The global market for Business Process Outsourcing (BPO) is expected to increase at a CAGR of 5.2% to reach US$215.9B USD by 2026. Researchers predict that 60% of finance and accounting outsourcing contacts will not be renewed by 2025.
BPOs have benefited online businesses, especially in the past few years. To better serve their customers in numerous ways. A business process outsourcing service places the responsibility for a set of business operations onto a third-party provider in exchange for a fixed fee. Outsourcing allows businesses to reduce costs and remediate difficulties, such as a shortage of skilled staff. Some of the most common services provided include:
- Customer support
- Contact centre services
- HR management
- Professional consulting services
- Tax filing
There has been an increase in hybrid outsourcing, with businesses requiring a number of services sometimes on a short-term basis. This can include special needs for business expansion and regulatory compliance, particularly in eCommerce.
The various advantages of BPO include:
- Cost savings
- Speed to market
- Improved core operations
- Enhanced customer service
- High competitive capacities
BPO providers have also changed focus from traditional roles in telecommunications and HR to cybersecurity, advanced workforce skills, and centralizing global processing. This shift has elevated the BPO industry. What was once considered an undesirable necessity for businesses needing to reduce costs, BPO is now considered essential to the growth and development of businesses that have international growth ambitions.
Core trends in Business Process Outsourcing
The Trajectory of the BPO Industry
While demand for BPO services has remained strong this year, it is no longer the low-cost solution to big business expansion opportunities. Many BPO providers have innovated their industry solutions to provide better services. Service providers are actively trying to improve business outcomes, and re-aligning and repurposing the original “lift-and-shift” outsourcing mission (eg. increased cash flow, stakeholder experience, compliance, etc.) with a focus on value-centric activities and objectives. Companies are fast realizing the potential of cloud platforms that provide scalability, agility, reliability, and the ability to extract data-driven conclusions. This technology applied to emerging online enterprises has been a significant factor in the growth of eCommerce businesses.
BPO Adapting to Businesses’ Needs
The BPO industry’s services have evolved to meet the needs and demands of today’s enterprises. BPO providers are offering tailored services and off-the-shelf solutions in mostly online functions, including digital marketing, cybersecurity, website configuration and updates and industry compliance.
Demand for expertise in areas such as Dapp development, AI and ML, robotic process automation (RPA), and big data analytics have increased exponentially in the past few years. Businesses wanting to access such expertise are turning to outsource services to fill the gaps in their skilled workers and gain an advantage over their competition.
Tailored Contract Offerings
The proliferation of online start-ups and small businesses has seen the need for managed businesses process explode. Sourcing a BPO provider to assist is essential, and many offer bespoke and tailored workflow solutions. BPO service providers have been compelled to enhance their operational accountability and offer more transparency in their pricing, policies, and contracts. This has led to a proliferation of BPO contractors and business owners should be careful to research their needs and the choice available to them.
Centralizing Global Processes
BPO service providers are more focused on consistency and centralization of services and solutions. Businesses seeking BPO services tend to be gravitating towards operators that are focused on:
- Identifying the existing operational state, including limits and modifications that limit business growth.
- Assess the applicability and suitability of offshoring.
- Defining the target audience, including developing a strategy to further centralize and standardize existing and future operations.
- Define and ensure consistency in data integrity standards regarding organizational information shared with BPO service providers.
Why Outsourcing Core Business Functions?
Before outsourcing a core business function, you need to define your objectives. This can include:
- Streamlining organizational processes
- Reducing costs
- Improving expertise
However, without clearly defining the objective of the choice to outsource a core business function, the goal cannot be met by the business or the provider.
BPO is not the solution for all businesses. Consulting and contracting can fill some gaps businesses need to manage growth spurts. However, BPO services have been misused by some multinational companies to send work offshore, reducing overheads but also limiting opportunities for workers in the nation of incorporation of the business. It is a careful balance for business owners who must understand the benefits, costs and drawbacks of outsourcing. Optics are very important, so defining the goals and objectives of each core business process considered for outsourcing is necessary to determine the potential of outsourcing.
Planning, Setting goals and Reaching Targets
Contracting with a service provider can be the answer to growth-potential blocks in business. One of the main areas of development in BPO growth has been the technology sector. Businesses are moving online, offering greater online access or even moving solely to online offerings. To do this, businesses need BPOs that offer tech solutions that are affordable, flexible and on the cutting edge of development. This demand is not only for businesses but for customers too.
When an organization is ready to adopt business process outsourcing the capabilities necessary to assist in achieving efficiency, risk mitigation and enhanced productivity are readily available.
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