Efficient Business Operations in Phoenix: Streamlining Infrastructure and Office Expenses Through Outsourcing

Many businesses are overburdened with their long list of tasks. One solution they consider to resolve this problem is to work with a BPO company in Phoenix.

Outsourcing frees up your internal staff for more critical functions, such as growing your business and developing new products and services. More importantly, it helps you save on infrastructure and office expenses.

Regardless of your size, you can reap the benefits of cost-effective and efficient business operations in Phoenix through outsourcing. Read on to learn more.

Outsourcing as a Strategy to Reduce Infrastructure and Office Expenses

Due to its lower corporate income taxes and regulatory burden, Phoenix has been dubbed the second-best city to launch a startup or business. However, even with these considerations, companies might struggle to hit the ground running with limited capital. Every penny counts, and outsourcing’s role is to help maximize savings.

Calculating the exact amount you can save by outsourcing can be challenging. According to the International Organization for Standardization (ISO), this strategy can help businesses cut back an average of 15% of their costs. However, it is also known to save companies up to 70% or even 90% of labor costs, depending on the location of their provider. 

The actual savings vary based on the function, the complexity of the project you want to outsource, and other changes you plan to apply in-house. According to the Harvard Business Review, you could get up to 20% to 30% cost reductions by subcontracting back-end processes, such as accounting, information technology (IT), recruitment, and data entry.

Outsourcing providers are moving from their legacy role as vendors to actual business partners. With advanced technology, scale, and capital, these reliable providers give their clients opportunities to significantly lower costs and benefit from complementary services over the long term.

How Efficient Third-party Business Operations Lead to Reduced Costs

To start, what is business process outsourcing (BPO)? This strategy involves hiring a third-party vendor to perform functions typically done by internal teams.

With outsourcing, you move portions of your workload to an expert service provider more capable of managing the task. Optimizing your processes this way lets you avoid costly workplace blunders such as red tape, employee complacency, and redundancy. Hiring third-party workers also comes with lower wage costs compared to Phoenix’s $110,000 average salary.

According to Deloitte, most companies subcontract to save on costs. Here is how clients achieve efficient business operations through outsourcing, thereby reducing their infrastructure and office expenses.

Investing in Training and Development

Trustworthy service providers invest heavily in employee training and development, ensuring workers are current on industry trends and standards. Well-trained agents can help you increase your first-call resolution (FCR) rate, lower call handle times, and minimize the need for additional staffing in the call center. 

These factors improve customer satisfaction. Businesses can enhance their cash flow when they do not lose money from unhappy customers and lost opportunities. Outsourcing highly skilled professionals also saves companies from having to train workers themselves. 

Analyzing and Minimizing Attrition

A high attrition rate negatively impacts business finances. It requires a company to allocate significant costs to cover hiring, recruiting, and training new employees. When you outsource, the external professionals are the BPO firm’s employees, not yours. Hiring and retention are the provider’s responsibility, and you can save time and money from labor-related expenses.

You can accomplish efficient business operations through outsourcing because vendors analyze their team’s churn rate and apply targeted strategies to address it. With higher employee retention, you are more likely to start and end a project with the same staff, which is crucial for keeping institutional knowledge.

Leveraging Data-powered Insights

Using data-powered insights helps determine areas for improvement and inefficiencies in your operations. Setting performance metrics and analyzing data that meet or exceed the threshold helps identify patterns and trends contributing to higher costs. This insight allows you and your BPO partner to plan ways to reduce expenses and optimize processes.

Using data and insights as strategic company assets, businesses can scale or drive digital transformations and encourage more cost savings, higher revenues, and overall expansion. 

Data helps companies monitor trends and make smarter predictions, enabling informed decision-making. Reports from McKinsey show that data and analytics initiatives contribute at least 20% to earnings before interest and taxes (EBIT).

Optimizing Workforce Management

Labor is the most significant cost contributor. Outsourcing reduces this expense by optimizing your workforce management practices. The third-party vendor implements workforce management software and an efficient scheduling system to help you avoid understaffing or overstaffing. Others also supply skilled remote professionals, further minimizing costs.

Workforce management is crucial to achieving cost-effective and efficient business operations through outsourcing. So, find a provider that can perform effective employee scheduling, performance monitoring, and targeted training programs. Ensure it also utilizes advanced tools such as workforce management software and big data to optimize staffing levels.

Embracing Artificial Intelligence (AI) and Automation

Outsourcing firms integrate AI and automation tools into your assigned processes, giving you access to advanced technologies while saving costs. Integrating AI-enabled programs such as virtual assistants and chatbots helps handle repetitive work more efficiently, leaving human agents free to work on more complex problems.  

