Benefits of Business Process Outsourcing (BPO) Services
Lots of technological innovations have made possible a number of new business models such as EPO, ITO, BPO, KPO, LPO, etc. that allow organizations to be more cost-effective. One such model that has soared to popularity is business process outsourcing or BPO business model (do not confuse with BOT meaning), which is the act of delegating a particular work to BPO companies.
Worldwide Demand on TOP Business Process Outsourcing Companies
Business process outsourcing services according to the BPO business model have become especially useful for lines of work that utilize technology and the internet because these are accessible in virtually any part of the globe. For instance, the BPO business model has become popular for call centers, since these only require the use of voice call technology. Business process outsourcing services and BPO business models are also become popular for IT services, as it only requires the use of computers. That is why most businesses these days, especially small ones, are looking for the best BPO companies (or even TOP business process outsourcing companies) for midsize companies as it opens completely new opportunities in front of them. Not only it is a great way to save up some money, but these practices are also great when it comes down to finding and hiring new talents with the assistance of BPO companies. They turn to outsourcing practices of subcontracting with BPO companies and BPO business models in particular as the best possible option for their future.
Let’s take a closer look at what is business process outsourcing services in general and take a more focused examination of information technology services in the context of the BPO business model. We then take a look at the advantages of cooperating with BPO companies for your IT service needs.
What Is BPO Business Model: IT-BPO Outsourcing Market Overview
What is the BPO business model definition? Business process outsourcing (BPO) is the practice of delegating or contracting the responsibilities and operations for a specific business process to some third-party vendor (BPO companies). The BPO business model industry worldwide is huge and is steadily growing. According to Grand View Research, the global BPO business models market was valued at 195.2 billion US dollars in 2017 and is growing at an annual rate of 7.4%. This is expected to grow to 343.2 billion USD by 2025.
However, why do companies use services of TOP business process outsourcing companies in the first place? What makes BPO business models practice so appealing to hundreds of companies all around the globe? First of all, to use BPO business models it is a great way to significantly cut your expenses as specialists from overseas often tend to charge less for their services due to exchange rate differences. Secondly, business process outsourcing services allow you to broaden your search party and find a truly exceptional specialist for your job since your country might be lacking those. Finally, the BPO business model is an opportunity for you to delegate less important and routine tasks to an outside contractor while you will be working on the more urgent ones. What do BPO companies do, you might ask? Well, the TOP business process outsourcing companies do pretty much anything you want to! By hiring BPO companies you can delegate to its specialists any business process your company has.
Ukraine is a relatively new player between TOP business process outsourcing companies but is a particularly promising country for IT-BPO services. According to the Financial Times, Ukraine’s IT industry is rising at a whopping 16% annually, with its IT market in 2017 amounting to 3.6 billion USD. In 2018, Ukraine housed more than 100,000 IT professionals.
Business Process Outsourcing Examples: Types of BPO Services and BPO Companies
Business process outsourcing services may be classified into different types. Let’s take a look at three common ways BPO business models are classified and learn how to operate with business process outsourcing services.
However, it should also be mentioned, that lots of people do not really see the difference between IT outsourcing vs BPO meaning (BPO business models represented by BPO companies). Despite being a slight one, the difference exists nevertheless. BPO business model usually implies delegating tasks that are not crucial for your business in general to BPO companies, while in the case of IT outsourcing you can delegate any task you want or need. So to some extent, you can say that BPO business model represented by TOP business process outsourcing companies is a small branch of outsourcing in general and IT outsourcing in particular.
By Services Offered
BPO companies may be categorized based on the types of business process outsourcing services and solutions they offer.
Back office process outsourcing is the outsourcing of tasks that are considered support and administrative functions for an organization. This typically comprises non-customer-facing functions, hence the term back office. Among the processes considered back-office work are accounting, human resource, compliance, data encoding, payment processing, and the like. Back office BPO companies focus on performing these tasks on behalf of different organizations so that the said organization can concentrate on generating revenue successfully using one of the BPO business models.
Front office process outsourcing is the outsourcing of tasks that are considered the main revenue-generating functions within an organization. Typically, this is comprised of processes that involve direct interaction with clients and/or customers, hence the name front office. Among the processes typically considered front offices are marketing, sales, business development, customer service, technical support, and market analysis and research. Front office TOP business process outsourcing companies focus on performing these customer-facing tasks for companies so that they can focus more on strategizing and improving their offerings and services due to BPO business model.
Horizontal process outsourcing is the performance of tasks that are common across organizations in different industries. For example, human resources are a horizontal function as it is present across different industries. Horizontal BPO companies, therefore, focus on performing such horizontal tasks, and although they may have clients coming from different industries, they perform the same function for each of their clients according to BPO definition.
