5 Underrated Benefits of Business Process Outsourcing With Maximum Impact
Blog: MattsenKumar Blog
Outsourcing has always been marketed as a service that saves time, reduces cost, and improves efficiency. From industry leaders with patented technology to minuscule start-ups with the improved paradigm, all of them are relying on BPOs to achieve their goals faster.
Outsourcing is often leveraged to make teams agile and have enough room to focus on core processes but isn’t it weird that organizations that have over 100K employees also rely on outsourcing. Well, they are certainly not looking to reduce team size or facing issues with employee management.
Business Process Outsourcing companies are offering industry leaders more than that is being portrayed in annual reports or market studies. These are underlying, hidden benefits that play a crucial role in pushing organizations forward. Not everyone talks about these benefits in open because these are somewhat the hidden sauce to success.
5 Hidden Benefits of Business Process Outsourcing
Here we take you through the varied un-mentioned benefits of outsourcing that has shaped multi-billion-dollar businesses. If not for these benefits, many organizations would have never outsourced processes. Let’s start with the most basic and try to understand them for better insight.
1. Outsourcing Mitigates Risk
When employees leave organizations, they walk-out of the door with all the training, experience, and insight. For organizations that are in a competition, where time and speed matter the most, employee turnover is really tough.
With outsourcing, things work differently. Often processes are outsourced to countries that are cheaper, have a dearth of job opportunities with an unlimited supply of talented employees. Lack of opportunity creates tough competition, which not only compels the talent pool to work hard but even motivates them to stick with organizations, hence reducing the risk of employee turnover.
Start-ups or industry leaders that are on an expanding spree rely on outsourcing to mitigate such risk and gain momentarily in a very short-time while their prime competitors spend valuable hours training and retaining employees.
In addition to this, the government of countries where outsourcing makes a huge percentage in job creation, are actively safeguarding the interests of outsourcing organizations. Central governments work in sync with varied state governments to ensure that operations at these centers are safely executed and all resources are protected against all kinds of challenges.
Often governments create Special Economic Zones to brew such industries, these zones have separate rules and regulations that favor the interest of outsourcing industries.
2. Government Incentives that Impacts the Final Cost
As mentioned, governments are taking pragmatic steps to fatten the spread of growth of the business process outsourcing industry. In varied countries, governments are now offering organizations tax benefits and additional resources to expand in tier 2 & 3 cities.
The government aims to create jobs in tier 2 & 3 cities, which stops migration and levels the uneven spread of the population. So, when the government offers such incentives, the organizations reduce their final cost due to increasing competition. These BPOs go out to organizations with the potential of outsourcing heavy processes and offer subsidized rates that work in everyone’s favor.
The stiff competition, keep these outsourcing organizations from increasing their price, which helps the primary enterprise save additional money without compromising on the quality of work.
3. Agile Crew with Unlimited Scalability Potential
All of us already know how organizations rely on outsourcing to focus on core processes. With BPOs taking away the requisite risk, employee training worries, and management challenges, primary enterprises are able to get more quality work in less time.
When it comes to expansion, BPOs are a trust-worthy entity because they are constantly innovating, try new technology and paradigms to sustain their position in a competitive market. With BPOs offering more insight into expansion with new technology and methodology, primary businesses can scale without worrying about running into untimely incidents.
Often organizations first work on creating a prototype of processes and then test it rigorously to make it better. Once organizations feel that their processes are strong enough to run them on their own, they outsource them. Since these processes become repetitive in nature and require no improvisation, they can be outsourced easily.
Once outsourced, primary businesses are left with ample time to focus on new innovation and expansion. The organizations continue with their paradigm of creating a prototype, strengthening processes, and outsourcing it, which enhances the overall speed of adoption.
4. Protection from Upcoming Cyberattacks or Bullying
Hackers have always eyed the companies with blue-chip stock as their prime target. Such popularity is not a good thing to have, first it leads to an increase in the cost of cyber-asset management, and second, it requires organizations to pay for additional services like ransomware insurance.
In the contemporary global economy, where all organizations are connected through servers and are catering to their duties without a fail, there’s an escape route, which can be accessed to mitigate or reduce cyberattack risks.
All these outsourcing contracts are always covered with Non-Disclosure Agreements, which means nobody knows where Amazon is getting its catalog enhancement services from. This is such an underrated opportunity when looking forward to minimizing exposure to cyberattacks.
Often these BPOs are located in SEZ in progressive countries like India and the Philippines, which can offer bigger companies an opportunity to safeguard their customer data. Organizations can start by outsourcing their entire server management, which means they maintain no physical server in their native country and divert all evil eyes.
Similarly, outsourcing can be applied as a tool on varied other processes too like payment management, where important credit card details are stored. Organizations responsible for handling insurance claims, medical history, or social security numbers can also reduce risk momentarily by relying on these organizations.
Things to look at when outsourcing such crucial server management processes
- Requisite compliance: Just like PCI DSS protects cardholders’ data, HIPAA protects healthcare information and GDPR ensures the protection of data of European Citizens.
- Past Experience: Organizations that have fulfilled PCI DSS and ISO requirements for several successive years are probably the ones you should go ahead with.
- Technology: BPOs that leverage the latest technology to offer the best encryption is perhaps your one-stop shop for all outsourcing needs.
5. Time Zone Advantage
Let’s consider X is an OTT platform that originated in Europe but after the huge popularity of its shows in countries like India, it plans to expand. Well, Indian land is already being dominated by players like Amazon Prime and Netflix, which receives additional competition from homegrown Hotstar.
So, due to uncertainty over business opportunities, the “X” OTT platform plans to launch an Adhoc program for India. This program is more like a hit and trial method, where they are reliant on the results for further expansion.
Instead of moving their entire team to India and bootstrapping from scratch, they will prefer a studio that already has a base in India. The studio will take instructions, specified guidelines and create a show that is similar to the final products of the X platform.
Now imagine, a US-based company that has customers from Europe, China and India, needs to maintain a 24X7 contact center that caters to audiences from the entire globe. Well, maintaining a contact center in the US, itself is a very expensive task, and making it run 24X7 will also attract government penalties too.
Outsourcing helps organizations get over such challenges. Countries like India and China have special economic zones, where offices can function round the clock, without any hindrance from government agencies. In fact, governments provide additional support to these zones, by reducing electricity tariffs, improved infrastructure, subsidized land, and additional tax benefits.
By relying on BPOs from these SEZs, primary businesses can offer their customers from every corner of the globe quality support round the clock. By letting customers reach support at all hours of the day, organizations can improve customer experience and retain customers for a longer period, generating more income from them.
Final Thoughts on Hidden Benefits of BPO
These are some additional benefits that every organization enjoys with Outsourcing but only a few speak off because these are a hidden shortcut to success. If BPOs were not that effective or have lesser benefits to offer then Fortune 500 companies would have preferred building an in-house team instead of outsourcing the most important processes that data management and data analysis to countries like India and Africa.
BPO is stated to have experienced its golden era in the 2000s but for varied industry leaders, the best time of outsourcing is yet to come. Many believe the adoption of SaaS and Cloud will only accelerate the adoption of outsourcing.
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