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Companies work with reputable business process outsourcing (BPO) providers due to their many benefits, from optimizing operations to reducing costs and more.
However, BPO is not a perfect and magical solution. Business leaders should ask about the strategy’s limitations before agreeing to make informed outsourcing decisions.
BPO offers plenty, but it is important to manage your expectations. This page covers the real advantages of outsourcing. It also aims to help you avoid false advertising by deep diving into the benefits not included in the strategy.
Read on to learn concrete solutions for addressing BPO limitations.
What the Advantages of Outsourcing Do Not Include
Companies study what BPO is and capitalize on it as a business strategy for accessing expertise, technology, and resources. They outsource to optimize operations and reduce expenditures. However, outsourcing is not the panacea for solving problems and meeting business objectives. It also comes with possible challenges and risks that businesses should prepare for.
Business executives and decision-makers must recognize the disadvantages of outsourcing. By weighing the strategy’s pros and cons, they can make sound decisions for the good of their business.
Here are a few points not included in the advantages of outsourcing:
1. Full Business Control
The advantages of outsourcing do not include maintaining business control. BPO means entrusting parts of your operations to third-party service providers. The problem starts when you no longer take ownership of your business functions, which can become a recipe for disaster!
How to Gain This Advantage: To maintain business control, hire a BPO partner with the same values, ideals, and philosophies. Align your business goals and work together to achieve them. Doing so requires regular communication and collaboration.
2. Manageable Staffing
In most cases, the advantages of outsourcing do not include a manageable staff. Usually, you entrust the recruitment process, training programs, and production support to your BPO service provider. You might employ a workforce that does not fully understand your business or wholly support your customers.
How to Gain This Advantage: Give your BPO staff a sense of importance and autonomy by treating them as indispensable to your company’s success. Engage with your BPO staff as often as possible, recognize good performance, and give awards.
3. Robust Management
The advantages of outsourcing do not instantly include a solid management team. However, outsourcing success often depends on your BPO provider’s management team. You might confront business conflicts and chaos if you do not establish good relationships with them.
How to Gain This Advantage: Start by creating a detailed service-level agreement (SLA) with clear key performance indicators (KPIs) for your BPO provider to follow and meet. Build good relationships with its operations management team to establish a strong business partnership.
4. Solid Communication
The advantages of outsourcing do not automatically include solid communication. Due to geographical distance, time zones, and cultural differences, your business might encounter communication barriers. Such barriers can lead to potential miscommunication, conflicts, and work delays.
Unfortunately, 86% of employees and executives believe that poor communication and collaboration are the primary causes of failures in the workplace.
How to Gain This Advantage: Effective communication is the key to business success. Ensure constant communication and collaboration with your BPO provider. Take advantage of digital tools and technologies for seamless interactions, such as a unified platform as a service (UCaaS) solution.
5. Cultural Compatibility
The advantages of outsourcing do not include instant cultural affinity with service providers. Most companies employ offshore outsourcing to save money; however, they might encounter cultural differences throughout the engagement. Disagreements and conflicts might arise if you are not aware of these differences.
How to Gain This Advantage: To ensure cultural compatibility, choose an outsourcing destination with a similar culture. Providing cultural orientation and training is also good to ensure both parties accept each other’s cultural differences.
6. Guaranteed Privacy and Security
The advantages of outsourcing do not include complete privacy and security. BPO, particularly in data science, means entrusting your business data, processes, and systems to a third-party service provider. Without robust data privacy policies and security protocols, your vendor might expose your business information, including sensitive customer data, to physical and cyber attackers, not to mention the potential for internal leaks. This can lead to financial losses, reputational damage, and even legal repercussions.
How to Gain This Advantage: What better way to ensure privacy and security than by establishing data privacy policies and network security protocols? Hiring a reputable BPO partner is critical to ensuring these measures and minimizing risks.
7. Business Continuity, Stability, and Sustainability
The advantages of outsourcing do not include a stable BPO operation. You might encounter business disruptions when working with an offshore provider. Hiring the wrong vendor might also lead to business problems and contract termination. That is why outsourcing is seldom sustainable in the long term.
How to Gain This Advantage: Choosing a BPO provider best suited for your business type, size, needs, niche, and budget is vital to a long-lasting partnership. Work together towards the same business goals to establish a stable and sustainable outsourcing engagement. Should there be business disruptions, ensure you have contingency plans in place.
What the Outsourcing Advantages Include
BPO has become a growing business strategy for streamlining operations and reducing costs. However, it offers more than these two primary benefits. After discussing the limitations of outsourcing, discover its actual benefits below:
- Significant cost savings. Cost reduction has always been the top outsourcing reason. Companies are looking to cut their labor and operating expenses through offshore BPO, allowing them to save money in the long term.
- Prioritized core competencies. Maintaining a focus on core business operations is the most commonly perceived reason for outsourcing. Businesses delegate their non-core functions to BPO providers to save time, energy, and resources. They can prioritize their core competencies to gain a competitive advantage.
- Accessible talent and technology. Some companies lack human or technological resources. They can access these resources through outsourcing. About 33% of small businesses outsource to leverage flexible resources, while 26% seek to work with experts.
- Increased efficiency and productivity. Outsourcing gives businesses access to real expertise and modern technology. These two factors can help them improve their overall efficiency and productivity. For instance, a trained workforce and process automation can make work faster and yield productive outputs.
- Improved quality and compliance. Most BPO providers consist of quality assurance (QA) teams and strictly follow SLAs. They ensure quality services and business compliance.
- Enhanced customer satisfaction. Reliable BPO firms usually comprise customer-centric teams handling front-office functions, such as customer service. They have one goal in mind: to leave customers happy and satisfied. Hence, expect them to hit the most important key metric—customer satisfaction (CSAT).
- High business profitability. Reputable BPO providers can help companies meet their KPIs. Improved service efficiency, quality, and CSAT can lead to one goal: a profit boost. You will be surprised at how your BPO partner can help increase your profitability for business growth and expansion!
The Bottom Line
The BPO industry proves advantageous in many ways. However, the advantages of outsourcing do not include those mentioned above. The outsourcing sector poses possible challenges and risks to businesses looking to outsource.
As a business leader and decision-maker, recognizing these disadvantages and finding ways to address them is important. Consider the concrete solutions presented above to turn possible drawbacks into benefits. By doing so, you can unleash the full potential of outsourcing!
Ready to take advantage of the BPO benefits? Work with a reliable BPO provider, such as Unity Communications. We are committed to streamlining your operations and helping your business succeed. Let’s connect today to get started with our outsourcing partnership!