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Business Process Outsourcing or BPO is a rapidly growing subsection of the outsourcing industry. BPO encompasses a contractual agreement with a third party service provider to absorb an otherwise internal business process. The arrangement is typically cost-effective to the outsourcing party, while the staff, facility and functional expertise are the provider’s core competencies. Generally speaking, BPO is either Front Office or Back Office.

Front Office outsourcing involves the provision of services like inbound or outbound telephone conversations, electronic mail, fax, chat, video and other forms of direct interaction with a client’s customer base. Typical applications of Front Office outsourcing include sales, customer support, technical support, collections, market research and scheduling/appointment setting. Back Office outsourcing includes, but is far from limited to, essential support tasks like data entry, claims and payment processing, HR support services, accounting services, creative services, IT support and technology development. The key difference between Front and Back office BPO is direct interaction with the end customer.

Advantages and Disadvantages of BPO

Like any business solution, Business Process Outsourcing should be done thoughtfully. You should know up front that the clear and measurable advantages of outsourcing are accompanied by certain business challenges that must be considered and planned for. The list of advantages includes:

  • Core Competency Focus – Think of outsourcing as a form of delegation. Both organizations are doing what they do best while partnering to provide more profitable results and a better customer experience.
  • Productivity Improvements – Focused organizations are more efficient and as a result, more productive. This applies to the company doing the outsourcing (the client), as well as the outsource service provider,
  • Reduced Labor Challenges – The service provider absorbs the HR and labor challenges of what is often a larger BPO team. The client need not worry about managing attendance, employee retention, payroll and employee relations. The services are provided turn-key.
  • Increased Revenue – Front Office/contact center BPO’s feature their ability to drive higher levels of customer engagement driving higher sales, collections and customer lifetime value as a competitive point of differentiation.
  • Cost Savings – There are a number of ways to calculate the cost savings one should expect from a BPO. These include lower costs per production hour, lower cost per sale. Lower support costs per customer, lower facilities and administrative expenses. There is also a cash flow advantages as clients gain favorable float since employee payroll costs are included in monthly billing versus weekly or bi-weekly.
  • Innovation and Expertise – To remain industry competitive, Business Process Outsourcing firms must hire the best and constantly upskill their personnel to compel constant innovation and solution development.
  • Increased Capability – Without capital investment BPOs immediately expand your human resources, geographic reach, physical capacity and on-demand technology.
The perceived challenges of BPO, especially those offshore, include:

  • Attrition and Loyalty – It is believed that BPOs have higher rates of employee turnover than captive (non-BPO) companies. There are several factors that could influence this: 1) BPO’s have contractual relationships with clients which creates a perception of risk in the minds of employees. 2) Competitive recruiting of BPO talent. 3) Entry level BPO jobs may not be match with an employee’s career aspirations and academic training.
  • Tribal Knowledge – As a third party, a BPO may not start with in-depth and historic knowledge of the work being outsourced. This will take time and contractual stability to acquire.
  • Less Strategic Alignment – Quite often the BPO is considered an expendable service vendor rather than a strategic partner. This not only reduces the likelihood of strategic alignment; it can reduce value of the process improvement and customer intelligence the BPO can offer.
  • Management Logistics – Since the BPO can be in a different city or even a different country, a concerted effort is required to build relationships or effectively schedule direct communication between the client and BPO team. Occasional travel could be required, the cost of which should be factored in your decision.
  • Off Shore Language and Cultural Differences – If the BPO is off shore, both the BPO and the client’s teams will need to make an effort to understand the national culture of the other.
  • Poor Quality Control – This perception is typically linked to three factors: 1) The BPO usually has one portion of a process and only measures quality within that portion. 2) Employee attrition creates a less tenured workforce, often making mistakes as they move through a learning curve. 3) Quite often, the client does not have a structured quality assurance program and does not invest in the BPO acquiring these resources.
  • Off Shore Hours – Since the two most popular locations for off shore BPO are the Philippines and India, there would be a substantial time zone gap. This is less concerning when the work is back office or business to business, however, Front Office work that focuses on consumer markets require real time interaction. As a result, graveyard shifts are the rule, rather than the exception, in off shore BPO.
  • Restoration Challenges – Once the work is outsourced, if the client wants to re-absorb it, they are often starting from scratch.
client engagement

Outsourcing with the Client Growth in Mind

Connext provides customized outsourcing solutions to streamline the business process and unlock client growth by providing expert back office and technical support that streamline the workflows. Connext Global Solutions provides offshore accounting and financial services support at all levels with our custom outsourcing solutions.

Outsourcing: Redefined

Connext Global Solutions redefines the concept of outsourcing. The company provides custom outsourcing solutions by providing high caliber back office and technical support from our industry experts that streamline business workflows. Connext builds, manages, trains, and automates processes and aligns them to the client’s needs.

Why Outsource Services to Connext Offshore Teams

Connext Global Solutions provides offshore outsourcing services support at all levels with our custom outsourcing solutions.

  • Access to Top Talent

Connext has a tremendous talent pool of employees. Connext actively sources the talent through a multi-tiered recruitment process of targeted screening, testing, and interviewing based on client recruiting procedures or specific assessments (including AI-driven tests), studying and testing on client specific training aids and manuals, conducting cloud connectivity training sessions with client team. The client personally selects highly-qualified dedicated offshore team members to supplement their current staff. The comprehensive recruitment process ensures the client the highest level of talent for the required position.

  • 100% Client Dedication

Connext has a high level of business and client commitment. The company has a fully customized approach. With a 100% dedicated offshore team to provide back-office support, the client can focus on core functions of the business.

  • Structured Training Methodology, Setup and Monitoring Metrics

Connext helps manage a client’s team as if it was theirs and makes sure the performance matches or exceeds that of your local teams. Connext, in close coordination with the client, uses three standard productivity, utilization, and monitoring metrics to track employee performance.

  • High Employee Engagement

Outsourcing with Connext means having to partner with a company that has world-class employee retention. Connext prides itself on its world class work retention rate. The monthly average of employee retention during the first quarter of 2021 was 98.4%.

  • Data Security

Connext is committed to providing the best client experience and fully understands the level of responsibility of being entrusted data, information security, availability, processing integrity, confidentiality, and privacy of data. The company is HIPAA and SOC-2 Compliant.

The company ensures the clients that proper auditing processes, operational controls, industry-leading digital security systems, proper security, management, and data protection are in place.

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