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Recent studies show that emerging companies in Chicago are preparing for growth as the local economy recovers from the pandemic’s adverse effects. Business process outsourcing (BPO) is a popular strategy for scaling businesses, but understanding the dos and don’ts of this approach is vital for its implementation.
This article aims to help local entrepreneurs seeking to partner with a Chicago BPO company for outsourcing. It discusses outsourcing best practices that Chicago startups and small and medium-sized enterprises (SMEs) should consider before collaborating with a service provider. It also explains the hurdles to avoid for a successful outsourcing.
Keep reading to discover more.
Outsourcing Is Growing Among Chicago Small Businesses and Startups
Following the pandemic, small businesses and startups in the Windy City have continually outsourced various processes. According to a survey from UpCity, 82% of small businesses have increased their subcontracting activities since 2020.
The survey also states that 35% of these enterprises have worked with service providers in the last two years. Healthcare services, information technology (IT) management, digital marketing, customer support, administration, sales, and accounting are the most commonly delegated operations.
Additionally, Clutch found that 83% of the 500+ American small businesses it polled plan to continue or expand their outsourcing budget in 2023. Their main goals revolve around growing income, broadening their team, and drawing in new customers to enhance their success.
Despite these rosy figures, outsourcing can be daunting for Chicago entrepreneurs, especially first-timers, who might find navigating the complex landscape and diverse options challenging. It is a critical task that local businesses must plan thoroughly to avoid costly mistakes and regrets.
Outsourcing Dos: Best Practices for Chicago Startups and SMEs
What is BPO‘s role in Chicago startups and small businesses? This strategy provides specialized skills, cost efficiency, resource scalability, technology integration, customer satisfaction, and risk mitigation.
Strategic outsourcing is effective when choosing the right BPO provider. Consider the following outsourcing best practices so your Chicago startup can maximize this business approach:
Specify Goals and Business Parameters Clearly
When outsourcing, one of the best practices that Chicago SMEs and startups should implement at the onset is defining and setting goals.
Outsourcing processes can help Chicago entrepreneurs achieve the following objectives:
- Gaining a competitive advantage to increase profit margins
- Being agile in dealing with unexpected challenges
- Strengthening brand loyalty to encourage repeat purchases
- Cutting operating expenses to generate more working capital
- Obtaining critical technology to improve work processes
- Advancing core competencies to develop a new product or service
After specifying the goals, consider the following points:
- Choose the appropriate third-party team size based on the daily workload or task volumes.
- Pick the communication channels, such as phone calls, live chat, email, social networks, and messaging apps.
- Identify the type of outsourcing, whether nearshore or offshore BPO.
Survey BPO Providers
Thoroughly exploring potential BPO partners is among the outsourcing best practices that Chicago small businesses and startups should perform. According to Clutch, at least 142 third-party contractors offer BPO services in the city.
The BPO sector provides diverse outsourcing services. Consider the following recommendations to locate the ideal third-party vendor:
- Perform a comprehensive evaluation. Collect solid information about prospective BPO partners. Obtain details on their achievements, pricing, and client feedback. Check their websites and independent sources for performance data.
- Analyze outsourcing competence, experience, and insight. Determine prospects’ market tenure and expertise. Short-list those with subject-matter experts familiar with government regulations, sector policies, management systems, and customer needs.
- Partner with a dedicated team. Employing a group dedicated to the outsourced processes ensures top-notch service and delivery. The team typically comprises a project manager and specialists adept at handling various outsourced tasks.
Inquire About the Total Service Cost from Prospective BPO Partners
Learning about the different BPO pricing models is an outsourcing best practice that Chicago small businesses and startups should consider.
The primary motivations for outsourcing processes are to cut costs and save money. To get the most out of this method, request prospective partners’ fees for a particular outsourced activity, including hidden or extra charges. Some will charge more for the additional services they provide. Understand all of their price plans and possibilities.
Pricing plans for service providers vary. Compare them by conducting a cost-benefit analysis of outsourcing. Examine the advantages and disadvantages. Reduce the number of prospects on the list and choose those that will benefit the business most.
Construct a Request for Proposal (RFP) for BPO Candidates
When outsourcing processes, one of the best practices that Chicago SMEs and startups should carry out is drafting and disseminating a solid RFP.
