Business process outsourcing (BPO) means relying on third-party contractors or cloud-based BPaaS (Business Process as a Service) solutions to carry out some of your business operations. It can be back-office processes – such as accounting, payment processing or IT services – or front office ones, such as sales or marketing.
The value of the BPO market is constantly growing and is projected to reach $ 262.2 billion by 2022. Some of the most frequently outsourced areas include IT, healthcare, finances and HR. The biggest market is currently the United States, and the most rapidly growing one – the Asia-Pacific region.
Because business process outsourcing is becoming so huge, changes in the industry are inevitable. How will the future of BPO unfold? And what are the main benefits of outsourcing for your business?
The market is currently in a transition phase in terms of the type of business operations that are most commonly outsourced. Back in the day, companies would only outsource their low-risk operations – such as data entry – to external contractors. Gradually, with the technological boom and the rising importance of online communication, more significant processes became subjects of outsourcing – e.g. customer service.
As organisations started recognising the remarkable cost benefits that outsourcing brought, the spectrum of outsourced work became even wider. Nowadays, many businesses gravitate towards outsourcing even their high-end functions, such as IT services and research. Where is this shift coming from?
There are several reasons, but probably the most important one is the increasing specialization of business and emerging new mindset of business owners and CEOs. This mindset dictates to focus company resources on the key operations that they specialize in. For a software development company, it might mean focusing on releasing high-quality software, while outsourcing marketing, accounting, and HR. For a manufacturer, it will be a focus on engineering and releasing best possible product – and outsourcing processes such as deliveries and customer service to third-party specialists.
Aside from the business climate, the development of new technologies is an important factor for the growing importance of business process outsourcing. The emergence of BPaaS business model allows businesses to not just outsource their processes to be done by other people – but also automate them by using cloud-based tools to perform certain operations in a standardized way.
If you are a business owner, you are likely thinking: ok, but what are the potential benefits of business process outsourcing for my company? It may seem like a lot of hassle to organize your communication with off-shore partners and overcome cultural barriers – and for the sake of what?
We’re glad that you asked. Here are some of the most frequently mentioned advantages of outsourcing, according to Flatworld Solutions:
As business process outsourcing becomes recognized for all of the above advantages, the scope and characteristics of the outsourced work evolve. Here are some major trends that will be defining the nearest future of outsourcing:
Looking to outsource software development, audit of your working product or optimizing your business operations? Contact us to arrange a free Discovery Call – let’s see what we can do together!
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