What is a BPO? A guide to Business Process Outsourcing

Seen the term BPO in passing and wondered what it stands for? Business Process Outsourcing is the method of appointing a specialist to orchestrate a function of an organisation’s operations, normally as the organisation (a white label approach). At the Whistl Group we act as a third-party logistics provider for processes such as inbound or outbound contact centre support, order fulfilment, product sampling, mail advertising and customs clearance.

In this guide we will detail the wider definition of, and types of, outsourced business processes.

What are the different types of BPO company?

The business process outsourcing industry is diverse. Whichever industry you operate in, business model you deploy or customer base you serve, there are expert providers to help you remedy operational challenges or strategic aims, catering for the following areas:

Back of office operations (core business support functions), such as:

• Product sourcing
• Manufacturing and supply chain
• Inventory management
• Product storage and eCommerce fulfilment
• Parcel, packet and mail carrier management
• Proactive Tracking Support
• Enhanced Delivery Management
• Accounting
• Payment processing
• IT services
• Human resources and recruitment
• Employee health and wellbeing
• Regulatory compliance
• Quality assurance (QA)
• Consultancy

Front of office operations:

• Customer-facing technical support
• Product-related customer service
• Inbound and outbound contact centre solutions
• Sales and marketing agencies

Another variable to consider is the location of the BPO company. It could be an onshore setup (the BPO is based in your country), off-shore (based overseas) or near-shore (in a neighbouring country). Companies may wish to work with an overseas third-party outsourcing specialist to lower labour costs, benefit from tax savings, to minimise cross-border red tape or to leverage a culture’s core competency.

What are the benefits of working with a BPO specialist?

Before outsourcing some of your business operations, first it makes sense that you consider which current pain points and/or future perceived challenges are leading you to want to work with a BPO. Outsourcing front and back office operations are a major commitment and usually based on a minimum yearly contract, therefore it makes sense that you compare your company’s trajectory from profit, loss and return-on-investment perspectives, with an in-sourced approach, to that with a shift to an outsourced approach. Moreover, conducting CSAT/NPS customer satisfaction surveys and user group meetings can help identify gaps in service quality, which could cluster within a business function, indicating this is the operational area crying out for improvement.

Organisations considering to outsource can have a wide range of strategic objectives, such as:

• Increasing customer acquisition or retention
• Minimising customer call centre waiting times
• Increasing cross-sell and up-sell
• Avoiding overstocking or understocking

Whereas other companies may be at a stage in their growth that they need to either invest in a new warehouse, expand their contact centre operations or upskill their existing team on new product developments.

Whether you have a strategic objective to meet, or are at a critical stage of business growth, outsourcing with a BPO company is less capital-intensive, because you typically only pay for what you use. Working with an outsourcing specialist also allows you to better-focus on your own operational strengths, such as new product development, sales and marketing (although some companies even outsource these elements too). Many clients will opt for a hybrid setup, in which the BPO complements the client’s own operations - this is particularly useful for firms that experience volatile demand throughout the year, thanks to peak trading seasons.

What can be the disadvantages of working with a BPO specialist?

Working with a BPO means your customer or product data may have to be stored in other locations. As a result, your Data Protection Officer will have to ensure your customers are informed of this. However, some specialists such as BPO call centres are flexible enough to work with your own cloud-based technology such as your CRM, order management system or warehouse management platform.

Furthermore, in rare cases, outsourcing can lead to customer experience, or product quality degradation. In these scenarios, your customers will likely notice the reduction in performance. To avoid this, it makes sense to align expectations at a pre-contract stage and develop KPIs for your appointed BPO specialist that are specific, measurable, achievable, realistic and timed (SMART).

What are the latest trends in the BPO industry?

The global business process outsourcing market size was valued at USD $261.9 billion in 2022 and is projected to expand at a compound annual growth rate (CAGR) of 9.4% from 2023 to 2030.

BPO services are popular with the online retail, healthcare, IT, telecommunications, Banking, financial services and insurance (BFSI) sectors. Out of all of the type of BPO, customer service represents the largest market share (30%), followed by finance and accounting and then human resources.

Due to rising overheads, enterprises are focusing on improving efficiency and are benefiting from the usage of cloud computing and artificial intelligence (AI).

What makes the Whistl Group unique as a BPO provider?

Whistl provides a unique portfolio of outsourced operations solutions for eCommerce retailers, the public sector and various other industries, including BPO call centre services and end-to-end logistics. From customer data handling to customs clearance and delivery management, Whistl can help you enhance your customer experience.

Get in touch with our team today to learn more about Whistl’s business process outsourcing solutions.