Pros and Cons of Business Process Outsourcing
Business process outsourcing, or BPO, is a widely-employed business practice where businesses outsource many corporate functions like accounting or customer support to third-party service providers, sometimes miles apart.
And of course, BPO has its own pros and cons – which can be pretty harsh sometimes. Knowing the pros and cons of business process outsourcing, therefore, is very important if you’re planning on outsourcing your company functions.
Before that, however, you’re recommended to check our previous article, Business Process Outsourcing – A Brief Overview, to learn more about BPO in general.
Benefits of BPO
- Streamlining: Business process outsourcing helps streamline your business functions.
- Focus on more pressing issues: Outsourcing some of your business functions to third-party service providers helps you focus on other issues of more importance.
- Small businesses and startups: Small businesses and startups can benefit tons from leveraging BPO services. They just need to do good research. Once you find a good service provider, you’ll see it’s much better and more cost-saving to outsource than to hire.
- No additional costs: Health benefits, insurance, and other charges apply on employees, but not on outsourcing. There are no accidental data loss risks and other errors and risks normally associated with employees.
- State-of-the-art technology: All BPO firms utilize latest technologies. You get the best in the industry for the price you pay, no need to think about purchasing costly software or renewing subscriptions.
- India’s leadership: India has a specialized industry for BPO. Indian firms are in this business since a long time. They provide cost-effective, skilled, and educated staff which can be much better than hiring fresh talent.
Disadvantages of BPO
- Privacy concerns: Although most providers make sure your data isn’t misused in any way, there can be instances where your private data is mishandled.
- Communication disconnect: Different countries mean different languages, accents, or traditions. There can be a grave problem if the two ends can’t communicate clearly what they exactly want.
- Bad quality of work: There’s no end to complaints regarding the poor quality of work submitted by overseas service providers. May that be coding or customer support, it can be poorly-written, badly-communicated, or just haphazardly-managed, etc.
- Faking manpower: The main point of choosingone BPO service provider over another is the workforce, as they all make pretty much the same deal of promises. And workforce count can be an illusion. For all you know, a so-called company might be just two college-graduate brothers with a Pentium-based computer in their basement.
- Differences: Mostly, you’ll outsource work to countries with whom you share less and differ more. This can mean money exchange, time zone, or misunderstanding problems.
Maximize benefits, minimize disadvantages
There are many things that can be called good BPO benefits, and in certain situations BPO can even be destructive to the growth of your business. It all depends on how much research you do before buying such services and how much are you willing to pay for them.
It goes without saying, but read the agreements carefully to avoid any legal issues or hidden costs.
Written by Maria Nelson. Maria works as a BPO, business process outsourcing, expert for renowned firms. She has established herself as a powerful entity in the field. Her work includes tackling problems like whether to outsource or not for a startup to which services to outsource and how to maintain their privacy for big firms.