What are BPOs?
Business Process Outsourcing (BPO) is defined as the transfer of intensive business functions to a third-party, external provider. These external providers manage, control, and handle various business tasks based on a specific and measurable performance indicator.
Firms operating in the BPO market provide either horizontal or vertical options. The first consists of activities that are available throughout the industry, and the latter consists of activities that demand industry-specific knowledge.
The industry has transitioned and consistently grown globally. In partnering with BPOs, companies typically first identify processes necessary for their business but are not part of their core value proposition in the market. This step requires a thorough understanding of the operations within an organization and vital business process planning.
Since these standard processes generally do not distinguish any organization from another and take a lot of time from in-house teams, company executives find it almost meaningless for their employees to carry them out. Thus, companies perceive that outsourcing these processes to others will garner better results for them.
The efficiency, cost-effectiveness, and specialization offered by the BPO model in logistics, quality assurance, HR, Finance, customer-related communication, Marketing, IT, and other functions make it an enticing service for companies hoping to expand or minimize their expenses.
Moreover, it enables businesses to prioritize their development strategies by delegating complementary responsibilities to third-party contractors.
In both back- and front-office operations, BPO allows multi-faceted companies to find context, maximize profit, deliver the right results, move forward from change, and operate relatively independently through the recruitment of external providers.
How are BPOs Relevant Today?
Once a service utilized by manufacturing companies in their supply chain modeling, BPOs have now evolved and been prevalently employed by firms, government agencies, and nonprofits from various industries.
This is especially evident today, with statistics showing that the global outsourcing market is worth over $201.5 billion worldwide and approximately 66% of large organizations outsource their workforce. Similarly, the trend in the Philippines represents the development of the sector.
The Philippines is renowned as a world leader in the BPO industry, with the country being first in terms of size of the market and second in knowledge process outsourcing (KPO).
Narrowing it down, data proves that just in 2021, the Philippine BPO market grew by 160% despite the economic depression brought by the global health pandemic. In addition, researchers have predicted that the Philippine IT-BPO industry alone can reach PHP2.5 trillion in terms of revenue, contributing approximately 17% to the country’s GDP.
Along these lines, the COVID-19 pandemic has further emphasized the relevance of the service, projecting the BPO sector to have a CAGR of 8.5% from 2021 until 2028. Given the shift in work style and the operations of businesses, there are many changes imposed by the global health crisis on companies.
Nevertheless, despite the economic downturn and losses inculcated by various fields, BPOs have been resilient, if not even stronger. A huge part of this is that foreign companies continue to use the BPO workforce, all while providing hope to millions of job-seekers.
Advantages and Disadvantages of BPOs
It offers a wide range of opportunities in various aspects, from KPO, Research Process Outsourcing (RPO), ITES (Information Technology Enabled Services), to even the most far-fetched services like Legal Process Outsourcing (LPO).
With the rise of new markets and many companies cutting expenses, downsizing, expanding, adjusting to new government regulations, or relying on technology, there is truly a greater need for the service that promises innovation and efficiency.
However, looking at the other end of the spectrum, it is inevitable for some BPOs to entail risks such as security breaches, unanticipated miscellaneous costs, overdependence, challenges in the relationship, and increased potential for disruption.
For these reasons, it is crucial to find a trustworthy BPO that would build your firm’s scope, capture, and record for transparency, build and operate your standard operating procedures, and finalize these procedures.
A Guide on BPOs
With all these being said, the infographic here provides an accurate and informative guide on the types of BPOs, their market trends, and the revolutionary advantages they bring to companies.
It is crucial to know these facts and consider partnering with a BPO because it allows your company to outsource risk by starting small, clearly defining its scope, providing the concept, building confidence, and extending.
This infographic will explain what BPOs are, their significance to enterprises considering the ever-changing external environment, and the opportunities for growth that they can take advantage of from outsourcing.
Secondly, the infographic illustrates how BPOs can allow companies to cultivate from challenges and achieve a more flexible, economical business framework in these times of uncertainty.
Finally, it details how outsourcing indeed provides a sincere answer to timely business problems, manages disruption, and empowers a company to regain control through detailed and effective solutions.