Business process outsourcing (BPO) is a common practice among large enterprises and for good reason. There are numerous advantages to BPO, which involve time, resources and money. Yet, deciding to outsource should not be a decision that is taken lightly and it might be met with pushback within the organization. That is why it is critical to understand both sides of the BPO argument—the pros and the cons. After weighing the good and the bad of BPO, your enterprise can then make an informed decision on what is best for the organization.
Pros of BPO
Outsourcing business processes will provide your enterprise with many benefits, some of which are discussed below.
- Frees up your enterprise, so it can focus on core competencies. When a third party handles business processes, it releases time among employees. With more time available, they can put their attention towards the enterprise’s core competencies.
- Helps in leveraging economies of scale. Leveraging economies of scale provides the enterprise with a competitive advantage. With BPO, your enterprise is able to lower overhead and become more efficient. In essence, your enterprise is able to do more for less.
- Gives access to the best in the industry. Outsourcing to experts who are considered the “best of breed,” gives you direct access to people with knowledge and experience in the industry.
- Controls costs. Having access to a third party that possesses greater competency in the business process equates to lower costs. It also allows your enterprise to better control spending.
- Better cost predictability. When you outsource, you know what to expect in terms of cost. The pricing structure will have been agreed upon in advance, allowing your enterprise to predict the expense of BPO.
- Makes the enterprise more flexible for change. One of the major benefits of BPO that is often overlooked is the flexibility it provides enterprises, which makes it easier to change. Enterprises can also grow and downsize quicker with BPO.
Cons of BPO
As with any major business decision, it is important to also consider the disadvantages of BPO.
- Sometimes disrupts corporate culture. No one wants to lose his or her job due to outsourcing. In some situations, when a third party can better handle the work, it could mean the elimination of jobs within the organization.
- Requires planning. BPO is not a matter of making the decision and then handing things over to a third party. It takes a lot of planning. For example, there should be a point person at the enterprise who will manage the relationship. Careful consideration should also be made when choosing the service provider, which requires a lot of planning and analysis.
- Sometimes there are hidden costs. Watch for hidden costs, such as legal expenses, when moving ahead with BPO. Make sure everything is spelled out in the agreement, so there are no financial surprises.
Outsourcing Telecom Expense Management
Many enterprises are outsourcing telecom expense management (TEM), as a way to free up time and save money. Softeligent is a SaaS TEM solution developed by telecom consultants who have spent decades in the industry. We provide managed and unmanaged services, including a combination of both. That means not only do we provide a software solution, but we will also manage it for you.
For more information, contact us today.