Vertical process outsourcing is the performance of the set of tasks specific to an industry or business domain. For example, vertical BPO companies that services retail companies may have responsibilities to perform tasks that include inventory management, sales, recruitment, security, surveillance, and the like. Although each of these tasks may also be applicable to other industries in BPO business models; vertical BPO companies focus on performing these tasks specifically for companies in the specific industry or domain that they are specializing in.
By Geographic Location
Offshore outsourcing is when a client delegates the performance of certain tasks to BPO companies from a geographically distant location, such as from a different country. In this set-up, the resources from BPO companies that perform the outsourced tasks remain in the premises of the vendor’s building, but they report directly to the assigned resources of the client company. In the case of most IT offshore TOP business process outsourcing companies, the vendor also provides the software licenses needed for the development of whatever product the client wants to be developed. These BPO companies’ resources also use the machines and work stations provided by the vendor but perform tasks for the client.
Onshore outsourcing differs from the other BPO business models because the resources allocated by the vendor for the client are asked to report to the office of the client itself, or else to a nearby office. A client-vendor BPO business model set-up is typically considered as onshore BPO companies outsourcing when the client and the vendor’s provided resources are working within the same country, or if the vendor and the client are within the same country, hence the term onshore.
Nearshore outsourcing is a compromise between offshore and onshore outsourcing. Nearshore outsourcing is typically characterized by the client and the vendor (BPO companies) belonging to different countries, but these countries are typically neighboring or very near each other. This BPO business model set-up eliminates some of the problems encountered with offshoring, such as time zone differences and possibly language and cultural barriers. However, the vendor’s resources also remain in their (vendor’s) office and make use of their work stations.
By BPO Business Model
Project-Based Outsourcing is when the client delegates the full responsibility of completing a project to the vendor. With this BPO business model, the vendor oversees the whole project to its completion following only the guidelines and requirements set by the client. In the context of BPO business models, the vendor performs business analysis and project management on top of the development services typically offered. Usually, the client’s involvement during the development process is minimal.
The Dedicated Teams BPO business models are when the vendor provides resources skilled in the specific technologies that the client requires for the project, but the client remains in full control of the project. With BPO business models, therefore, the resources provided by the vendor practically serves as an extension of the client’s team.
Benefits of Business Process Outsourcing Services
The success of the business process outsourcing services (BPO business model) speaks volumes of the benefits that it actually brings to organizations around the world. Here are some of the benefits that BPO companies introduce to clients:
- Improved cost efficiency – The typical set-up of BPO business models is that the client usually comes from a country where the business process outsourcing services are expensive, and the vendor comes from a country where the said service is substantially cheaper, likely due to a generally lower cost of living.
- Improved operational efficiency – With BPO companies, the resources are typically well-trained and even highly experienced in performing the tasks being outsourced.
- Higher employment rate – Typically, since the business process outsourcing services being offered is expensive in the country in which the client resides, this implies that the demand for professionals skilled or willing to perform these tasks exceeds the actual supply of applicants for these positions, what is RPO concerned issue.
- Better coverage – BPO companies typically have a large pool of resources at its disposal, each possibly having multiple skills and able to perform a wide variety of tasks.
- Improved security – Not only are the resources of a TOP business process outsourcing companies highly skilled in performing the outsourced functions but the BPO companies themselves are also very knowledgeable with the landscape and domain they are servicing.
Explore the BPO Business Models Now
The business process outsourcing services industry is on an aggressive rise, and this is primarily led by the success and proliferation of information technology outsourcing. The BPO business models are seeing worldwide success and the amount of BPO companies is expected to continue rising substantially in the next couple of years. We’ve laid down the BPO business models definition and examined what are BPO companies. We’ve taken a look at some trends within the BPO business model in TOP business process outsourcing companies and we’ve seen that the BPO business model is a general term that has a large number of variations. We’ve seen the different types of business process outsourcing services, categorized by service offered, geography, and BPO business model. We’ve also seen the various advantages of BPO companies and what it offers to companies that adopt it. Having digested all of this information now would be the perfect time to start delving into BPO business models.
If you’re looking for one of a variety of BPO companies for a certain project you have in mind, then you couldn’t have gone to a more perfect place. We are Mobilunity, a provider of IT business process outsourcing services based in Ukraine and a representative of BPO business models. We have a pool of Europe’s brightest and most highly skilled developers and IT professionals who can help bring your project to completion and help drive your company towards success with BPO business models. What’s even better is that our expertise comes at a very affordable price, because we want to give you the perfect balance of cost efficiency and resource quality, unlike other BPO companies. With Mobilunity’s BPO business model, you’ll get much more than your money’s worth.