Business Process Outsourcing has helped several companies across the globe make significant profits and process improvements over the years. No wonder, the BPO industry has grown massively over last 2 decades. While it helped countries like India and Philippines build their GDP and generate employment for the pool of skilled talent, it worked wonders for the companies outsourcing their critical business processes to other nations.
Business processes have been outsourced primarily for three important reasons:
- Lower operational cost
- Increased Flexibility
- Reduced Risk
Outsourcing vital processes such as administrative tasks, customer support/technical support, and payroll among others also help an enterprise save time and resources for even more critical functions within the organization. Handling these business functions in-house instead of outsourcing costs much more and hence outsourcing. While business process outsourcing is not new to any enterprise in any country, it’s advised to keep in mind few vital points before outsourcing your business processes.
Here Are Few Vital Tips to Effective Business Process Outsourcing-
Analyze the risks of outsourcing-
As an enterprise or brand, you need to understand that the one who gets impacted at the end of the day is your customer which means loss of face and reputation and hence business in the long run. Before you zero in on an outsourcing company and sign the outsourcing contract, you very carefully need to analyze the risks and rewards associated. Few of the risks involved are breach of privacy or intellectual property rights, mediocre quality control and lack of proper communication.
Choosing a outsourcing partner with a good reputation and streamlined processes helps you address major problems to take your business to another level. A reputed outsourcing partner pays attention to the screening process. With a multi-layer screening process and hiring the right talent is vital to your business as 100% customer satisfaction is the key. Call drops, long waiting for queues and inconsiderate customer support and technical support executives can cost you a fortune in the form of losing loyal customers. On the other hand, keeping these aspects in mind while choosing an outsourcing partner increased customer satisfaction, loyalty and positive word of mouth.
Be Realistic With Your Expectations-
Expectations are bound to disappoint when they are no realistic. The majority of companies fail to understand the fact and just because they are outsourcing the business to an offshore BPO, they end up setting extremely high and unrealistic expectations. Setting up not achievable targets not only puts unnecessary pressures on your outsourcing vendor but also it is harmful to your strategy. The key is to analyze the metrics and set key performance indicators adding value to your overall business process outsourcing strategy. A detailed study of important tasks and processes, your organization’s goals, duties of various departments involved, turn-around time and how it can be lowered without compromising on quality will help you a huge deal.
Your Objectives Should Drive The Decision Making-
Analyzing the purpose behind outsourcing is crucial. Ask yourself few questions to reach a conclusion.
- Do you want to outsource to cut down operational costs?
- Is outsourcing important for you because you do not want to manage an in-house team?
- Will outsourcing help you focus on tasks that are even more important than the process you are outsourcing?
Asking yourself these questions will help you devise a better strategy. You need to convey your business objectives to your outsourcing partner as well before you sign a contract with them. Communicating your purpose and goals will also help them provide you better options, which again leads to the improvement of your end-to-end business process.
· Can Your Outsourcing Partner Address Dynamic Needs-
The only thing that’s constant is change. The ever evolving and changing market can present challenges for your business in the long run and hence it is important to know if your outsourcing partner has the capability and experience to complement the ever-changing economic environment. Customer needs also change very quickly with the evolving market. Does your outsourcing partner have the ability to deliver solutions ensuring 100% customer satisfaction? Keeping these points in mind before signing a contract with a back office service provider will help your business in the long run with 100% ROI.
· Ask For References And Past Work Samples-
Ask for client references and gauge the vendor’s scope and quality of solutions. Besides, turn-around time and customer engagement practices are also required to be understood. Asking for previous work samples will help you get an idea about the end output you can expect from them; however, you need to respect any confidentiality agreements between the BPO service provider and its clients that may prevent them from disclosing the actual work. In that case, you can ask for any prototypes they may have ready for marketing and promotion purposes.
· Look Out For Their Client Management Practices-
Knowing about the BPO service provider’s client interaction and management practices is quite necessary before signing the contract. Do they operate in the same time zone as you and if not what’s the degree of overlap? Do they have a streamlined client interaction and management process in place? What’s their usual turn-around time for queries, feedback or to implement any ad-hoc change you may want them to implement for you.
· IT infrastructure & Business Certifications-
Information & data security is very important to you as a business. Your outsourcing partner will have access to your customer’s personal and financial data. Cyber threats have got sophisticated than ever and hence it’s of utmost importance that the data is in secure hands which calls for state of the art infrastructure with proper security measures in place. Besides, do not forget to check out certifications the BPO service provider has got such as Microsoft competency certification, ISO, and CMMI accreditation.
· Contract Negotiation & Service Level Agreements-
Negotiation of contracts and establishing service level agreements is critical to the success of your project. You need to take into account the scope of work, pricing model (fixed or variable), performance monitoring, KPIs (Key Performance Indicators), compliance management, reporting and very important dispute resolution in case any arises.
· Labor Related Laws-
It’s important to be abreast of the related labor laws of the outsourcing destination. There are countries where laws do not permit employers to terminate their employees. This kind of legislation can increase complexities in the long run and hence it’s important to study the labor laws of the country you want to outsource business.
· Workforce Assessment-
A workforce of the outsourcing partner you want to get into a contract with is quite important for both your short and long term plans and business objectives. Analyze the quality of the workforce, average work experience, and their exposure. It’s advisable to see into the hiring process of the BPO service provider, but making a visit or two to interact with the workforce will always give you a fair idea of what you can expect from your outsourcing partner. Apart from the workforce assessment, you should get to know about the training programs and modules your service provider follows for continuous development and enhanced quality of service.
· Cost Reduction-
One of the most factors behind outsourcing a process is cost cutting; however, it’s no longer the overwhelming motive as it was a few years ago. Businesses are putting more emphasis on quality of deliverables and the end output and not just on money. To be competitive with the current market, you also need to keep in mind the fact. Not to say that monetary aspects should be totally forgotten. The real deal is value for money. Besides, India has emerged as the pioneer of the business outsourcing industry. With a plethora of reputed business process outsourcing service providers offering services at reasonable cost, you have plenty of options available.
If you have any queries about business process outsourcing, or you wish to share your views, you can leave your comments in the comments section.