Is Business Process Outsourcing Relevant For Your Small Business?

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9/19/2016
Is Business Process Outsourcing Relevant For Your Small
Business?
process.st/business-process-outsourcing/
Benjamin Brandall
September 19, 2016
What is Business Process Outsourcing (BPO)?
Yes, business process outsourcing is something that Coca-Cola does and spends millions on and someth ing
Vodafone uses IBM for to build its customer-related IT requirements, but it’s also for any one and everyone.
It doesn’t have to be done on a massive enterprise scale, and in fact it can be even more impactful for small
businesses because it means the difference between hiring a full-time legal team and using an as-and-when needed
one from another company. That’s a massive difference in cost.
When you use an agency, or hire an accounting firm, that’s business process outsourcing. While the term has been
taken over by enterprises and maybe shifted to mean something different, at its he art, every business does it. Every
business without a full time accountant, legal team, marketing team, designer, IT guy, etc, does it.
It’s enterprise-y because it started out at those levels. Coca-Cola was a pioneer:
“ BPO is […] a subset of outsourcing that involves the contracting of the operations a nd
responsibilities of a specific business process to a third-party service provider. Originally, outsourcing
was associated with manufacturing firms, such as Coca-Cola, that outsourced large segments of its
supply chain” — Forbes
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But no matter what size company you are, there are considerations…
Is BPO right for your company?
While BPO is commonly associated with enterprises looking to cut down on the costs of hiring local labor, you can
also look at it from the perspective that businesses of all sizes are making use of companies to do their accounting
and legal functions.
Just like how for enterprises there can be considerable costs cut when outsourc ing on a massive scale, for SMBs it
means simply not having to hire dedicated accountants, pay for accounting softw are, and suchlike.
There are considerable pros to BPO, but it’s not without its disadvantages, says Techtarget:
PROS:
Speed and efficiencies of outsourced business processes are enhanced
Organizations using BPO get access to the latest technology
Freedom and flexibility to choose the most relevant services for the company’s operations
Quick and accurate reporting
Save on resources related to staffing and training
CONS:
Data privacy breaches
Underestimating running costs of services
Overdependence on service providers
Communication issues that delay project completion
What are some common processes that can be outsour ced?
Whether it’s on an enterprise scale and you’ll be handing the process over to a la rge department, or you’re just an
SMB working with a single agency, there are a lot of different processes you can consider outsourcing.
Back office:
Recruitment
Payroll
Data entry
Data management
Quality assurance
Accounting
Front office:
Telemarketing
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Customer service/support
Technical support/help desk
Appointment scheduling
Inbound/outbound sales
Market research
The new wave of BPO: Productized Services
In the same way that SaaS has replaced the need for bloated digital architecture in businesses, it’s also starting to
disrupt BPO in the traditional sense.
A productized service is a mixture of software and an outsourced staff member, both paid on a monthly basis.
Productized service for bookkeeping: Bench
A good example of a productized service is Bench, which pr ovides both accounting software and an accountant as
part of the package to do your books for anywhere between $125 and $350 per mo nth — certainly far less than
you’d pay for a full-time accountant.
Productized service for A/B testing: Draft
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