Understanding the Key Difference Between BPO and Call Centers

Business process outsourcing (BPO) has long been a viable solution for scaling operations and reducing costs. The term “BPO” instantly conjures images of call center agents assisting customers on the other side of the globe.

However, are BPO companies and call centers the same? The answer is… not necessarily!

This article explores the difference between BPO and call centers to help you make informed outsourcing decisions. 

BPO vs. Call Centers: The Main Difference

To know the primary difference between BPO and call centers, ask what BPO is and what call centers are. Understand their definitions:

• Business Process Outsourcing. BPO is the practice of hiring a third-party provider to handle processes, whether front or back-office functions. Companies outsource tasks instead of running them in-house for various reasons. They aim to cut costs, focus on core operations, streamline processes, and grow their businesses.
• Call Center. A call center is a centralized department within a company responsible for managing incoming and outgoing phone calls. Call centers usually handle customer service, sales or telemarketing, and technical support. However, businesses can outsource their call center operations to BPO providers.

The Key Differences Between BPO and Call Centers

Based on the definitions above, BPO and call centers are two different terms. However, they are somehow relevant to each other since an outsourced call center is a subset of BPO.

That said, it helps to ask what a BPO call center is. This type of call center is a third-party provider specifically handling phone-based processes, such as customer service, sales, and help desk.

To dig in further, take a look at the table below.

Let us expound on each of them.

1. Business Goals

A primary difference between BPO and call centers is their purpose. What are your goals for outsourcing to a BPO partner? What are your objectives for establishing or entrusting a call center to a BPO provider?

A business working with a BPO firm usually has holistic operational objectives, including:

• Core Business as the Primary Focus. You delegate non-core functions to an external provider so that you can prioritize core competencies.
• Reduced Costs. You aim to cut operating and labor expenditures through offshore outsourcing.
• Increased Efficiency. You want to access expertise and technology to improve overall efficiency.
• Improved Quality. You seek to establish a quality assurance (QA) team to ensure quality services and business compliance.
• High Customer Satisfaction (CSAT). You aim to leverage modern tools and expert professionals to enhance the customer experience and increase CSAT.
• Long-term Growth and Expansion. You are looking to work with a reputable BPO partner that can help your startup or small business grow and expand.

A call center has specific objectives for particular functions, such as:

• High CSAT. You aim to improve your customer service operations to hit a high CSAT, whether you build an in-house call center or hire a BPO call center.
• Better Reach and Revenue. You seek to establish an in-house or BPO sales team to expand your reach and increase your sales.
• Increased Payment Collections. You plan to build a billing and collections team to collect customer payments and grow your revenue.

2. Level of Involvement

The level of involvement is another difference between BPO and call centers. BPO involves two companies working together towards common business goals. A call center can be in-house or outsourced. Take note of the following:

• BPO. An SME or big company hires a third party to handle some of its processes, whether front-office or back-end functions. In short, BPO involves two businesses and covers a wide range of services. The global BPO market could grow from $0.35 trillion in 2023 to $0.45 trillion by 2027.
• Call Center. A business can establish its in-house call center for its customer-facing operations. However, it can work with a BPO call center to access a customer-centric workforce, advanced technology, and ample resources. The global call center market revenue was worth $27.1 billion in 2022, projected to hit $55.5 billion by 2029.

3. Nature of Services

To understand the difference between BPO and call centers, one must consider the services they offer. 

A BPO firm usually handles all processes:

• Front-office Functions. A BPO company manages inbound and outbound calls and handles customer-facing tasks such as customer service, sales, and tech support. It is not limited to phone calls but offers email and live chat support.
• Back-office Functions. A BPO firm does not only tackle front-office processes; it also covers administrative tasks, such as accounting and finance (A&F), human resources (HR), and information technology (IT) support. It provides business support, such as data entry and inventory management in e-commerce.

A call center deals with phone-based, customer-facing processes:

• Inbound Calls. A perfect illustration of a business function that a call center typically handles is customer service. Representatives receive customer calls, answer questions, process requests, and resolve issues.
• Outbound Calls. Sales and telemarketing are business processes handled by an outbound call center. Salespeople reach out to prospective leads to promote their businesses and sell products or services.

4. Service Delivery Model

To further understand the difference between BPO and call centers, you should look at their service delivery models. 

A BPO has a multi-service delivery model, while a BPO call center often has a single-delivery model. Take note of the following:

• BPO. A BPO company typically serves various clients with different accounts or departments. A particular business can outsource multiple business functions to a single firm. For example, you can entrust your call center operation to a BPO provider, alongside back-office and administrative work.
• Call Center. A call center only covers phone-based operations for customer-facing processes. For example, you can hire a BPO call center to handle your customer service operations. Sometimes, you can also allow it to manage your sales and service technical support.

5. Cost Considerations

Discussing costs helps businesses understand the difference between BPO and call centers. Establishing an in-house call center can be expensive, while hiring a BPO service provider can be cost-effective. 

In fact, Deloitte identifies cost reduction as the top outsourcing reason for most businesses. Let us expound on the difference below.

• BPO. Hiring a BPO vendor allows you to save money long-term. According to Outsource Accelerator, it cuts your operating expenses and labor costs by up to 70%. You need not spend on building infrastructure, investing in technology, and hiring employees.
• Call Center. Building a call center from the get-go is expensive. You must set aside a capital outlay for infrastructure, telecommunications systems, recruitment, and training. That is why most companies choose to outsource their call center operations. With numerous BPO call center jobs available, you have access to a vast talent pool, not to mention technology.

The Bottom Line

Now that you’ve learned the difference between BPO and call centers, BPO involves hiring a third-party provider to handle your front- and back-office processes. Meanwhile, a call center entails tackling phone-based, customer-facing functions.

You can build an in-house call center or outsource it to a BPO service provider. The latter is a feasible option for accessing talent, technology, and resources. Ultimately, the right BPO partner will help optimize your call center operations for business growth and success!

Looking for a call center or BPO service provider? Unity Communications offers outsourcing services to businesses of all sizes. We can help build your call center operations and handle your back-office functions. So what are you waiting for? If you are ready to outsource, let’s connect!