The Chicago business owner seeks pricing quotations from contenders and asks prospects to participate in a bidding procedure. The goal is to get the best service at the best price.
An RFP includes:
- Scope of the work or the procedures
- Solutions for assigned processes
Sending RFPs to short-listed participants helps identify the partner that meets the SME’s pricing, technology, and service needs.
Evaluate and investigate the bids received. Determine the risks, advantages, opportunities, and outcomes. After reviewing everything, choose the best offer and complete the business process outsourcing agreement.
Communicate the Brand’s Overall Character with the BPO Partner
When outsourcing customer service and other related processes, discussing the brand persona with the BPO organization is among the best practices to adopt for Chicago SMEs and startups.
Maximize customer service outsourcing by communicating the brand’s tone and voice. These elements convey the company’s personality and language to consumers, aiding brand recognition.
Provide the BPO partner brand image guidelines for consistent communication across all channels. Maintain a uniform language and voice across touchpoints to establish a personal connection with customers.
The BPO partner’s call or contact center team must build strong relationships, utilizing the brand’s tone and voice to boost loyalty, capture new markets, and enhance revenue.
Monitor Outsourced Operations and Performance
Tracking the progress and status of delegated tasks is an outsourcing best practice that Chicago SMEs and startups should execute.
Supervise outsourced operations to ensure the third-party team’s performance matches expectations and aligns with overall business targets. The standard systems for reviewing output and efficiency are:
- Quantitative. This method evaluates effectiveness using key performance indicators (KPI), including customer satisfaction scores, resolution rate, average response time, and net promoter scores.
- Qualitative. This relates to the third-party professionals’ expertise, communication, and interpersonal abilities.
Regularly assessing these aspects ensures a successful and harmonious outsourcing partnership. It fosters continuous improvement, optimized performance, and alignment with business objectives for sustained growth and client satisfaction.
Foster, Sustain, and Enhance the Relationship With the BPO Partner
When outsourcing business functions to a third-party vendor, one of the best practices that Chicago small firms and startups should enforce is building and improving business relations.
Working with a BPO partner is the beginning of a commitment that can last for a long time, depending on the effectiveness of the collaboration. To guarantee effective outsourcing, the third-party team should act as an extension of the startup. Nurturing the working relationship must be the focus to grow and maximize income.
Regular in-person and online coordination and communication give Chicago entrepreneurs a clearer perspective, especially during a crisis. With continual engagement, problems can be avoided and dealt with appropriately.
Outsourcing Don’ts: Common Pitfalls for Chicago Startups and SMEs
Explore the outsourcing pitfalls to avoid and alternative best practices tailored for Chicago startups and small businesses.
Inadequate Data Protection
When outsourcing operations to a service provider, one of the best practices that Chicago startups and small organizations should aim for is high information security and privacy. They must protect their confidential and essential data while collaborating with third-party vendors.
A BPO company must maintain the security of passwords, addresses, credit card numbers, bank accounts, wages, and insurance information. As such, BPO firms that lack up-to-date cybersecurity technology and data protection rules should be at the bottom of the list of possible partners.
Data breaches or online assaults caused by inadequate data protection can hurt brand image and consumer trust. They might also end in significant government sanctions.
Limited Attention to Communication Channels
Prioritizing different communication platforms is an outsourcing best practice that Chicago SMEs and startups should embrace for their customer service, technical support, and similar processes.
The BPO partner must provide omnichannel or multichannel assistance for faster, more effortless agent-customer interactions. Other essential channels besides phone calls and email include:
- Live chat. This simple method allows customer service staff to swiftly reply to client questions.
- Instant messaging apps. Many consumers and end users rely on WhatsApp, Viber, Messenger, or Signal to contact customer care or tech support.
- Social networking sites. Clients from Generation Z and millennials are the primary users of this channel. These individuals frequently contact businesses through LinkedIn, Facebook, Twitter, TikTok, and Instagram.
Hidden or Unforeseen Costs
When dealing with BPO providers, unexpected charges might emerge. The service provider might bill Chicago clients more than the agreed-upon amount. During talks, not all third-party vendors disclose their full-service prices.
