Unlocking Business Potential: Exploring the ROI of Outsourcing in Phoenix

Seeking a business partner for data encoding, bookkeeping, and HR tasks? Phoenix BPO firms offer global support. Outsourcing to Asia/Latin America BPOs can cut costs with skilled staff. Learn more about ROI in outsourcing for Phoenix companies.
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Looking for a business partner to help you with time-consuming, lengthy, and repetitive tasks such as data encoding, bookkeeping, and human resources (HR)?

A BPO company in Phoenix with global connections can assist you with these back-office activities.

BPO providers in Asia and Latin America typically charge affordable service fees due to cost-effective wages while employing a skilled and productive workforce. Partnering with these third parties can help you reduce costs and improve your company’s revenue.

Continue reading to discover the returns on investment (ROI) of outsourcing for your Phoenix organization.

Phoenix as a Prime Business Landscape for Good ROI

Phoenix as a Prime Business Landscape for Good ROI

Cost advantages mainly contribute to a sustainable ROI. Phoenix provides considerable cost-cutting potential for businesses of all types and sizes while offering convenient access to Los Angeles and other progressive Western U.S. marketplaces. 

The following are some significant cost benefits of long-term investments in Phoenix (Arizona) compared to its close competitor, Los Angeles (California).

  • Lower wage rates. The hourly minimum wage in Phoenix, Arizona’s biggest city, is $14.35, while small businesses in Los Angeles pay $16 an hour. The per-hour wage difference of almost $3 is substantial when you employ many workers.
  • Reduced ownership costs. The Greater Phoenix Economic Council (GPEC) reports that the average business costs in the Valley of the Sun are lower by 44% than in California. So, if you spend $10,000 monthly to run a shop in California, you can save $4,400 when operating one in Phoenix.
  • More affordable properties. Real estate development expenses in L.A. are among the highest in the country. Industrial rent in the City of Angels has also increased significantly. Meanwhile, Phoenix has maintained relatively moderate rent increases, enabling you to effectively manage workspace and warehouse costs.
  • More reasonable taxes. Arizona’s corporate tax rate is 4.9%, while California’s is 8.84%. Suppose your annual taxable income in California is $10,000. In that case, the tax in California is $884, while Phoenix imposes a $490 tax for the same business.
  • Decreased construction costs. You might need to invest in warehouses to store your products. In L.A., industrial warehouses cost $165 per square foot to build. The cost is 34.85% lower in Phoenix, or about $57.50. So, if you require a 5,000-square-foot facility, you enjoy about $287,500 in cost savings when building one in Phoenix.

What Does the ROI of Outsourcing Mean for Phoenix Businesses?

Before diving deeper, let us first define the ROI of outsourcing in Phoenix. This term refers to the computation and appraisal of the financial returns that your Phoenix company attains when contracting out specific tasks or operations to a service provider. 

It entails weighing the costs of outsourcing versus the benefits it brings. This calculation is vital in assessing the success of the outsourcing plan and its influence on your company’s total profitability.

Calculate the ROI of outsourcing in Phoenix if you want to stay competitive in a dynamic business landscape. Outsourcing offers significant advantages since it can help improve your local operations’ efficiency, cost-effectiveness, and profitability.

Maximize ROI by Outsourcing Your Phoenix Processes

Maximize ROI by Outsourcing Your Phoenix Processes

So, what is the BPO provider’s role concerning the ROI of outsourcing in Phoenix?

Delegating data entry, help desk, accounting, HR, customer service, and other back-office functions to a business process outsourcing (BPO) provider with offshore operations can be more practical than doing them in-house. 

As your business grows, you might need more expertise and time to handle additional functions and employees. If that is the case, partner with an established BPO company.

Service providers employ qualified professionals and virtual assistants to help you with several tasks. Different outsourcing models, such as offshoring, nearshoring, onshoring, and multisourcing, are available depending on your needs. To maximize the ROI of outsourcing in Phoenix, outsource your processes to the Philippines (offshoring) or Mexico (nearshoring). 

Consider the following benefits when outsourcing to the Philippines for a higher ROI:

Skilled Professionals to Provide Exceptional Outsourced Services 

Excellent ROI is attainable when outsourcing Phoenix-based processes because the service provider has competent and experienced third-party workers. When working with a service provider with operations in the Philippines or Mexico, you get immediate access to a pool of vibrant, technically proficient, versatile, and college-educated workers.

