Business process outsourcing business – Vital essentials you need to know

by | Mar 13, 2018 | Business Feature

It has been for many years now that outsourcing has helped both the small and big businesses to curb costs without having to compromise on the quality of services and products. Apart from the fact that it leads to cost savings, outsourcing can also give enough flexibility and expertise to a business. This is the main behind so many entrepreneurs considering outsourcing as the most sought-after strategy for growth.

But what is outsourcing? It deals with contracting out of a specific business function like logistics, supply chain operation or manufacturing to a third-party company. There are times when the process may include transferring assets and staff to the provider of this outsourcing service. When you outsource tasks, you don’t require hiring trained staff for carrying out that specific task and you can instead focus on the core functions of your business.

The business process outsourcing industry – How old is it?

You’ll be rather surprised to know that the first record of BPO services date back to the year 1949 when a company in New Jersey started outsourcing their tasks. Till date, it has been seen that processing of payroll has been one of the most common outsourced functions of companies. Nevertheless, due to the sudden rise in the numbers of expert freelancers or specialist firms or independent contractors, it is nowadays possible to outsource any business process. Hence, although the concept of business process outsourcing services seems to be pretty old, the BPO industry is comparatively at its nascent stage.

Outsourcing – What to consider

It is possible to perform an outsourcing project in different ways, depending on the different types of variables. Here’s a look into some:

  • Talent requirements of staff: What sort of experience and skill do you require? Keeping in mind the project for which you’re outsourcing, how many people do you think you’ll need? Could you do with part-time staff or you need full-time employees?
  • Timeframe of the project: Do you think your project has got a fixed duration or is it going to continue for an indefinite period of time?
  • Infrastructure: What sorts of facilities, infrastructure and software will your respective project need?
  • Scheme of compensation: What are your intentions of payment? Would you like to pay on an hourly or weekly or daily or monthly or annual basis? Would you want a fixed-price service? Or would you prefer paying on a basis of headcount or performance?
  • Administrative control: To what degree will your outsourcing partner manage such tasks like technical support, recruitment, production and quality assurance?

In what manner will the services be delivered to you?

The way in which such services will be delivered to you will depend on the model or outsourcing structure that is used such as:

  • Managed services
  • Out-tasking
  • Augmentation of staff
  • Outsourcing based on project
  • Offshore centres for production or Offshoring

So, before you opt for business process outsourcing, make sure you discuss things with a potential external provider before utilizing the services. Ensure getting the best services from the third-party company which fulfills your needs.

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