Written by Dion Jay Tality
Business process outsourcing (BPO) is an effective strategy for saving money and boosting productivity.
Offshore outsourcing, in particular, is best for reducing costs and improving services. Hiring the right offshore outsourcing company is essential to avoiding this business strategy’s possible risks and challenges.
So how do you go about choosing the right offshore provider? Continue reading to learn practical tips for managing your outsourcing project.
How To Choose the Right Offshore Outsourcing Company for Your Business
With the advent of globalization, outsourcing has become a proven strategy for scaling operations, streamlining processes, and growing businesses. To better understand what BPO is, think of it as entrusting your tasks to a reliable third-party provider.
Companies should capitalize on the BPO market’s continued growth. The global BPO market could grow from $280.6 billion in 2023 to $525.2 billion, expanding at a compound annual growth rate (CAGR) of 9.4%.
Among the different types of BPO, offshore outsourcing is best for cost savings and business scalability. Some leading offshoring destinations are the Philippines, India, and China. However, your outsourcing success still depends on your chosen offshoring company.
To choose the right BPO provider for your business, follow these steps:
1. Define Outsourcing Goals and Needs
Every company has goals—mainly to generate money and grow the business. Companies start thinking about outsourcing because they encounter operational challenges and must address business needs. However, you must dig deeper and get to the bottom of these problems.
Start by conducting a thorough examination of your business. Identify inefficiencies, bottlenecks, and underlying issues. Do you lack expert talent, modern technology, and available resources? Do you have low customer satisfaction (CSAT) scores and high customer complaints? Such questions allow you to determine which processes to outsource and your outsourcing goals and requirements.
2. Research Potential Outsourcing Companies
Once you have set your outsourcing goals and requirements, it is time to look for the right offshore outsourcing company. Start searching for BPO service providers online based on your preferred offshore locations. Create a list of prospective offshore providers when you perform your research.
You can also get recommendations from other businesses or professionals. They might already work with outsourcing partners in the Philippines, India, or other destinations. They can refer you to reputable providers that do wonders for your business.
3. Check Experience and Expertise
Once you have a list of prospects, the first two factors to check are experience and expertise. Consider offshore providers who specialize and have experience handling the services you need. Make sure they have worked with clients in your niche or industry.
When it comes to experience, strike a balance between longevity and quality. Ensure your potential providers have an excellent BPO track record. Guarantee expertise by choosing an offshore provider specializing in the services you need. Whether customer service, information technology (IT) support, or accounting, the right provider should handle your processes effectively and efficiently.
4. Evaluate Communication and Project Management Skills
Aside from experience and expertise, two aspects are crucial in outsourcing: communication and project management. As you know, communication is almost always the key to business success. Meanwhile, a BPO management team can be instrumental to your BPO’s success.
First, consider offshore providers prioritizing open lines of communication. They must establish protocols for regular check-ins, meetings, and reporting. Second, opt for a BPO firm with a strong management team since it bridges you, the client, and the provider’s workforce. The right offshore outsourcing company can make a difference in your outsourcing success.
5. Assess Data Security and Confidentiality Measures
Outsourcing brings two companies together toward common business goals. However, it also means entrusting your business and customer information to a third-party provider. Your hired provider might expose this data to physical and cyber attackers. The risk is even higher when you work with an offshore provider.
What better way to address this problem than to work with a reputable BPO firm? Make sure your chosen provider has the latest technology and network security protocols. It should also establish data privacy policies for confidentiality and protection. Ultimately, strategic outsourcing entails minimizing your risks.
6. Consider Pricing and Contract Terms
Let us return to the primary question: why do most businesses employ offshore outsourcing? They work with offshore providers in the Philippines, India, and even Latin American countries to reduce labor and operating costs.
As such, check your prospects’ pricing structures, whether fixed price (FP), staffing, or time and materials (T&M) models. Obtain requests for proposals (RFPs) to compare outsourcing costs. Remember that your offshore outsourcing company should help you save money in the long term.