Moreover, automating routine processes reduces costly human errors. Boston Consulting Group (BCG) notes that AI reduces 20% of conversion costs, with up to 70% cost reductions from increased workforce productivity.

However, AI is often time-consuming, expensive, and unviable for most small businesses and startups. Outsourcing is the best way to access technology without breaking your wallet.

Using Cloud-based Tools

Cloud-based solutions such as a contact center as a service (CCaaS) help save considerable infrastructure costs. Cloud solutions offer pay-as-you-go, scalable pricing plans that enable you to pay only for the resources you use, removing the need for expensive on-site hardware and maintenance.

Following a report by BCG, businesses can save 15%–40% on infrastructure expenses by moving to the cloud. The savings can even be greater for some companies. Moving legacy or on-site infrastructure, such as servers and data storage, to the cloud can alter your workflow. You can guarantee cost savings and upgraded information technology infrastructure.

Implementing Deflection Strategies

Call deflection strategies and self-service options such as chatbots and interactive voice response (IVR) systems help reduce ticker volume and call center costs. However, small businesses often cannot afford to integrate such systems.

One solution to achieve efficient business operations is to acquire these systems for a fraction of the cost through outsourcing. Providers implementing deflection strategies save money by minimizing their reliance on human agents and providing customers with quick responses. They can then pass on the savings to you through a lower service charge.

Optimizing Call Distribution

Effective call routing is one of the key differentiators between satisfied and unsatisfied customers. Call routing answers inbound calls and connects them to the appropriate agent or team. It ensures each customer gets answers and will repeatedly purchase from your business.

Efficient call routing is vital to lowering costs. You can tap an offshore BPO provider to implement skill-based routing to guarantee customer inquiries are connected to the right agent, improving FCR and reducing downtime. FCR is a great indicator of your company’s responsiveness and operating cost efficiency.

An optimized call routing system ultimately lowers office costs and increases customer satisfaction.

Minimizing Average Handle Time (AHT)

One of the main goals of providing customer support is to effectively handle as many calls as possible without wasting time. However, incompatible interfaces and insufficient agent training can increase the AHT, leading to higher costs.

Reducing AHT is vital to minimizing call center costs. By monitoring and assessing your AHT, you can determine opportunities to optimize processes and improve agent productivity. BPO companies equip agents with effective training, resources, and tools that can help them resolve customer issues more quickly, reducing AHT and lowering overall costs.

Examples of Infrastructure-related and Office-related Expenses That Outsourcing Minimizes

Outsourcing minimizes infrastructure-related and office-related costs in many ways. You can leverage the best resources, talent, and technology at a fraction of the cost by choosing the right back-office outsourcing provider.

Here are examples of expenses that outsourcing reduces, if not eliminates.

Fewer Employees

Hiring internal staff means paying for their salaries, training, benefits, health insurance, and more. Hiring full-time is also risky because employees may leave your company at any time. A full-time employee is sometimes seven times more expensive than a third-party professional.

Outsourcing reduces the number of employees you need to hire. The external workers you contract are not your employees. Moreover, BPO companies tend to have lower overhead because they leverage offshore operations, passing on the cost savings to you.

No Recruitment, Training, Onboarding, and Retention Costs

Hiring employees is expensive because additional expenses, such as training and onboarding, add up. Fewer employees means less training, onboarding, and retention are required.

Onboarding is among the most common costs associated with recruiting full-time employees. The related initiatives can cost more than the employee’s yearly salary, excluding the time and money spent on training resources and hiring managers.

Once you factor in the total costs of hiring and training an employee, the ROI of outsourcing becomes more evident.

Less Equipment and Workspace Needed

Outsourcing a portion of your business process means you require less space, equipment, and software licensing fees in your office. 

Let us illustrate this benefit further. From 2022 to 2023 alone, noncommercial construction costs in Phoenix have risen by 6.3%. Businesses hoping to expand face high costs when building or renting additional offices. In contrast, third-party workers often work at the service provider’s office or from the comfort of their own homes, reducing the need for office space.

The BPO partner also manages the costs of laptops, server space, and employee overhead on your behalf. You can pay a single service fee to get the people and equipment you need to support your business.

The Bottom Line

Minimizing expenses without sacrificing service quality is a delicate balancing act. By partnering with a reputable outsourcing provider, you can implement the strategies above to reduce infrastructure- and office-related expenses.

Outsourcing makes achieving efficient business operations easier, enhancing customer satisfaction and unlocking your company’s full potential.

Are you looking for an outsourcing partner that uses data-driven insights, monitors performance continuously, and prioritizes employee training and development to ensure long-term success? Look no further!

Let’s connect to discuss how Unity Communication can help you stay ahead of the curve.