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How Business Process Outsourcing Firms can Improve Productivity and Reduce Costs

Looking for a way to reduce business costs while improving workplace productivity and gaining access to specialist business experts? Using one of the leading business process outsourcing firms could be your perfect solution.

What are business process outsourcing firms?

Business process outsourcing (BPO) firms are external service providers that companies can contract specific professional processes to. Most of the time, they take over supplementary business functions, such as simple data entry tasks or more comprehensive HR services, so the company can focus on its core business process.

Just like MSP staffing providers, BPO firms are made up of experts who specialize in various business tasks. By outsourcing simple tasks and departments to BPO companies, you can complete projects more efficiently and cost-effectively than keeping them inhouse, all while having work done by specialists with the latest technology.

Examples of business process outsourcing

Some of the most common services BPO firms handle include:

  • Accounting
  • Payroll
  • Data entry
  • Quality assurance
  • Telemarketing
  • Customer support
  • Social media marketing
  • Market analysis and research
  • Technical support
  • Inbound and outbound sales
  • Appointment scheduling

Here’s an example of how business process outsourcing works in the real world. Payroll is one function that’s often outsourced, and it’s also a task that every business needs to handle.

Instead of dedicating a large chunk of the budget to staff and operate a payroll team, a company can outsource the department to a firm that specializes in managing payroll. This allows the company to focus on its core business process, while also taking advantage of the BPO firm’s expertise and technology.

Benefits of using business process outsourcing firms

Companies of all sizes, from brand new startups to Fortune 500 giants, take advantage of the services BPO firms offer. While one of the primary benefits to outsourcing work to a BPO abroad is lower corporate income tax payments, there are plenty of additional benefits.

More cost-effective

Outsourcing services reduces inhouse labor costs, especially those involved staffing and training, and work space expenses. BPO firms also allow companies to save money by offering fee-for-service plans, instead of the fixed-cost models associated with local employees.

Improve focus

Handing off non-core parts of the business to a BPO firm allows the company to concentrate on key functions. Instead of monitoring the efficiency of the telemarketing team or the accuracy of the accounts department, the company can focus on maximizing its growth.

Better results

BPO firms have the latest technology needed to achieve the best results. For example, a company that focuses on app development might not want to pay for the most sophisticated payroll software. By outsourcing payroll to an external provider, they get the benefit of modern tech without the price tag.

Expansion opportunities

Some business process outsourcing firms can support customers around the clock in multiple languages, a major advantage few companies can offer inhouse. This helps companies be more global and expand their operations.

Boost flexibility

By outsourcing non-core services, companies can act more efficiently and quickly to changes in the market when managing the risks that come with new services or products. BPO firms also allow them to reassign internal resources to more critical functions for greater efficiency and productivity.

Enhance speed and efficiency

When specialist BPO firms take over dedicated tasks, they’re able to complete them in less time than inhouse teams, while also improving accuracy and increasing capacity. For example, an external firm that specializes in record management will automatically index paperwork, making documents easy to retrieve when needed, while also staying legally compliant.

Disadvantages of using business process outsourcing firms

While there are many benefits of using business process outsourcing companies, there’s always some level of risk when hiring external vendors to perform business processes. Here’s a few of the cons you need to consider.


When using a business process outsourcing firm, maintaining security is always more difficult compared to keeping services inhouse. Vulnerability disclosures and potential data privacy breaches are threats you need to be aware of.

Hidden costs

Although outsourcing services is usually more cost-effective than keeping them inhouse, it’s important you thoroughly understand the BPO firm’s pricing model. Running costs, ongoing maintenance, upgrades, currency fluctuations and internal transitions all need to be financially accounted for.

Communication problems

Business process outsourcing firms are often located in different countries and because of this, language barriers can be limiting. While most BPO firms employ English-speaking staff, quality can vary and delays in processes and curbs on feedback can suffer as a result.

How to choose the right BPO firm

For many companies, the pros of using a business process outsourcing firm far outweigh the cons. If you’ve come to the same conclusion, this is how to choose the right BPO firm for your company.

1. Set your selection criteria

Decide the factors you’ll take into consideration when evaluating the BPO firms. Some ideas include:

  • Area of expertise
  • List of services
  • Number of employees
  • Number of major clients
  • Rates
  • Reviews

2. Choose 3-5 firms

Research BPO firms online and shortlist 3-5 that meet your evaluation criteria.

3. Assign test projects

Designate a pilot project to each of the BPO providers. This will help you determine the provider’s ability to handle the type of tasks you’ll be assigning if you hire them.

4. Evaluate your results

Rank the BPO firms based on the quality of their work. Take into account the quality of output, turnaround time and adaptability to sudden project changes.

BPO firms can help you get ahead

Leveraging business process outsourcing firms can greatly improve your business results, allowing you to get and stay ahead of your competition. By outsourcing supplementary tasks to an external firm that specializes in said tasks, you’re freeing yourself up to focus on essential business aspects while also benefiting from expert knowledge you can’t get anywhere else.

While it’s important to acknowledge that there are some downsides to BPO firms, they shouldn’t be deal breakers. If you choose to outsource some simple tasks to a third-party firm and don’t get the results you were anticipating, you’re not stuck with your decision. You can move to a different BPO provider or set the department up inhouse.

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