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Organizations in Chicago often find their resources and capabilities exhausted to keep up with the city’s competitive landscape. Many local companies use business process outsourcing (BPO) to meet growing demands.
When should your firm consider outsourcing? This article discusses the signs suggesting it is time to partner with a Chicago BPO company. It also explores the benefits of outsourcing and the industries that commonly utilize the service. Keep reading to learn more.
1. Limited In-House Expertise
When internal teams attempt to handle excess tasks outside of their expertise, they take longer, spend more resources, and reduce the quality of results. Requiring additional and more specialized talent is a compelling sign that you are ready to outsource.
How Outsourcing Helps
According to the U.S. Bureau of Labor Statistics (BLS), Chicago has a low unemployment rate and a steady annual job gain rate. These conditions make it challenging to attract and retain qualified professionals. However, outsourcing providers access a global talent pool so they can secure and sign experts for your Chicago company’s account.
Third-party vendors screen and train team members to ensure they have the experience and skills to perform industry-specific functions at a high standard. BPO teams typically cover a wide range of front-office and back-office processes, including:
- Customer support
- Call center services
- Data entry and processing
- Accounting and bookkeeping
- Human resource (HR) administration
- Email and digital marketing
- Information technology (IT) support
- Software development
- Medical billing and coding
- Medical transcription
- Patient support
- Regulatory compliance
2. Technological Constraints
Organizations must invest in continuous technological advancements and expertise to succeed in the fast-paced digital corporate landscape. But such resources can be expensive, especially for small to medium-sized businesses (SMBs).
Additionally, the high cost of living in Chicago makes it difficult to request loans as banks impose stricter qualifications and higher interest rates. This inability to acquire sophisticated technology can hinder the growth of your local company.
How Outsourcing Helps
One of the leading BPO trends and predictions is the continued shift toward digital transformation. Thus, outsourcing providers are among the companies constantly leveraging the latest tools and signing up for advancements in artificial intelligence (AI). They use their technology and knowledge to boost the processes of Chicago clients and companies.
These providers carry tools for their specialized industries, whether healthcare, e-commerce, or finance. They also employ technologies essential for streamlining administrative and customer support tasks. Here are some of the tools and software they leverage:
- Customer relationship management (CRM) systems
- Communication and collaboration tools
- Robotic process automation (RPA)
- AI and machine learning (ML)
- Cloud-based solutions
- Security and data management tools
- Business intelligence (BI) and analytics
- Quality management systems
- Language translation and localization tools
Reliable outsourcing firms with long track records may also carry emerging technologies such as blockchain, virtual reality (VR), and augmented reality (AR).
BPO companies use technologies based on size, focus areas, and client requirements. Nevertheless, they carry tools that improve efficiency, optimize costs, and deliver high-quality, scalable services.
3. Overwhelmed Internal Resources
The lack of specialized expertise and technologies often increases workloads that strain internal capabilities. This situation requires staff to work longer hours, which could lead to:
- Significant employee burnout
- Delayed output
- Costly mistakes
- Higher labor turnover
According to Microsoft’s 2022 study, 24% of workers quit their jobs due to poor work-life balance. The City of Big Shoulders may experience such conditions, especially with its competitive business landscape. BLS reported that Illinois had a 2.3% job quit rate as of August 2023, equivalent to the national average.
You might need to outsource tasks to avoid further repercussions if you see these signs manifest in your Chicago company. Operating as usual despite having overwhelmed or limited internal resources can impact revenue and customer satisfaction, costing your organization more in the long run.
How Outsourcing Helps
With more staff and technologies acquired through BPO partnerships, you can exclude your internal resources from handling non-core tasks. No matter the industry, outsourcing allows you to attend to activities that directly affect your customers and your business’s growth.
Core competencies generally encompass the following objectives:
- Research and innovation
- Market expansion
- Operational excellence
- Service quality
For example, outsourcing call center services ensures the efficiency and quality of related processes. BPO firms can also provide contact-center-as-a-service (CCaaS) solutions, a cloud-based infrastructure that further optimizes customer service tasks.
Thus, they empower their clients to focus on primary business matters, such as improving their products and services. This ability is one of the reasons why call center outsourcing is popular. 360 Research Reports expects the global contact and call center BPO market to grow to $107.21 billion by 2027.
Unity Communication’s Wireless Watchdogs case study perfectly demonstrates the benefit of outsourcing. Off-loading tasks alleviated in-house teams from the burden of increasing workloads.
4. Low Profitability
Effective financial management is crucial for the success of any business. Overhead, infrastructure, equipment, and labor costs could hinder your local business’s profitability. It can cause missed opportunities that limit your ability to invest in growth and innovation.
Outsourcing may be viable if the signs indicate your Chicago company is experiencing cost inefficiencies. This situation occurs when expenses associated with particular functions are disproportionately high compared to industry benchmarks.
Aside from the factors previously mentioned, other indicators you should look out for include:
- Recurring cost overruns
- Minimal progress in profitability goals
- Declining operational efficiency
How Outsourcing Helps
Significant cost reduction is a well-known benefit of partnering with a BPO company. A report by Zippia found that 59% of businesses outsourced to cut expenses. Many factors contribute to this advantage, including:
- Minimized overhead. Outsourcing typically involves working with remote professionals. With work-from-home arrangements, you can forgo costly office rent, equipment, and utilities for BPO teams. The practice also reduces hiring, onboarding, training, and benefits expenses since most service vendors cover these costs.
- Lower labor costs. Partnering with a provider that operates in areas with lower living expenses than Chicago offers reduced wage ranges. For example, businesses outsourcing to the Philippines cut labor costs by 70%. Cost differentials benefit local companies, especially considering the Wind City’s high compensation rates.
