time

Talent diversity characterizes the Phoenix workforce. However, high workforce demand from thriving Valley businesses led to a tight labor market.

Partnering with a service provider lets you dip into the Philippines’ and Mexico’s deep labor pool of the Philippines and Mexico (check below).

Source: The Philippines and Mexico data are culled from Trading Economics, while Phoenix, Arizona, statistics are sourced from U.S. Bureau of Labor Statistics. The LFPR data for Phoenix was from 2021. 

An abundant workforce translates to affordable wages, stabilizing salary costs in the long run to optimize business investments. 

Fortifies Data Compliance to Avoid Costly Fines

Many BPO providers excel at monitoring government and industry regulations while managing outsourced processes. They can enhance your regulatory compliance to prevent costly penalties. This capability allows you to preserve the outsourcing investment made for your Phoenix business. 

Arizona’s Data Breach Notification Law, the General Data Protection Regulation (GDPR), and the Payment Card Industry Data Security Standard (PCI DSS) are examples of government and industry guidelines. 

Noncompliance might result in legal, financial, and reputational damage. Outsourcing can reinforce your compliance and protect your business from such serious consequences by:

• Detecting and emphasizing potential infractions. The provider employs AI and advanced cybersecurity tools to scan data for regulatory breaches.
• Automating operations. The provider’s cybersecurity solutions expedite data screening and analysis while ensuring compliance.
• Tracking compliance processes. With specialists and technology, the BPO provider monitors all business activities for compliance risks.

Heightens Data Privacy to Prevent Costs of Cyberattacks

Cyberattacks threaten all organizations. The Phoenix e-commerce sector, one of the city’s economic growth drivers, is also at risk. CyberCatch reports that eight out of 10 small business websites in the Valley have unidentified vulnerabilities, exposing them to online intrusions. 

Data breaches can lead to significant monetary losses, disrupting business operations, customers, and profitability. Connect to a service provider specializing in data safety and security to safeguard your financial resources.

Examine the advantages of engaging a BPO provider with solid cybersecurity solutions:

• Better accuracy and capacity. The third-party provider utilizes next-generation cybersecurity tools to monitor a broader range of digital systems and online movements than conventional security systems. 
• Fast crisis detection and resolution. The BPO partner employs competent data security professionals who use appropriate applications and procedures to screen vast amounts of data for suspicious activity and resolve it.

The Bottom Line

Now, you better understand the cost and revenue aspects to help measure the outsourcing investment for your Phoenix business. The next step is to conduct a cost-benefit analysis (CBA). This survey provides a clear, structured method of comparing outsourcing costs versus expected benefits or revenue.  

Additionally, the CBA helps you decide whether to outsource a particular function to a BPO organization or keep it in-house. It allows you to balance the potential advantages against the costs.

Let’s connect if you want to learn more about measuring outsourcing investment for your Phoenix business!