Business Process Outsourcing (BPO) is a model where a company entrusts its business operations to an external organization. BPO represents a comprehensive outsourcing solution that necessitates close cooperation between the service provider and the client.
Unlike task-specific outsourcing, which involves particular projects with defined timeframes and budgets, BPO generally does not operate under strict time or budget limitations. Instead, BPO entails the transfer of an entire functional area of a business to the service provider, allowing for more integrated and sustained involvement.
The term BPO typically refers to outsourcing high-level functions, such as financial management, human resources, marketing, and legal support.
In summary, outsourcing is beneficial in about 90% of cases. Its main advantages include:
Business process outsourcing (BPO) is becoming increasingly diverse, with new areas emerging regularly. Commonly outsourced functions include logistics, recruitment, document management, maintenance, customer service, call center operations, programming, accounting, and more.
While the specific processes vary by industry and organization, several BPO examples are widespread across many large companies.
One of the fastest-growing sectors in Business Process Outsourcing (BPO) is call centers or CRM process outsourcing, which involves managing incoming calls, optimizing call handling, and ensuring 24/7 service availability. The global call center outsourcing market alone was valued at approximately $105.5 billion in 2023, reflecting strong demand for efficient customer management solutions.
Many Western companies outsource call centers to regions with lower labor costs, like Eastern Europe, which is known for providing quality service at competitive prices. Services offered by Simply Contact include BPO, omnichannel and multilingual customer support, technical assistance, front- and back-office support, and more.
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In large companies, creating a high volume of documents is complex and resource-intensive, involving specialized equipment and technology. Outsourcing document production can reduce costs by about 15% while improving quality and efficiency.
Outsourcing human resources involves the entire cycle of recruitment activities, such as posting job vacancies and accessing resume databases. This approach allows companies to focus on core activities while ensuring efficient and specialized handling of recruitment processes.
Outsourcing accounting functions is increasingly popular due to the liability shift for potential accounting errors. Working with an outsourced accounting firm often means contractual liability for any mistakes, offering a more secure option than in-house chief accountants.
Many companies now outsource specific logistics tasks to specialized firms with the necessary experience and infrastructure. This can include transportation, warehousing, and distribution, allowing businesses to benefit from the outsourcer's expertise and resources.
These examples illustrate how BPO can vary widely but typically aims to enhance efficiency, reduce costs, and allow companies to focus on their core business areas.
Many large international companies use business process outsourcing. Here are some examples:
Henry Ford realized early on that no company could do everything itself. He initially wanted to oversee all production stages personally but found it too costly to manage every aspect of the company's operations. Eventually, he sought help from independent companies to take over some tasks. Ford only makes 30% of its components, while the rest is outsourced.
IKEA is another company that benefits from outsourcing. Although it doesn't have its own factories, it works with over 2,500 quality suppliers. IKEA also outsources its logistics functions to another company.
This airline outsources various tasks such as airplane repair and maintenance, baggage handling, ticket booking, and catering. These services are not performed by its staff but by other firms' temporary workers.
Around 70,000 temporary workers are involved in testing Google's self-driving cars, preparing documents, enhancing products, analyzing data, and managing marketing campaigns.
Firms like Procter and Gamble, Levi Strauss, Cemex, Microsoft, Norway Post, and Barclays outsource financial services. They work with providers like IBM, HCL, Xerox, Capgemini, Cognizant, Accenture, Genpact, and TCS.
The cost of outsourcing business processes varies based on the type of service, location, and the specific needs of the client. Below is a list of average BPO costs for various regions:
These figures provide a comprehensive overview of the BPO market pricing across different regions for the previous year.
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Outsourcing allows you to select from a diverse range of companies or experts who best suit your needs, allowing you to receive quality services at a set price without incurring additional costs or obligations.
At Simply Contact, our team consists of active, young, and ambitious specialists who are proficient in English. We possess extensive expertise in various sectors including telecommunications, financial services, aviation, e-commerce, and retail, enabling us to manage projects of any complexity.
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