Top 10 reasons for BPO - Care Analytics

In this blog, I thought we would discuss the business benefits of Business Process Outsourcing (BPO). BPO has been around for a while now and it continues to grow. BPO provides some significant advantages to the businesses who choose to pursue, and sometimes to go through the growing pains of incorporating them. Here are the top 10 reasons for leveraging BPO at your company.

  1. Increase revenue and cycle times

Whether it is by calling clients, processing files, underwriting loans, or handling inbound transactions, you can leverage BPO activities to increase revenue generation activities. Most companies think about BPO in terms of cost reduction or access to talent, but the highest returns in BPO are usually in revenue generation processes. Sales and Marketing, loan processing, customer analytics, and inbound sales support are areas where cycle times can be reduced to improve revenue. These should be areas to consider for BPO.

  1. Improve business focus

In addition to improved cycle time, improved business focus can help drive company revenue by allowing key resources to focus on company growth. Outsourcing redundant tasks that provide little business value will allow your team to focus on higher value, revenue generating activities.

  1. Lower, and create more predictable, costs

Let’s face it, outsourcing your operations are usually about lowering costs. The cost per unit of production can be dramatically lowered, even taking rework into account. These cost savings can then be used to invest in strategic business activities. Another advantage in BPO is that you can create predictable costs through contractual arrangements. This helps the financial team project actual costs going forward. This is a real advantage to the CFO as they manage cash flow.

  1. Improve productivity and throughput

One of the big advantages of BPO is that you can improve the quantity of output you can produce in a set timeframe, without having costs increase dramatically. You can blend an onsite and offsite team to double production. You can have a “night shift” to process files to be ready to execute the next day. You can also set up a 24 hour a day processing center to maximize throughput in a day. All of these scenarios allow you to process more in a given period of time.

  1. Customer Service – Increase the speed of resolution

Clients want responses now. Unfortunately, to staff a full call center to be available now, can be very expensive. BPO can help alleviate this situation. A BPO center can catch overflow when lines are backed up. Or, if you do not want a call center where the BPO rep speaks directly with a client (mortgages come to mind); a BPO center can process files and get them ready and if questions come in, the reps can email responses or forward them to whomever you assign.

  1. Access to world class specialists

In many industries, there is a shortage of qualified resources. Companies need access to trained, professional specialist that understand the industry and the process. Setting BPO centers provides access to many resources that have prior experience processing functional and/or industry focused tasks. Gaining access to trained professionals is one the biggest use cases for leveraging BPO services.

  1. Meet fluctuation demands quickly without hiring additional staff

For many industries there are cyclical fluctuations in demand. This could be due to seasonal demand, or fluctuating supplies. In some cases, there are irregular spikes in demand. In both cases, companies look for solutions to cover excess demand without having to hire additional long term staff. They often outsource a percentage of the business to the BPO firm, then sign contracts that if demand spikes, the outsourcing center will reassign workers to cover the excess demand. This way they keep the same amount of work for their onsite workers.

  1. Improve quality in routine processing

While most people do not associate quality with BPO, it can be an effective strategy due to existing quality control procedures at most BPO operations. This is even more so the case when mundane, routine operations are involved. In the US, workers can get bored, and then quality control falls far behind the standards set in overseas operations. BPO operations are used to, and are prepared for, routine mundane tasks, so it is an effective way to increase quality in these situations.

  1. Ensure compliance and share risk

Many BPO operations are more compliance conscientious than their US operational counterparts. This is because they are heavily audited, internally and by their customers. So you can actually help compliance issues by outsourcing operations to companies that specialize in that specific task. In addition, you can contractually share the risk if compliance is violated. This will help mitigate the risk and lessen the impact if there is ever a violation.

  1. Streamline operations / Accelerate the benefits of Re-engineering (BPE)

One the lesser discussed advantages of BPO is the ability to streamline the companies process by leveraging the BPO firms best practices. Or team the process of outsourcing with a business process engineering (BPE) exercise. Do not just outsource an inefficient process. Instead, go through the process of streamlining the process first, then outsource it with the vendor. In most cases, the BPO vendor can provide advice and guidance in creating best practices. You will then gain efficiencies from improvement of the process, and from outsourcing. Your productivity should dramatically increase.

BPO can be an effective way to increase your productivity, reduce costs, and gain access to needed resources, but the highest return may come from revenue generation activities. Whether that is direct sales and marketing activities, or just providing quicker backend processing so the direct teams can make the sale faster or more cost effective. BPO can also help in creating best practices, compliance, and you can share the risk of non-compliance with the BPO vendor. This is the reason that the BPO industry continues to grow year over year.

So that is all for this week. Please contact me at if you have feedback, comments, or ideas. Until next time. I wish you health, happiness and prosperity.

Tommy Simon
President and COO of Care Analytics

Care Analytics

Author Care Analytics

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