Unanticipated expenses might be difficult to track and budget. The BPO company might ask for a premium for the following situations or additional services:
- Delays in work or operations
- Extrajudicial aid
- Documents or work materials produced and distributed in large quantities
- Staff termination and other personnel incidents
- Labor shortage
- Personnel management and coordination
- Services or technology sharing
- Partnership separation, disagreement, or dissolution
Insufficient Value Attributed to the Team as a Revenue Contributor
Service providers must view call or contact center operations as more than just hotlines or helplines for end users to complain to and ask questions; they must also view them as revenue-generating activities.
A third-party support team’s primary responsibility is to help customers with product or service concerns. It can also aid in a small business’s consumer acquisition efforts. The unit can establish, expand, and keep consumer loyalty.
When consumers are pleased with the service they receive, third-party professionals might persuade them to purchase more. When feasible, customer service agents can upsell or cross-sell.
The staff must strive to gain consumer trust by consistently providing a positive overall customer experience. Strong client connections translate into repeat sales and free word-of-mouth promotion.
When outsourcing processes to a third-party provider, one best practice that Chicago startups and SMEs should consider is opting for next-generation communication and processing tools.
Forward-thinking BPO firms invest in tomorrow’s technology. Service providers must have the following systems:
- Cloud computing allows all call center software and apps to function remotely or via a cloud network.
- Robotic process automation (RPA) allows a software robot to do certain activities, allowing agents to focus on more urgent or vital duties.
- Artificial intelligence (AI) refers to robots that mimic human intelligence. Integrating AI technology into the workflow improves staff performance while lowering costs.
Minimal Language Support
Chicago businesses might struggle to grow internationally if they do not collaborate with bilingual BPO firms. This assistance helps them meet the expectations of customers worldwide.
Multilingual functionalities include speech and text on many communication channels. Email, social networking, texting, and live chat should all have access to language translation tools. Hiring non-English-speaking agents is ideal for verbal interaction.
In particular, Latinos are one of the nation’s fastest-increasing groups. They account for 18% of the population in Illinois. According to the U.S. Census Bureau, they account for over 28% of Chicagoans and are the second-largest racial-ethnic group.
Check out the other benefits of multilingual support:
- Competitive edge. Companies gain a competitive advantage by showcasing cultural sensitivity and accessibility with multilingual support.
- Reduced misunderstandings. Chicago firms can minimize misunderstandings by ensuring accurate information exchange and promoting more precise communication.
- More substantial brand reputation. Non-English-proficient agents can boost company image by demonstrating a commitment to inclusivity through multilingual capabilities.
- Operational efficiency. Multilingual service can improve workflow and service as customer questions are promptly resolved, streamlining communication.
Poor or Restricted Self-Service Features
BPO firms offer self-service choices to help startups keep up with market competition. Third-party agents can provide an excellent customer or client experience with this technology.
A practical and easy-to-use self-service portal aids agents in dealing with frequent client inquiries. They might focus more on handling urgent and complicated concerns during hectic moments.
Self-service features include:
- Online knowledge base
- Product or service tutorials
- Virtual assistants
- Frequently asked questions (FAQ) page
- Chat and messaging
- Online support forum
Explore the advantages of robust self-service options:
- Enhanced customer satisfaction. Instant access to information and solutions fosters a sense of empowerment, elevating customer satisfaction.
- Improved efficiency. Users independently resolving questions reduce dependency on support channels, improving the organization’s overall efficiency.
- Lower expenses. Reduced reliance on support channels decreases operating costs.
- 24/7 accessibility. Self-service options are available anytime, providing convenience and fostering customer loyalty.
The Bottom Line
Outsourcing has surged among Chicago’s small enterprises and startups post-pandemic, with a notable uptick in recent years. Businesses plan to expand their outsourcing budgets in the foreseeable future.
Despite promising statistics, successful outsourcing demands diligence, especially for novices. The dos and don’ts above emphasize goal-setting, partner evaluation, cost management, communication, and technology adoption. Avoiding pitfalls, such as data security lapses and unexpected costs, is crucial.
Adhering to these practices empowers Chicago entrepreneurs’ efficient, growth-oriented outsourcing endeavors.
Let’s connect to learn more about outsourcing tips and best practices for Chicago entrepreneurs and startups!