The Rise of Business Process Outsourcing

Business process outsourcing is a market which has come of age. With greater reliability and a favourable regulatory environment, more companies are getting on board.


As a business grows so do its requirements. In the early days, you might be able to handle everything inhouse but, as you grow, your resources will be stretched to breaking point. As a business owner, you’ll need to ask serious questions about how you manage your resources to move your business forward. It’s at this point that you may decide to choose business process outsourcing (BPO).

BPO involves handing over non-core activities, such as administration, data entry or payroll to a third party. Businesses might use it for a number of reasons such as:

  1. Reduce costs: This is the main reason people use BPO. Although engaging an external company will involve a cost, this is outweighed by savings. These come through leveraging your partner’s economies of scale and reducing your own internal head count.
  2. Flexibility: Handling operations yourself involves fixed costs. You’ll be employing people and managing functionality no matter what your operational requirements. With BPO, costs can be variable, rising and falling as you need it.
  3. Maintain focus: A major inhibitor of growth comes when you’re diverted from core business operations (those which generate revenue). BPO allows you to devote all your resources to those areas which drive productivity, revenue and growth.
  4. Increased quality: BPO providers are specialists in their fields. You can leverage that experience and expertise to improve the output of that process. For example, if you outsource accounts and financial operations to a third party, they may be able to offer superior financial oversight than your inhouse accountant. This could improve cashflow management and help you see where your company is most profitable.
  5. State of the art technology: It is a tech driven world out there. Using a BPO company will enable you to leverage the very latest state of the art technology in that field. This is their core area of expertise so they invest in the latest technology to ensure they meet the very highest standards.

Regulatory compliance: In some sectors, increased regulatory oversight creates problems for smaller operations, such as in the financial sector. BPO companies can provide the capacity and expertise to understand compliance obligations and ensure these are all met

None of these are new. Companies have been using BPO processes for years to save money and improve productivity. Today, though, as a report from Deloitte confirms, the market is reaching maturity. As substandard operators are weeded out, and best practice standards established, BPO projects are becoming more successful.

Meanwhile, digital technology is making it easier for businesses to collaborate with third parties on a number of operations. Communication is seamless and web-based portals often allow you to maintain oversight of operations

Making it work

Before choosing a vendor, you need to perform an analysis of your business. Decide which areas of operations are suitable for outsourcing. Define all relevant stakeholders in these processes and outline all their responsibilities and expectations.


This process may take some time. It should involve a complete assessment of your company, not just those processes you’re thinking of outsourcing. This will enable you to identify any opportunities or risks and determine if there are some processes which would benefit from outsourcing today and others which may be appropriate in the future.


As a business, you could start by outlining your main objectives, namely why you want to outsource and how you will measure success. When it comes to searching for BPO providers, you’ll assess them against how their offerings align with these stated goals. A few key factors which may influence your decision include price, customer satisfaction levels and how they will integrate with your existing operations.


You should also assess their security processes. When data and operations are shared between different parties, the security of one affects the safety of another. Under new data protection regulations, you retain responsibility for any of your data held by a third party. If their security processes are not up to scratch, your business could suffer financially, reputationally and operationally.


In a more high-tech business environment, the risks of data sharing between third parties are much higher, but so are the rewards. While BPO used to be seen as nothing more than a way to save time and money, today it can have a much more positive impact on business performance. Data moves seamlessly and collaboration is swift, which is why more and more businesses are turning to third parties to manage a growing range of operations.  

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