7. Conduct Reference Checks and Ask for Testimonials
In the world of business, reputation is everything. You want to work with a BPO service provider with a good reputation. A provider with a negative image can negatively influence your business and drive your customers away.
Start checking for reputation by asking about your prospects’ credentials, such as business licenses, standard certifications, and even BPO awards. You should also check their websites and review their case studies. Lastly, read client feedback through online reviews, testimonials, and references.
8. Hire the Right Offshore Provider
After your screening process, the final step is to hire an offshore outsourcing company. The ultimate goal is to find the right offshore BPO company to help your business grow and succeed.
Here are a few things you need to consider:
- Meet your outsourcing requirements. Your chosen provider should meet your outsourcing requirements in terms of services, workforce, technology, resources, pricing, and more. It should meet any specific technical or industry-specific needs your business might have.
- Best fit for your business. Your selected offshore provider should also fit your overall business. So consider cultural compatibility, communication skills, and a project management approach. Look for a BPO partner that shares your values, ideals, and philosophies.
With these two considerations, you can find the best outsourcing partner.
Five Practical Tips for Managing Your Outsourcing Project
A successful outsourcing engagement requires more than just hiring the right offshore outsourcing company. You must carefully manage your BPO project to maximize the full benefits of offshore outsourcing.
In an article about post-pandemic outsourcing trends, BCG cited that 62% of businesses planned to renegotiate their outsourcing contracts. Additionally, nearly 80% of companies asked service providers for help in some form such as:
- Payment extension (47%),
- Cost reductions (45%), and
- Free support for more processes or additional services (41%).
As you can see, businesses are looking for ways to manage their outsourcing projects. So, consider the practical tips below if you hire e-commerce or healthcare offshoring services.
- Develop a Service-level Agreement (SLA). An SLA is a legally binding contract between you and your outsourcing provider for clear service expectations and legal protection. Negotiate the terms and conditions with your hired provider and create a comprehensive SLA.
- Set Key Performance Indicators (KPIs). KPIs are measurable metrics used to track the performance of your outsourcing project. They usually revolve around service efficiency, quality, compliance, and CSAT. Include these in your SLA contract!
- Establish Communication Protocols. Effective communication is key to a successful outsourcing engagement. Establish communication requirements, such as regular check-ins and meetings with your BPO management team. The goal is to identify areas for improvement and address them immediately.
- Require Regular Monitoring and Reporting. Setting up a quality assurance (QA) team for your BPO workforce is crucial. This team tracks performance and audits work to ensure quality service and business compliance. Review monthly reports to check your outsourcing progress and success.
- Visit the Offshoring Destination. Visiting your BPO service provider at least twice a year is a good idea. That allows you to see the actual operation and recommend some improvement strategies. Doing so also helps establish a good relationship with your offshore provider and strengthens the outsourcing engagement.
The Bottom Line
Offshore outsourcing has become a viable means for balancing cost reduction and business optimization. However, working with the right offshore company is key to outsourcing success.
Follow our critical steps above for choosing an offshore provider. Hire a BPO partner that meets your outsourcing requirements and best fits your business type, niche, size, and budget. When you have chosen a particular provider, consider our practical tips for managing your outsourcing project.
Planning to employ offshore outsourcing and hire a BPO partner in the Philippines? Get in touch, and let’s connect! Unity Communications is ready to serve you with our front- and back-office outsourcing services.
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About The Author
Dion Jay Tality is a content writer and one of the creative forces behind Unity Connect’s blog posts and marketing copy. Before joining Unity Communications, he spent over five years in the BPO industry, wearing various hats—from being a CSR and email and chat support specialist to being an SME and QA analyst. Name it; he tried it!
Passionate about writing, Dion loves to bring ideas to life through the power of words. When he’s not busy crafting content, you might find him working out, enjoying mindful walking, exploring conspiracy theories, or singing at the top of his lungs.