27.06.2018

Business Process Outsourcing Is The Future Of Successful Organisations

Article by
Marta Brzosko, Marta Brzosko - Ideamotive's Blog
4 min read

Business process outsourcing (BPO) means relying on third-party contractors or cloud-based BPaaS (Business Process as a Service) solutions to carry out some of your business operations. It can be back-office processes – such as accounting, payment processing or IT services – or front office ones, such as sales or marketing.

The value of the BPO market is constantly growing and is projected to reach $ 262.2 billion by 2022. Some of the most frequently outsourced areas include IT, healthcare, finances and HR. The biggest market is currently the United States, and the most rapidly growing one – the Asia-Pacific region.

Because business process outsourcing is becoming so huge, changes in the industry are inevitable. How will the future of BPO unfold? And what are the main benefits of outsourcing for your business?

Why is outsourcing such a hot topic these days?

The market is currently in a transition phase in terms of the type of business operations that are most commonly outsourced. Back in the day, companies would only outsource their low-risk operations – such as data entry – to external contractors. Gradually, with the technological boom and the rising importance of online communication, more significant processes became subjects of outsourcing – e.g. customer service.

As organisations started recognising the remarkable cost benefits that outsourcing brought, the spectrum of outsourced work became even wider. Nowadays, many businesses gravitate towards outsourcing even their high-end functions, such as IT services and research. Where is this shift coming from?

There are several reasons, but probably the most important one is the increasing specialization of business and emerging new mindset of business owners and CEOs. This mindset dictates to focus company resources on the key operations that they specialize in. For a software development company, it might mean focusing on releasing high-quality software, while outsourcing marketing, accounting, and HR. For a manufacturer, it will be a focus on engineering and releasing best possible product – and outsourcing processes such as deliveries and customer service to third-party specialists.

Aside from the business climate, the development of new technologies is an important factor for the growing importance of business process outsourcing. The emergence of BPaaS business model allows businesses to not just outsource their processes to be done by other people – but also automate them by using cloud-based tools to perform certain operations in a standardized way.

The benefits of outsourcing business processes

If you are a business owner, you are likely thinking: ok, but what are the potential benefits of business process outsourcing for my company? It may seem like a lot of hassle to organize your communication with off-shore partners and overcome cultural barriers – and for the sake of what?

We’re glad that you asked. Here are some of the most frequently mentioned advantages of outsourcing, according to Flatworld Solutions:

  • Lower costs with the same (or better!) quality of work. You will want to outsource your operations to a country with lower wages, taxes and/or living costs, which automatically reduces your business spendings. Usually, it’s a good idea to not go for the cheapest, but rather moderate-priced services that still ensure good quality of work. An example could be outsourcing software development to Central-Eastern European companies, e.g. Polish ones.
  • Increased efficiency. When you choose to outsource a certain business process to a specialized company, you can be sure that the job will be done efficiently. Because your contractor has knowledge and experience in this particular area, they will not waste time on basic research or learning from mistakes. They have already done those mistakes years ago – and this is how they became experts in their field.
    The increased efficiency also applies to contracting Millenial freelancers who work remotely. According to UpWork, ‘92% of Millenials would like to work remotely where they feel more productive’.
  • By choosing to outsource to specialists, you are also ensuring that the people handling your operations (such as marketing or recruitment process) are more skilled in those areas than you are. This usually guarantees better solutions to particular problems – which strengthens your business in the long run.
  • Business process outsourcing allows your own employees to reduce the time and energy spent on tasks that they don’t specialize in. This means that they can put more resources into working at key business operations and thus contribute to a faster growth of your company. In other words: BPO eliminates distractions and allows your business to focus on what it does best!
  • Round-the-clock business operations can be an additional bonus of BPO. If you outsource some jobs off-shore to countries in distant time zones, it might mean that your business processes are happening non-stop. You may be able to close the working day on your side of the world, go to sleep, and wake up to receive delivered service the next morning.

 

The future trends of business process outsourcing

As business process outsourcing becomes recognized for all of the above advantages, the scope and characteristics of the outsourced work evolve. Here are some major trends that will be defining the nearest future of outsourcing:

  • Growing specialisation of outsourcing. The specialized outsourcing services will be particularly valuable for the companies offering data-driven products and services. Their outsourcing providers will continue to excel in gathering and/or processing context-specific data, invaluable for data-driven companies.
  • Outsourcing more high-end operations. The BPO market is still in a transition from basic and low-risk operations towards the more important ones. Gradually, businesses will most likely outsource as much of their processes as possible, keeping only what they specialize in as their in-house jobs.
  • Europe and Latin America will become popular off-shore outsourcing destinations. At the same time, Asian-based outsourcing providers, such as India or the Philippines, will remain important and strong markets.
  • Cloudsourcing will expand. As the BPaaS business model grows in popularity, possible services that you can outsource to a cloud-based service will expand in variety. Cloud computing will allow companies not to just cut costs but also automate increasingly complex business operations.
  • Remote teams will emerge as a new working model. With outsourcing work off-shore, the need for better organization of remote business relationships will increase. There are initiatives being undertaken already to share knowledge and good practices in this area – an example being the upcoming Remote Future Summit, happening 5-8th June 2018.

 
Looking to outsource software development, audit of your working product or optimizing your business operations? Contact us to arrange a free Discovery Call – let’s see what we can do together!


Marta Brzosko


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