How Business Process Outsourcing Helps Businesses Grow

By Replicant
October 29, 2021

How Can Business Process Outsourcing Help My Business?

In today’s world, competition in just about every industry is high, consumer demands are accelerating, and the labor market is tight. One way that successful companies can deal with these modern challenges and improve their competitive advantage is through business process outsourcing (BPO).

According to Gartner, BPO is defined as “the delegation of one or more IT-intensive business processes to an external provider that, in turn, owns, monitors and manages the selected processes based on defined and measurable performance metrics.”

One common example in the business process outsourcing industry is using a third-party vendor to manage an external call center, either completely or partially, to handle overflow. Conversational artificial intelligence driven technology also plays a role in this BPO.

How can BPO help my business?

Using a BPO can help businesses scale up staff or completely offload tasks. For a small business, a BPO vendor may handle tasks related to accounting, human resources, or customer call centers, allowing them to scale and grow more quickly. Larger businesses often use BPOs to add staff during seasonal peaks.

What are the advantages of business process outsourcing?

BPO solutions may lower the risk of adding staff while supporting organizations on an as-needed basis. They typically don’t require resources such as office space or equipment to get started.

Alternatively, AI-driven solutions can reduce call center costs as businesses typically pay for only the services they need. Learn more about how conversational AI works.

BPO Benefits

Like any solution, BPO services can benefit the right business at the right time. Here are some of the most common benefits that companies experience:

Reduced Overhead. If a BPO takes over a call center completely, that relieves the business of hiring staff, creating infrastructure, and implementing technology.
Specialized Expertise. Although a BPO company will require training in your business, presumably, they will be experts at running call centers in general. Since these are their core business functions, they typically invest in the latest technology and processes on a large scale, passing along that value to clients.
Rapid Solution to Overflow. Busy seasons and other expected peaks in volume can be handled efficiently and quickly by BPOs who can step in to reduce hold times for a few weeks or months without long-term investment.
24/7 Service. For smaller organizations that cannot afford to staff around the clock but who compete with those who do, BPOs can provide that always-available offering.
Transfer Liability. Businesses can shift risks and liabilities to a third-party BPO who then becomes responsible for agent turnover, compliance, security, and other call center challenges.

BPO Cautions

While there is definitely a benefit from outsourcing operations, businesses pursuing this direction will want to take into consideration some potential downfalls as well:

Training Costs. Since BPOs are external resources, companies can incur significant training costs when outsourcing business operations to ensure that customer-facing BPOs get up to speed in order to prevent a disjointed customer experience.
High Turnover. According to Quality Assurance & Training Connection, call center turnover rates are between 30 percent and 45 percent. That number could be higher if a BPO call center is used because those employees have even less of a stake in the client company.
Poor Long-Term Solution. Although BPOs can offer quick answers to immediate staff shortages in call center operations, they often don’t solve long-term problems. Modern conversational AI, in comparison, is advanced enough to step in for call center staff shortages, while offering economies of scale and more predictable and controllable usage costs.
Loss of Control. In exchange for third-party BPO expertise, you turn over some control of agent behavior and, as a result, manage customer experience.
Language Barriers. Outsourcing call center operations may often bring to mind working with low-cost offshore staff that do not have English as their first or primary language. Language and cultural barriers can cause customer frustration.
Security Risks. According to SecureLink, more than half of all companies have faced a data breach caused by a third-party vendor.

Conversational AI vs. BPO Solutions

Organizations may want to consider conversational AI solutions as a complement to or a replacement for in-person call center BPOs. These solutions can offer fully branded experiences that take the guesswork out of call scripts and escalation processes. Purpose-built conversational AI can fully resolve tier-1 customer service calls, improve agent retention by offloading repetitive calls, and reduce costs.

More complicated calls can be transferred to experienced agents, either internally or to a BPO partner, for resolution. The best AI-driven solutions will provide call history, automated conversation transcripts and other background information, which allows a live agent to pick up with the AI-agent left off, improving overall customer satisfaction.