Business Process Outsourcing (BPO) is the practice of subcontracting different business processes to a party outside the company. BPO companies are distinguished for their delegation of back-office and front-office operations.
Moreover, the BPO industry will only increase its value in the coming years. For example, from 2016 to 2017, its global market value increased by 12 billion dollars. In 2017, its value was already at 88.9 billion US dollars.
With an industry that’s on the rise, why are companies opting for BPOs?
According to Statista, a survey found out that more than 50% of business leaders outsource to BPOs to cut costs.
When you outsource your business’ functions, you also save resources and time. For example, when it comes to labor, you lessen labor costs because you don’t have to recruit, hire, train, and pay a lot of overhead costs.
Also, you don’t have to acquire new technology or build new infrastructure to do the tasks you can outsource to a BPO.
There are many reasons why BPOs are a crucial addition to increasing a company’s competitiveness in the market.
One example is it helps increase a company’s efficiency. It is also a huge reason why companies outsource. Businesses can delegate office functions that are usually repetitive and laborious and are usually not income-generating to a company.
In that sense, companies can focus more on stuff that matters, like managing more projects, negotiating new contracts, and much more.
Another thing is that when you outsource, you increase your company’s productivity. One, redundant tasks are delegated to another team, giving your employees more time to focus on core and meaningful tasks for the company. Also, they’re able to focus on tasks they are best doing.
In effect, it gives the company a boost in general productivity and competitiveness in the market.