These competent professionals are familiar with the latest technologies, such as social media networks, hardware and software systems, and smartphones. Coupled with their above-average interpersonal skills, they can improve your back-office processes, administrative functions, and similar activities. 

You can gain a robust ROI from outsourcing to these specialists, leading to the following positive outcomes for your Phoenix business: 

  • Better business and brand image
  • Honed market competitiveness 
  • More prospects for upselling and cross-selling
  • Heightened staff morale and lower turnover 
  • Stronger customer retention

Affordable Third-party Workers to Boost Revenue Returns 

Third-party specialists are more than just educated, skilled, and reliable; they are also economical. You can employ cost-effective professionals from reputable BPO providers in the Philippines and Mexico. 

Phoenix abounds with diverse talent, but their salaries are higher than their equally skilled counterparts in the Philippines and Mexico. This is mainly due to the differences in cost of living. Compare the average monthly salary of a customer service representative (CSR), data entry clerk, bookkeeper, and technical support representative in the three areas (in U.S. dollars).  

CountryCSR Data Entry Clerk BookkeeperTechnical Support Representative 
The Philippines $291.39  $262.95 $365.29$399.51
Mexico $738.70 $653.85$878.82$1,297.29
Phoenix, Arizona (U.S.)$4,489  $2,895 $2,994$3,805

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

Based on the amounts, your monthly cost savings when choosing a third-party data entry clerk in the Philippines is $2,600 ($2,895 less $262.95) compared to recruiting for a similar position in Phoenix. You can apply the same formula to get the cost savings for the other roles. 

(Note: The computation above is for basic illustration. Contact a service provider for more accurate salary costs and other important details.)

Knowledgeable in Best Practices to Enhance Outsourced Services 

Businesses can achieve above-expectation ROI by outsourcing. BPO companies use proven methods to offer first-rate outsourced services to Phoenix companies. 

Here are some best practices service providers can apply to acquire a solid ROI from outsourcing for your Phoenix business: 

  • Hire the proper personnel. They hire professionals with above-average soft and technical skills. For soft skills, they choose analytical, persuasive, collaborative, detail-oriented, engaged, empathetic, and creative individuals. For technical abilities, they prefer to hire candidates with certifications. 
  • Concentrate on critical metrics. BPO providers monitor and constantly improve on key performance indicators (KPIs), including abandon call rate, average revenue per client, churn rate, cost of acquisition, first call resolution (FCR), average handle time (AHT), turnaround time, quality of data, and cost per ticket.
  • Utilize relevant technologies, tools, and platforms. Many third-party providers use cloud, omnichannel, and artificial intelligence (AI) to streamline processes and communication. These advanced technologies can drive ROI higher when outsourcing in Phoenix
  • Focus on personalized service. With the help of technology, outsourced professionals can deliver individualized customer service. BPO providers train their CSRs to show politeness, sympathy, understanding, and patience during consumer engagement to garner trust, increase sales, and encourage repeat business. 

Increased Data Privacy to Secure Financial Information 

About 600,000 medical records in Arizona have been exposed to data intruders in the last two years. According to the Office for Civil Rights database, the private information of 20 organizations was compromised, and their cases are under investigation. Sixteen incidents resulted from hacking or related information technology (IT) issues.

Cyberattacks can result in considerable financial losses. To protect your assets and maximize the ROI of outsourcing in Phoenix, collaborate with a BPO provider that prioritizes data safety and security. The third-party provider must have an effective strategy to safeguard your valuable data and ensure data privacy policies are observed.

Check out the benefits of working with a service provider using a solid cybersecurity strategy and advanced technologies to prevent intrusions: 

  • Faster crisis detection and resolutions. The BPO company has skilled data security professionals with relevant tools that can quickly scan large volumes of information for abnormal data behavior and resolve them accordingly. 
  • Better precision and capacity. The service provider employs innovative cybersecurity platforms to monitor more digital networks and online movements than conventional security systems.

Greater Data Compliance to Avoid Expensive Penalties 

Many service providers monitor government and industry regulations while managing assigned processes, improving compliance, and maximizing the ROI of outsourcing in Phoenix. These policies include the General Data Protection Regulation (GDPR) and the Payment Card Industry Data Security Standard (PCI DSS). 

While Arizona lacks comprehensive consumer privacy laws, Phoenix businesses must observe best practices when handling data. Currently, the region depends on the Data Breach Notification Law for its privacy-related regulations.  

