Benefits of BPO

Lower costs

One of the main reason’s organizations outsource is cost reduction. Instead of buying IT equipment and hiring more employees to do different tasks, they can outsource the tasks to a service provider, reducing or even eliminating overhead costs.

Flexibility

Outsourcing non-core activities to a BPO allows a company to be far more flexible. Firstly, the company does not have to invest in additionally fixed assets and can convert them to variable costs. It also increases flexibility in resource management of the client company and helps in adapting to changes in the environment much faster.

Optimum utilisation of the resources:

BPO enables optimum utilisation of resources of scarce resources. Outsourcing helps to capture new efficiencies and reallocate the resources. This increases the efficiency and productivity. Availability of skilled employees and adoption of sophisticated technologies leads to utilisation of resources and productivity.

Cost Effective

Outsourcing some of the business processes and activities can be very cost effective for the client company. They save on investing in fixed assets and fixed costs. And they can redirect these funds for their core activities.

Also outsourcing to developing countries proves to be very cost saving for these companies. For example, if any large MNC was to outsource their IT services to India, they would save an average of 30% of the company’s expenses. This is quite a significant difference.

Improved Human Resource:

Improved HR is another great advantage of outsourcing business processes. Cost effective manpower is yet another important factor of importance in BPO. Companies today, require productive and efficient human resource that can generate economies of scale. Due to outsourcing business can save Human resource cost, depending on their priorities. Outsourcing gives a company the ability to get access to skilled and trained man power at extremely low rates.

Speed

One of the biggest advantages of BPOs is that they increase the speed of the business processes outsourced to them. They have a very good response time and the clients can focus on the core activities. This fragmentation of activities speeds up the whole process and is very important in cases like customer service.

Focus on core business areas:

Efficient business strategy is essential to take the business to the top. Outsourcing enables the top management level to hand over critical but non-core activities of the business to the third party. This facilitates top management level to concentrate on the core activities.

Skilled Manpower

When you outsource one of your business activities to a BPO, you are insured of exemplary services provided by skilled manpower. So if you outsource your supply chain management, rest assured your supply chain will be handled by skilled supply chain managers who are experts in their field. Same goes for IT services or accounting etc.

Cater to changing customer demands:

It is another great advantage of outsourcing the business processes. Many BPOs provide the management with flexible services to meet the customers’ changing requirements, and to support company acquisitions, consolidations, and joint ventures.

Global expansion

If an organization decides to enter an overseas market, some activities that require local market knowledge, national law expertise, or fluency in a foreign language can be assigned to a BPO company. It helps in boosting efficiency and quicker expansion.