How BPO Companies Aid Corporate Strategies
Does your corporate strategy include BPO? If it doesn’t, then now might be the time to include BPO as part of your strategic plan. A forward-looking strategy is vital to the success or failure of any business and BPO provides the flexibility to respond to future unknowns and global market demands.
What is BPO?
BPO or Business Process Outsourcing involves off-loading specific business functions and responsibilities to a third-party service provider. BPO is typically categorized into back office outsourcing, which includes internal business functions such as human resources or finance and accounting; and front office outsourcing which includes customer-related services such as client outreach and customer life-cycle management.
The organizational flexibility that’s required for forward-looking strategy may be determined by any one or more of a number of criteria. For some companies, BPO may be all about cost efficiency; i.e., being able to augment or delete personnel requirements as the market dictates. For other companies flexibility may be about reducing time required for specific tasks and improving quality control over those tasks.
Regardless of how your company defines your strategic plan and determines the advantages needed to make BPO desirable, every stakeholder in the company should understand what needs to be done within the organization to fulfill that plan. And, every stakeholder should be committed to helping that plan to take shape. If the BPO strategy is right, everyone will benefit and your business will flourish.
Defining BPO Strategy
It is a mistake to enter into BPO arrangements without a clear BPO strategy that answers these questions: (1) what is your rationale for BPO? (2) what benefits do you expect? By applying some forethought and planning upfront and by taking the time to determine best outcomes, as well as best resources to provide those outcomes, the chances of getting a good result are considerably improved. Remember that your BPO strategy should be a plan for achieving a positive transformation of your company’s business processes.
In general, BPO strategy operates “horizontally” across the organization, but is driven by top-level strategy and interacts with “vertical” processes. What this means is that the BPO strategy must be enforced by top-level decisions and policies, so, that, in theory at least, the decision to outsource should have already been determined as beneficial and desirable to the overall corporate business plan before that decision is pushed vertically down the organization and horizontally across the organization for implementation.
It is up to the mid-level horizontal departments and vertical process managers to determine the best strategy for their areas of responsibility in keeping with the top-level decisions and policies. It will be these managers who will ultimately hold the keys to providing a well-thought-out and well-articulated sourcing strategy thus enables the transformation of their departments.
It should be remembered that organizational transformation generally requires changes to five key elements:
- People – changes to skills and/or motivation levels and/or numbers of its staff
- Processes -- the way in which work is performed, process automation and metrics
- Technology -- the degree to which work is automated and/or facilitated by BPO
- Organization – the formal management and responsibilities of in-house staff
- Infrastructure – the nature and locations of physical infrastructure supporting the work and processes
Most management consultants will tell you that for operational change to be truly effective it’s important to look at multiple dimensions prior to attempting to implement the change. Whether you’re introducing new technology, outsourcing processes, or some combination of the two, it pays to answer some important questions.
Our White Paper, "Defining a Successful BPO Strategy” provides an outline to help you develop an effective BPO strategy for your company.
Editor’s Note: This post was originally published in October 2014 and has been updated for freshness, accuracy, and comprehensiveness.