Infractions might legally and financially impact your business. Outsourcing can help strengthen compliance measures by:

  • Auditing compliance activities. The BPO provider, with its experts and tools, can track every business activity for compliance issues.
  • Detecting and marking potential infractions. The service provider uses advanced cybersecurity solutions and technologies, such as AI, to examine data for irregularities indicating a regulatory violation.
  • Automating processes. The third-party provider’s cybersecurity systems can speed up data screening and analysis while consistently adhering to compliance standards.

Diminished Operating Costs for More Effective Budgeting 

Expense reduction is one incentive when transferring processes to a service provider, allowing you to optimize the ROI of outsourcing in Phoenix

Examine how outsourcing can help you save money on operating costs.

  • Office area, equipment, and supplies. Partnering with a BPO provider means reduced spending on office spaces, computer systems, and other equipment. 
  • Hiring. The BPO partner pays for tedious and costly recruitment procedures, including job ads, assessments, and new hire onboarding and training.
  • Salary costs. With outsourcing, you avoid shelling out money for salaries, overtime, and tax payments for the extra staff. 
  • Upskilling. Delegating functions implies that the BPO provider shoulders retraining and skills enhancement activities (e.g., seminars and workshops). Third-party workers must improve their skills to address unfamiliar issues. Conducting in-house upskilling costs considerable capital.

Ample Trained Workforce to Deliver Top-notch Outsourced Services 

Finding and maintaining talent in Phoenix will remain a significant concern as the city’s economy expands. Increased competition for professionals is inevitable as more firms relocate to the area.

In contrast, accessing a diverse pool of resources is easy with outsourcing. Many Filipinos and Mexicans over 15 are determined to get a job. The labor force participation rate in the Philippines is 65.3%, and Mexico’s is 60.12% (check the table below). 

CountryEmployed PersonsUnemployed PersonsPersons Available to WorkLabor Force Participation Rate 
The Philippines 47,801,4902,089,89049,891,38066.6
Mexico 59,403,9471,825,19661,229,14359.87

Source: Trading Economics 

A vast pool of accessible third-party labor can help your business, translating to affordable wage spending. Salaries stay stable with an abundant workforce, allowing you to maximize the ROI of outsourcing in Phoenix.

How to Find the Most Suitable BPO Partner for Outsourcing 

How to Find the Most Suitable BPO Partner for Outsourcing

At this stage, you might be wondering how to get the ideal BPO partner to help you boost efficiency, lower costs, and improve profits, optimizing the ROI of outsourcing for your Phoenix business. 

Consider these five points before working with an outsourcing company: 

  • Stellar performance. An excellent track record demonstrates a BPO provider’s competence and consistency. Pick an offshore outsourcing company with a long list of happy clients. The potential partner must be client-focused, regardless of your size or niche. It must prioritize your needs while providing timely and accurate services.
  • Full-service costs. Collaborate with a service provider, showing all its fees. Business transparency promotes goodwill. Obtain quotes from each potential partner and develop the most cost-effective strategy to maximize the ROI of outsourcing for your Phoenix company. 
  • Verified results. Start with a short project before offering an extended partnership. Check how the provider compares to your standards and goals. Measure its output and service quality quantitatively (using KPIs) and qualitatively (using soft skills and knowledge assessment). 
  • Tight data security. Your Phoenix company likely processes sensitive data, including customer financial details. Engage with a third-party provider that offers cutting-edge cybersecurity solutions against data breaches. 
  • Effective management control. Select a BPO company prepared to follow your internal procedures to retain control over the outsourced functions.

The Bottom Line

Outsourcing allows your business to focus on areas that enhance its competitive advantage. Your organization can shift more time and effort to income-building initiatives, such as launching new marketing campaigns, producing better products or services, and investing in research and development. 

However, this strategy has challenges. One is that transferring operations entails sharing private information about your customers or clients with the service provider. Discuss this matter with the potential partner. Sign a confidentiality agreement for better information control. 

Let’s connect if you want to learn more about the ROI of outsourcing in Phoenix!

Picture of Rene Mallari
Rene Mallari considers himself a multipurpose writer who easily switches from one writing style to another. He specializes in content writing, news writing, and copywriting. Before joining Unity Communications, he contributed articles to online and print publications covering business, technology, personalities, pop culture, and general interests. He has a business degree in applied economics and had a brief stint in customer service. As a call center representative (CSR), he enjoyed chatting with callers about sports, music, and movies while helping them with their billing concerns. Rene follows Jesus Christ and strives daily to live for God.
Picture of Rene Mallari

Rene Mallari

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