- Reduced technology investments. Since providers leverage industry-specific technologies and infrastructure, you can avoid expensive purchases. For example, the range of CCaaS solutions that outsourcing firms provide makes it a practical approach to customer service. It is one of many reasons to consider outsourcing call center services.
You can reallocate the resources you saved from outsourcing towards other aspects of your business. This step helps enhance cost efficiency, ensuring your company generates more revenue than it spends.
5. Inflexible Operations
Businesses often experience workload fluctuations due to seasonal demands, project-specific requirements, or complex market dynamics. However, limited resources can make it difficult for organizations to accommodate changing volumes.
Hiring full-time employees for extra help can cost more since it can lead to overstaffing. Instead, consider outsourcing tasks that often show signs of fluctuations in your Chicago company.
How Outsourcing Helps
Partnering with a BPO provider gives your business flexibility and scalability without the commitment of employing full-time staff. Outsourcing teams are readily available and can be deployed as needed.
Additionally, the tools and software leveraged by service vendors enable you to process tasks efficiently and accurately, even during volume surges. By scaling operations and meeting changing demands without incurring additional costs, your business can grow sustainably.
Outsourcing also helps you maintain scalability and flexibility through the following features:
- Global market insights. BPO providers operating in multiple countries deeply understand their local markets. Their connections and data provide insight into customer behaviors, economic trends, cultural nances, and local regulations. Thus, expanding your reach becomes easier.
- Round-the-clock operations. The advantage of leveraging time zones in outsourcing is that it provides you with a 24/7 team. Whether customer service or technical support, operating beyond regular business hours reduces downtime, allowing your business to identify and mitigate risks at any time.
- Multilingual team. Partnering with a BPO provider with operations in countries that speak two or more languages offers this benefit. Additionally, access to a global talent pool entails acquiring professionals of all languages, backgrounds, and cultures. They have in-depth knowledge of nuances and communication styles in local dialects.
6. Poor Data Protection and Compliance
Businesses in the Windy City face complex compliance and security requirements. Those in highly regulated industries like finance and healthcare follow even stricter ones.
Navigating these regulations can be challenging and time-consuming. Your internal team might lack the skills and resources to implement and maintain robust data security and compliance measures.
Managing all business assets in-house increases the risk of data breaches and cyberattacks. These situations lead to security and compliance violations, damaging your business’s financial health and reputation.
How Outsourcing Helps
Outsourcing functions like legal or compliance processes and assigning them to experts can help your Chicago company navigate regulations effectively. BPO providers also invest in advanced data security technologies and infrastructure to help you ensure compliance with applicable laws, including:
- Internal Revenue Code (ICR)
- Fair Labor Standards Act (FLSA)
- Federal Insurance Contributions Act (FICA)
- Health Insurance Portability and Accountability Act of 1996 (HIPAA)
- Gramm-Leach-Bliley Act (GLBA)
- Federal Trade Commission (FTC) Act
- Children’s Online Privacy Protection Act (COPPA)
- Illinois Personal Information Protection Act (PIPA)
- Illinois Biometric Information Privacy Act (BIPA)
- Illinois Health Care Information Confidentiality Act (HICI)
- Chicago Personal Data Collection and Protection Ordinance
Industries Where BPO Has Proven Advantageous
The City of Big Shoulders’ dynamic and competitive business environment makes partnering with a BPO provider attractive. Its many benefits, services, and features make it widespread across organizations of all sizes and types.
According to Grand View Research, the global BPO market was valued at almost $262 billion in 2022 and can expand by 9.4% by 2030. These numbers are proof of outsourcing’s potential, and they might be the sign your Chicago company is looking for.
If you are still trying to figure out how the practice can support your organization, below is a breakdown of common industries that benefit from outsourcing:
- Healthcare. Outsourcing streamlines medical billing, coding, and transcription. This efficiency minimizes errors and claims denials, leading to significant cost savings. It also improves patient care through 24/7 support, appointment scheduling, and remote monitoring. These features free up clinicians for direct patient care.
- Finance and banking. The technologies used by BPO providers automate back-office tasks, such as accounting, payroll, and transaction processing. Financial experts and accountants can help enhance fraud detection, strengthen security measures, and minimize financial risks. Ultimately, outsourcing boosts efficiency and accuracy.
- Technology and software. IT outsourcing teams include skilled developers and testers. They can manage core and non-core technical tasks like network monitoring, data backup, software development, and cybersecurity. Their 24/7 availability accelerates processes and time-to-market, improving businesses’ overall technical operations.
- Manufacturing and logistics. BPO teams can manage procurement, inventory, and warehouse operations. They also have expertise in quality control and inspection. Delegating these tasks increases the efficiency of order fulfillment, packaging, and shipping processes, ensuring timely and accurate deliveries and minimizing costs.
- E-commerce. Online retailers outsource customer service, order processing, and data entry to ensure scalable and flexible operations. This approach also helps them reduce payroll, employee benefits, and infrastructure costs. The 24/7 support BPO providers offer also benefits growing industries such as e-commerce.
The Bottom Line
Outsourcing can be advantageous, and recognizing the signs of its necessity can help your Chicago company maximize its benefits. If you are experiencing resource constraints, cost inefficiencies, and scalability and security issues, then you might need a BPO team’s help.
While outsourcing may not be a universal solution, understanding these key indicators can help you make informed business decisions. You will know how to strategically delegate certain functions to optimize operations, access specialized expertise, and stay ahead of the local competition.
Let’s connect if you want to learn more about outsourcing and how your business can benefit from it.
