At the beginning of the conversation it is necessary to know
- What Is Business Process Outsourcing (PBO)?
- Types of Business Process Outsourcing (PBO)
- Categories of Business Process Outsourcing (PBO)
- COVID-19 is changing the ways and habits of doing things – (New Normal)
- Why Businesses do Outsource their Processes?
What Is Business Process Outsourcing (PBO)?
Business process outsourcing (BPO) is that the practice of contracting a selected work process or processes to an external service provider.
The process and services can include and not limited to:
- Finance and accounting,
- Marketing and creativity,
- Customer Services,
- Sales support,
- Debt collection Services,
- IT services,
- Engineering and drafting
- data recording,
- social media marketing,
- Legal services,
- customer support, and more.
Business process outsourcing (BPO) mainly considered for those supplementary functions rather than core functions but still could apply for either technical or non-technical functions.
From Small and medium size entities to massive Fortune 500 companies, businesses of all sizes outsource their processes, and the demand continues to rapidly grow, as new and innovative services are introduced, and businesses seek advantages to urge before the competition. BPO can be an efficient and effective alternative to labor migration, allowing the labor force to remain in their home country while contributing their skills abroad.
Types of Business Process Outsourcing (PBO)
Business BPO shall be divided into two main types of services:
- Back-office services include internal business processes, such as billing or purchasing.
- Front-office services pertain to the contacting company’s customers, such as marketing and tech support.
BPOs can combine these services in order that they work together, not independently.
Categories of Business Process Outsourcing (PBO)
- The BPO industry is divided into three categories, according to the location of the vendor as follows:
Offshore vendors are located outside the borders of the company’s own country. For example, a U.S. company may use an offshore BPO vendor in Egypt.
- Nearshore vendors are located within countries that near and neighbor the contracting company’s country. For example, in the GCC, a BPO in Egypt is considered a nearshore vendor.
- Onshore vendors operate within the same country as the contractor, although they may be in a different location (city or state). For example, a company in Dubai, UAE, could use an onshore outsourcing vendor located in Abu-Dhabi, UAE, or in Sharjah, UAE.
A business are able to do total process optimization by combining the three categories.
COVID-19 is changing the ways and habits of doing things – (New Normal)
When the COVID-19 outbreak first hit the in December 2019, many were uncertain what would become of the current normal and how it would impact many industries. It was understandable some time past to possess doubts if the economy would recover once the nationwide lockdown was over. It is all but certain that BPO industry will rapidly grow in the coming months. During the first few weeks of the quarantine globally, selected sectors and industries were only allowed to operate. These were mostly for those entities that provide essential products and services.
Accordingly, BPO service providers could operate during the early stages of the Covid-19 quarantine period. However, they were required to either avail accommodation to their employees or transformation into a Work-From-Home model. Many BPO service providers globally, including Expert Zone, promptly applied contingency plans to ensure smooth operation. On parallel, while keeping minimal operational disruptions they did not compromise the safety and health of their personnel.
Different industries badly affected by Covid-19, this implication reflected over business leaders to reassess the market situation and business strategies to deal with the dynamic situation and set a crisis plans. They strived to ensure the financial reflection and implications over their business were sustainable enough to absorb their additional costs or missed opportunities. Other industries have an emerged opportunity and must promptly change their work model as to capture new opportunities. Those, changes applied to the work models in line with prioritized health and safety importance were reflected in a new remote working culture. A lot of new programs and communication platforms came up and quickly spread.
Remote work is the key driver for the business process industry. Applying some sort of social distancing and the remote working may considered a new integral part of the new normal.
Why Businesses do Outsource their Processes?
Non-core activities need to be as lean and efficient as possible, so increasingly companies, both large and small, are turning to outsourcing as a way to improve performance, manage costs and provide a high level of flexibility in resourcing and skills.
For businesses looking at promising opportunities in overseas markets, outsourcing is a low risk method to grow. Using a provider with knowledge of the local market and a diary in helping organizations found out operations reduces the danger of non-compliance with local regulations.
It also keeps financial exposure to a minimum, enabling companies to draw on the specific skills and expertise they need, when they need it.
Also, businesses seek to have competitive advantages accordingly may option to do BPO specially to developed countries having skillful human resources.
⦁ FOCUS ON CORE BUSINESS
With finite resources, you need to ensure that your staff are prioritizing activities that will make the greatest difference to the business.
⦁ FLEXIBILITY IN RESOURCING AND SKILLS
Your business can be unpredictable; you may need additional resource or specific skills on a project by project basis, or for a short- or long-term contract.
⦁ INCREASED EFFICIENCY
Business want to standardize processes in non-core areas to enhance productivity and increase profits.
⦁ SERVICE QUALITY
Consistent levels of service quality and delivery at home and overseas are important. Companies that do outsource processes are opting to let specialists handle those tasks, thus saving time, improving accuracy, and increasing their capacity.
5. RISK REDUCTION
Business want peace of mind that penalties will not be incurred for non-compliance with filing deadlines or changes in regulation.
6. CONTROL OF CAPITAL COSTS
Cost-cutting may not be the sole reason to outsource, but it is certainly an important factor. Outsourcing converts fixed costs into variable costs.
⦁ COST OPTIMIZATION
Outsourcing cuts down costs for in-house labor, mainly for staffing and training, and for the workspace to accommodate local employees. An outsourcing company physically located in a developing country like Egypt leverages lower-cost labor markets for skillful personnel with effective and efficient resources.
⦁ CONTINUITY OF SERVICE
The absence or departure of a member of staff may cause an issue. Outsourcing to an external supplier guarantees continuity of service.
⦁ EXPANSION AND GLOBAL PRESENCE
Outsourcing can serve customers in multiple languages, around the clock, thus relieving the local company of the burden. Outsourcing Service providers can leverage their presence in multiple countries and keep the local company’s divisions to a minimum. Outsourcing get it easier to expand and to invade different markets.
⦁ DELIVER PROFESSIONALISM
Systems and processes may have been implemented in an ad hoc way as the business has grown and are no longer fit for purpose. An external supplier offers a professional and accountable service tailored to the specific needs of the business.
⦁ OPERATIONAL BEST PRACTICE
Business need access to operational best practice that would be too difficult or time consuming to develop in-house. Outsourcing will give access to experts having exposure to different practices, accordingly, enhancement to operational process into the best practices is highly expected to apply.
⦁ ACCESS TO EXPERT ADVICE
Business want to be able to call upon advisers who understand your business for ad-hoc business and professional advice.