BPO Industry - Business Process Outsourcing

Lately there's been some huge debate over whether the BPO Industry should actually be the "BFO" Industry (Business Functions Outsourcing). Technically the majority of outsourcing done by BPO companies are of business functions instead of business processes, yet the term "BPO" is so widespread that it's difficult to change the terminology.

So why are companies outsourcing functions instead of processes?

Well, first of all, they are two very similar things - the differences between the two are so minimal that processes could really be considered functions, and vice versa. But the reason businesses are leaning towards outsourcing functions is because of the fixed-cost provided. Businesses like fixed-costs because this better helps them determine what the exact benefits & costs are associated with this business decision. One of the main reasons this is important is that when it comes to outsourcing, there are tons of BPO companies to choose from, so one of the best ways to compare their services are in terms of cost. Quality is also key, but this fixed-cost takes away the confusion of how much they're actually going to pay.

So, after reading at least one of those books above, hopefully you have a good idea about how to choose the right BPO Company. Here's a few quick things we need to run through to help you understand which one is right for your business:

1. What functions or processes do I need outsourced?

If you don't know which business tasks you need outsourced, then you're in for some trouble. Take a few hours and look over what needs to say in house and what can be outsourced. You need to realize that certain BPO Companies are tailored for different functions & tasks. For example, most (if not all) the BPO companies located in Costa Rica are call centers. Why? Because Costa Rica is a native english speaking country. Another great example of BPO company specialization is the BPO Industry in India. The industry there also specializes in call centers, but they also can are known for Information Technology. If you don't know what you're outsourcing, then there's no way to start your search.

2. Which companies are the most cost effective?

Obviously this is huge - if the price isn't right, then why do it? Here's a quick tip: whether or not the industry is government-backed in that country is HUGE when it comes to cost. Countries like South Africa have strong government support, cutting taxes & costs of the BPO Companies to run. This means they can offer BPO Services at lower prices (if the labor is cheap, which it is in South Africa). At the same time, hold quality over cost for a couple of reasons. The best is this: most services won't be a huge difference in cost, so choosing the higher quality of services should be the deal breaker.

A lot of my readers on my blog & website have been curious about other options outside of BPO in terms of outsourcing. Luckily, I do my research. The best option I can give you outside of BPO is the PEO , or Professional Employer Organization industry. In a nutshell, PEOs do something called "co-employment". Co-employment means that the PEO company is the legal employer for tax purposes. This direct lower cost in terms of taxes is split between the employer & the PEO. PEOs also provide Human Resources, Payroll, and Workers Compensation solutions. If you're a small or medium sized business this is perfect for your company. If you'd like to get more information, I highly recommend PEO Compare's PEO Services matching tool. By taking the quick, free survey, it compares your business' needs instantaneously with the top PEO companies in the industry. Trust me, it's worth the three minutes it takes to fill out the survey.

Awesome! You just learned all about the BPO Industry and what it has to offer companies. The BPO Industry is growing at over 7% a year (Wow!), which is an even bigger deal considering its sheer size at this point in time. If there's anything you can take away from this lens, know that Business Process Outsourcing can give your business the edge its looking for. Luckily for us, I designed an entire online resource all about the BPO Industry. Here's a quick list of links on different things considering BPO: