Unsuitable Roles To Outsource: When Does It Make Sense To Use BPO?

You might decide to outsource certain business functions to fill a skill gap or address rapid company growth. Business process outsourcing (BPO) frees up valuable resources and time, which improves the bottom line in the long run.

Despite all the benefits of outsourcing, should you outsource everything? Not all tasks should be delegated to a third party. You must consider which roles to outsource and which to keep in-house.

This article discusses the functions your company should perform by itself and the roles it should outsource.

Roles and Functions Not To Outsource and Why

Before discussing unsuitable roles to outsource, let us first define what BPO is. It means delegating certain business operations and responsibilities to third-party service providers.

Nowadays, almost everyone outsources, driving the global BPO market size to almost $262 billion. And why not? The efficacy of BPO has been evident throughout the years, and it benefits businesses of different industries and sizes.

However, there are certain roles that should always remain within the organization, regardless of external factors. Here are functions that are best handled in-house and not delegated to external service providers:

• Core competencies. If your company specializes in certain products or services, your in-house expertise is irreplaceable. Third-party providers may excel in customer service, back-office operations, or administrative tasks, but they cannot match your depth of knowledge in your specific field.
• Final say in hiring. The ultimate say in hiring should never be outsourced. While outsourcing recruitment and HR tasks can be beneficial, the final hiring decision should rest with you. You are best positioned to evaluate whether a candidate will add value to the company and fit the role.
• Employee training and development. The responsibility for guiding and developing employees should firmly reside with company management. Enlisting a third-party team to oversee employee growth is unsuitable, as you should have control over shaping your staff into the professionals your organization requires.
• Termination management. Similar to hiring decisions, termination management should never be outsourced. In-house leadership teams should be responsible for retaining and terminating staff when necessary. It is crucial for you to deliver both positive and negative news to your employees.
• Company financing. Decisions regarding departmental budgets and financial investments should remain an internal prerogative. In-house managers possess a deep understanding of the company’s financial status, making them better equipped to make sound financial decisions.
• Expense sign-off. Owners and executives must closely monitor each transaction to ensure profitability. While expense sign-off can be time-consuming, diligent tracking of business finances is a worthwhile investment of time and effort.
• Account management.The management of existing accounts should never be outsourced. Clients deserve a personal touch, and when third parties handle their commitments and investments in your brand, it can convey a lack of importance. In-house resources should be devoted to maintaining these crucial business relationships.
• Sales.  Finding individuals who can effectively convey your brand’s story and passion is rare. Outsourcing sales means your company is just one of many clients for the provider, potentially resulting in a lack of the personalized attention your prospective customers deserve.
• Business relationships. Roles where business relationships hold significance should never be outsourced. Doing so could interfere with sales and customer success, as the trust built through these relationships is challenging to replicate.
• Risk management. Risk management entails more than just problem-solving; it involves understanding how success is achieved. An in-house team of problem solvers is essential to tackle challenges as they arise and prevent their recurrence.
• Executive or leadership roles.  Roles directly shaping the company’s success and those involving strategic planning and executive functions should never be outsourced. Organizational objectives should emanate from its own executives, as they possess a profound understanding of the principles that keep the company running.

What You Should Outsource Instead

Some businesses outsource an area of day-to-day operation to concentrate on core functions or eliminate time-consuming tasks that do not generate profit. Others outsource because they lack the capacity or resources to hire full-time employees to perform the task in-house. But the most common reason companies outsource is to save money.

Here are five commonly outsourced roles and why it makes sense to outsource them:

• Customer Service. This business function is time-consuming. Outsourcing it to a reputable provider relieves you of that stress.
• Data Entry. Indexing, scanning, cataloging, and order processes are data entry roles best outsourced. One should only be wary of outsourcing data entry when the information involved is confidential.
• Accounting. Outsourcing accounting is a good option for small businesses because managing the job without experience is difficult, especially with many compliance and tax regulations.
• Information Technology (IT). It is the most commonly outsourced process. Offshore IT analysts are happy to charge 70% less than the average wage in the U.S. Differences in time zones are also no problem, thanks to graveyard shifts in the BPO industry and the internet.
• Web Development. A functional and well-designed website is pivotal to success. However, not all companies, especially small businesses, need or can afford an in-house web developer. Web development outsourcing is the solution to cost-effectively acquiring this expertise and reducing time-to-market.

Any role you can clearly define and outline with a standard operating procedure (SOP) is suitable to be outsourced. Before outsourcing any function, check the return on investment (ROI) from outsourcing. Then, develop an SOP that carefully describes each step of the role, performance expectations, and ways to achieve the objectives.

Common Mistakes To Avoid When Deciding Which Roles To Outsource

If you are a beginner in outsourcing, you will probably make mistakes detrimental to your business. Avoid them by being proactive and examining these common mistakes:

• Not having a clear plan or roadmap on how to proceed
• Jumping in too quickly without understanding the complexities of the potential partnership
• Outsourcing an entire department right away
• Not taking the time to draft standard procedures
• Outsourcing tasks just because it is convenient for you
• Failing to identify the strengths and weaknesses of your in-house team
• Allowing external providers to tell you what BPO roles and responsibilities you need
• Subcontracting a role just because it is cost-efficient without analyzing other factors

The Bottom Line

Outsourcing is indeed becoming a pivotal part of any successful company. BPO agreements materialized, thanks to phone calls and meetings over coffee. But today, organizations can acquire solutions through the Internet. Outsourcing customers can draft contracts with service providers without meeting face to face.

Remember that some roles make sense to outsource, while others are better kept in-house, such as account management, company financing, and your core competencies.

Are you thinking of outsourcing some business operations? We provide professional services to help you scale cost-effectively. Let’s connect to find out more!