What is BPO?
With a turbulent economy placing pressures on margins and clients demanding first-class services, businesses are struggling to maintain profitability. Business process outsourcing (BPO) is a strategic step for companies seeking to streamline processes, reduce costs, and gain access to world-class processes without investing in the essential technology and skills.
BPO is the contracting of a specific business task, such as customer service, to a third-party service provider. It is usually implemented as a cost-saving measure for tasks that a business needs, but does not depend upon to maintain its marketplace position.
It is typically categorized into two types. Back office outsourcing includes internal business functions, like human resources or accounting. Front office outsourcing handles customer-related services such as call centers or tech support.
According to a report by TechNavio, a leading research and analyst firm, the global BPO market is estimated to grow 5.1% by 2015. The findings support the outsourcing industry’s immunity to challenges posed by the tough economy.
The Philippines has become the dominant BPO destination ahead of India. The country’s labor is 80% less than the pay of its Western counterparts. More than 90% of the citizens are literate, and it possesses the largest English-speaking population in the world.
During a recent networking event, Consul General Mario De Leon stated that based on a report of the IT and Business Process Association of the Philippines, the industry directly employs one million Filipinos and is expected to earn $18 billion this year. In addition, he said that the industry supports 2.5 additional jobs for each direct hire.
Like India, Filipinos are experienced IT professionals, customer care representatives, and medical experts. This expertise greatly contributes to some of the most outsourced services.
BPO companies offer various services. Here are a few your company may benefit from:
- Customer support services: 24/7 inbound or outbound call center services that address customer inquiries via phone, email, or live chat
- Technical support services: Installation, product support, troubleshooting, usage support and problem resolution for computer software and hardware
- Telemarketing services: Creating interest in the services and products through up-selling and cross-selling and completing online sales processes.
- Bookkeeping and accounting services: Maintaining the customer’s general ledger, accounts receivables, accounts payables, financial statements, and bank reconciliations.
- Online research: Internet search, web and market research, surveys, analysis, and mailing list research.
The International Association of Outsourcing Professionals has released the list of top BPO service providers in 2014. ISS leads the list of outsourcing major players in the global scenario followed by Accenture and CBRE close on its heels. Four critical factors determine the list: size and growth; customer references; organizational competencies; and management capabilities.
The main advantage of BPO is how it helps increase a company’s flexibility. Top BPO service providers offer innovative solutions that resolve clients’ issues. Together with efficient delivery of services, companies are shining light on the remarkable benefits of BPO.
Investment in innovation has propelled the growth of BPO. The outsourcing community has fresh prospects to look forward to and new areas to explore.