Pros and Cons of Business Process Outsourcing

Tuesday 24/11/2020 - 5:19

The popularity of business process outsourcing (BPO) has increased over the past decade or so. Now, businesses are feeling safer and more confident to achieve their targeted goals with the help of third-party servicing agencies. Before you decide whether BPO is right for your company, it’s important to carefully consider the pros and cons. And this article is going to help you do just that. Keep reading for an overview of the arguments for and against business process outsourcing.

What Is Business Process Outsourcing?

Business process outsourcing is usually divided into two major categories that include back office outsourcing and front office outsourcing. Back office outsourcing includes internal business operations such as procuring, purchasing or billing and front office outsourcing includes customer-related services and support.

Pros Business Process Outsourcing

Cost Saving

With BPO, your business can lower overhead costs and become more efficient, being able to do more for less. Hiring in-house teams for managing HR, accounting, marketing, financing and, hence, everything in an organization is pretty tough. Thus, outsourcing some portion of such activities to outside players can help you save a lot of money.

Increased Productivity

Choosing an outsourcing company that specialises in the process or service you want them to carry out for you can help you achieve a more productive, efficient service, often of greater quality. More over, outsourcing can give you access to capabilities and facilities otherwise not accessible or affordable.

Cons Business Process Outsourcing

Outsourcing involves handing over direct control over a business function or process to a third party. As such, it comes with certain risks. For example, when outsourcing, you may experience problems with:

Security risks

When you outsource business processes, you’re trusting another company with your sensitive information. Make sure the company you choose has a good reputation and top-notch security.

Requires time to plan

While it’s very easy to implement BPO, taking the time to plan and prepare your company for the change will pay-off in the long run.

Adjustment period for employees

Relying on an outside company instead of an in-house department for certain business processes can take some adjustment for your employees. Especially if outsourcing also means you’ll be downsizing your workforce.

Hidden costs

This shouldn’t become an issue if you read the contract carefully. Just make sure you take the time to go over the contract and know what you’re signing up for.

Finding A Trustworthy BPO Partner

Outsourcing is a common practice of contracting out business functions and processes to third-party providers. The benefits of outsourcing can be substantial – from cost savings and efficiency gains to greater competitive advantage.

On the other hand, loss of control over the outsourced function is often a potential business risk. You should consider carefully the pros and cons of outsourcing before deciding to contract out any activities or business operations.

With all these advantages and disadvantages of business process outsourcing, we just tried to show where it can benefit or harm your business. Indirectly, we also tried to make you understand the importance of availing services from recognised BPO companies.

>>> Readmore: Choose the right outsourcing software provider

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