- Outsourcing helps reduce cost and improve productivity and efficiency when done right.
- There are several success factors in outsourcing and they include setting a strong set of KPIs and managing them.
- You will also need to partner with financially stable outsourcing companies with a competent workforce that's using the right technologies.
The outsourcing market is progressing in lightning speed. The business process outsourcing (BPO) industry has grown beyond call centres, churning billions of dollars in a year.
A lot of industries are outsourcing their processes, especially customer service tasks. All businesses are different, and hence, their needs vary. Here are a few examples:
- Telecom companies outsource their customer handling tasks and backend processes
- Banks outsource a part of their mortgage requests
- Insurance firms outsource their claim handling processes
- Multinational companies outsource payroll processes and more.
The beauty of outsourcing is that your customers or clients can tell that the company they are dealing with aren't the same handling their queries, claims, phone-connections, mortgages, payroll, and offering solutions. And, of course, why should they?
Outsourcing is an important management approach to reduce costs, streamline workflows, and increases the company's efficiency and productivity.
Studies have revealed that if companies outsource some of their extraneous processes to third-party service providers, they can save between 40% and 70% on their standardized business processes.
Contrary to popular beliefs, the cost reduction is not because they are outsourcing to low-wage countries, but because BPO companies tend to work at a higher efficiency rate than the in-house team. BPO companies recruit highly experienced and dedicated staff members who are trained in specific areas required by their clients.
If you are considering outsourcing as an option, you should look at these key areas.
1. Setting relevant and strong KPIs
If you want to outsource your business processes successfully, then you must first define a set of KPIs. Primarily, KPI is a metric that measures the performance of a company and determines how well the firm is meeting its goal.
Setting your KPIs includes creating a simple dashboard where you can regularly monitor the effects of BPO on your cost and revenue structure. As a business owner, you should always choose KPIs that are aligned with your strategy and have clear connections to the overall performance of your business.
One of the most important things to consider while setting KPIs is that don't have too many metrics as they can be harmful to your business. On average, businesses should implement less than five KPIs.
2. Researching BPO companies thoroughly
Before you sign the contract with any BPO partner, it's essential to research your options and market. You must look for references, if possible. The major factor you need to consider while outsourcing is the growth.
You must examine how well the BPO is performing so that you can get an idea if you're going to contract to a suitable partner or not. Visit the vendor before partnering, so that you can get to know about their work culture and compare it to yours. If not, there are other service providers.
3. Finding a partner with the right workforce
A right workforce is a key to the long-term success of a business. Therefore, you must check with your service partner whether it has the right talent in its firm or not.
A team is the backbone of the company, and a weak team has the power to take your business to a low. And we all know how much dedication and hard work is required to start a business. So, before partnering, you must ensure that your vendor has the required talent in their firm.
4. Use of latest and best technologies
BPO companies that make use of the latest and advanced technologies can serve you better, is efficient, more open to new markets, and can contribute to the development of new product or service.
It can also help you gain intelligent insights on business and marketing, giving you the highest chance of beating the competition. Along with a talented workforce, this success factor will help your business withstand any downturn.
5. Partnering with a financially sound BPO partner
Until your partner is financially sound, he won't be able to help you. Therefore, it's essential to look for BPO companies who are financially stable and secure. In event of a bankruptcy, the company can survive with the help of other organizations and can come out of the situation quickly.