Is BPO the Roadmap to the Next Generation of Business Success?

$260 billion industries shouldn’t go ignored.

But, this is actually quite true in the case of business process outsourcing (BPO). Their “below-the-line” operations, in part, account for this. The future prosperity, resiliency, and continuity of businesses may lie in this $260 billion sleeper industry.

BPOs can do for information-based organizations what cloud kitchens did for the hotel sector—stripped out inefficiencies, boosted profits, and decreased operating complexity.

What Exactly is a BPO?

Business process outsourcing entails permanently outsourcing all company functions, as opposed to the old practice of contracting out non-core processes on an as-needed basis. Almost all corporate functions, including customer service, data analysis, marketing, software development, IT management, and more, may be outsourced thanks to the huge BPO infrastructure of today.

The BPO industry has grown to its current size thanks to the wide range of skills that are available for hire and the always rising demand; by 2028, it is predicted to almost quadruple to $492 billion. 

Decentralization… In a Good Way

Decentralization is a buzzword that has largely lost its appeal because of Bitcoin maximalists. However there is some validity to the term when it comes to BPOs.

BPOs allow for more practical, real-world decentralization as opposed to the frequently over-promised and under-delivered decentralization promised by blockchain. They give businesses the option to disperse their core functions across several regions, which has positive operational, financial, and skill-based effects.

Are BPOs the Future of Business?

In Silicon Valley, the lean startup approach has long been promoted. The lean startup model, which Eric Ries popularized, is described as “an strategy to establishing new firms based on the conviction that entrepreneurs must explore, experiment, test, and iterate as they develop products.”

Companies must come up with creative solutions to maintain growth as we pass through economically unpredictable periods where layoffs are more frequent and hiring slows or, in many cases, freezes entirely. All businesses must have a lean strategy; not just startups.

And here is where BPOs are useful.

In the past, outsourcing has been motivated by the need to reduce costs. Yet, there has been a change with the growth of BPOs; it is now more frequently driven by a desire to create a leaner, more robust, and efficient business. With the help of BPOs of various kinds, it is now possible to create a strong business with just a small number of centralized, executive-level employees.

The Benefits of Working with BPOs

Specialist Skills On Demand

Say you need to create an internal development team. Option A is to choose a chief technology officer (CTO) and hire individuals one at a time in the hopes of luring top talent away from rivals. Option B is also an option. Hire a BPO for software development to provide a ready-made development team with the coding expertise and size you want. Every areas of your business can benefit from this luxury of skills-on-demand.

Reduced Personnel and Overhead Requirements

Office space and employee salaries mount up over time, especially in times of inflation and unstable economic situations. BPOs give businesses the ability to meet operational demands without adding staff or leasing office space, which lowers fixed costs and improves cost controls.

Business Resilience And Continuity

Organizational bloat from prosperous times might become a liability in times of economic hardship. Using the tech sector as an example, nearly 246,000 workers were let go in 2022 and the first part of 2023. By providing support for key processes without the risk of layoffs and downsizing, BPOs help maintain business continuity and resilience in challenging economic times.

The Issues With Depending On BPOs

Placing All Your Trust in a Single BPO

Even while BPOs can offer crucial operational help, it’s crucial that your business’s performance and very survival aren’t dependent on a single source. Make careful to diversify the BPOs you work with and have fallback strategies in place in case a BPO can’t deliver as promised or closes shop.

BPO Performance Management and Evaluation

BPOs have a built-in management structure, but this does not absolve you of responsibility for monitoring. When managing and evaluating BPO teams, a tool for staff monitoring and workforce analytics can be quite helpful. This kind of productivity monitoring software can assist BPO teams with time tracking, evaluating the productivity of BPO agents, measuring efficiency, and more.

Offshoring of Employment

Several BPOs are based abroad, offshoring employment. BPOs don’t necessary need to be based abroad, though. Several American businesses rely on BPOs for additional assistance. Because of this, the BPO business in the United States is booming and is estimated to be worth over $68 billion, or around 27% of the BPO market worldwide. With nearly 657,000 individuals employed by the BPO business in the U.S. as of the time of writing, it is also an industry that generates jobs.

We Believe Strongly in BPOs

We picture a future in which businesses are organized around a minimal management team, with core operations being outsourced. This decentralized method of conducting business has the potential to be more reliable, efficient, effective, and financially feasible.

It’s true that there are some trade-offs, and not every organization should use this strategy. But, this BPO-built business structure contains the secret to establish and expand fast and efficiently for many future founders, entrepreneurs, and leaders.

How do you feel? Can you envision establishing your business largely on the strength of BPOs?