In this article, we\u2019ll define BPO, discuss BPO meaning, and cover how to outsource business processes day-to-day.<\/p>\n
What is BPO?<\/h2>\n
BPO is the process of delivering a business function through an external provider or contractor.<\/p>\n
BPO often includes services like payroll, accounting, telemarketing, data recording, social media marketing, customer support, and more.<\/p>\n
It\u2019s most typically used to support supplementary business functions that don\u2019t directly impact a business\u2019s core output.<\/p>\n
There are many reasons companies choose BPO over increasing internal resources to handle these tasks.<\/p>\n
70%<\/a> of executives cite lower cost as the number one reason they choose BPO, 40% say flexibility, 20% speed-to-market, 15% access to BPM tools<\/a> and processes, and 15% agility.<\/p>\n If you do choose BPO over increasing internal resources to accomplish a task, there are 3 different categories to choose from:<\/p>\n Business teams can use monday.com\u2019s Work Operating System (Work OS) to build a custom solution that suits their needs for any BPO provider.<\/p>\n Build a solid foundation using templates like our freelancer manager<\/a>, ideal for managing multiple people in different time zones and at different rates.<\/p>\n Get started with monday.com<\/a><\/p>\n If your business operates in the United States (US), whether or not you choose to work with a BPO partner often comes down to taxes.<\/p>\n The US\u2019s corporate income tax is one of the highest in the world at 21%<\/a>, which leads many to determine that working with a company to outsource operations in countries with lower tax rates is financially beneficial.<\/p><\/blockquote>\n If you choose to outsource a business function outside of your home country, you pay the tax rate<\/a> of the country where your vendor or contractor resides.<\/p>\n Aside from taxes, there are several reasons you may or may not want to work with a third-party service provider, including:<\/p>\n There are many benefits to BPO, but there\u2019s also one major risk to take into account \u2014 when you outsource a business function, you give up some visibility and control over the processes, meaning a portion of your customer experience is no longer guaranteed to run the way you might expect.<\/p>\n Don\u2019t outsource critical functions that make or break your customer experience, because it could hurt your business.<\/p>\n BPO looks different depending on where you sit in your organization. We\u2019ll walk through the most common types of BPO, and how to manage them.<\/p>\n ITES includes anything related to information technology (IT), internet connectivity, or your data network. It might include vendors that handle tasks like service desk analysis, production support, or the entire umbrella of IT operations.<\/p>\n Managing an outsourced IT function will include the ability to track and manage requests, security concerns, and the urgency of each, as well as facilitating smooth communication between your internal team and the vendor.<\/p>\n Business teams can use monday.com to build a custom IT operations help desk<\/a>, which allows you to assign task owners, mark priority, add task descriptions, and much more.<\/p>\n KPO covers a lot \u2014 it\u2019s an umbrella term that describes any type of BPO that\u2019s more than just process management<\/a>, but also includes business and domain-based expertise.<\/p>\n This includes things like research and analysis, and vendors engaged in this type of work might be enabled to make low-level business decisions. KPO firms often hire people who are competent in a specific field.<\/p>\n To manage KPO vendors, you\u2019ll need a reliable way to incorporate them into your internal processes and teams.<\/p>\n monday.com\u2019s process management template<\/a> allows you to plan processes in multiple phases, assign priorities and owners, and track progress based on timelines.<\/p>\n RPO is a subset of KPO, which specifically relies on research and analysis. These vendors support strategic business decisions, investment choices, and may also include marketing firms.<\/p>\n Some of this market research likely includes competitive analysis<\/a> and the need to monitor competitor activities. Using monday.com\u2019s competitor analysis template<\/a>, RPO firms can track and communicate their findings seamlessly with internal teams.<\/p>\n Get started<\/a><\/p>\n Another subset of KPO, LPO includes a wide range of legal services. It encompasses tasks from higher-level legal work all the way down to transcription.<\/p>\n LPO vendors might draft patent applications, draft and review contracts, perform legal research, provide legal advice, and much more.<\/p>\n monday.com\u2019s due diligence template is just one example of how internal teams can work with outsourced legal vendors. The example below illustrates how internal teams could manage due diligence questionnaires, assign them to vendors, and track progress as they go.<\/p>\n Although business travel has slowed down in the past year or so, it’s common for businesses to outsource their travel operations and logistics.<\/p>\n This includes hiring a BPO company to manage hotel reservations, vehicle bookings, flights, and front or back-end processes. This helps businesses cut costs while also helping to improve employee satisfaction internally.<\/p>\n One way to manage outsourced travel operations could be with monday.com\u2019s vendor list<\/a>. Travel vendors might use this board to track and manage hotels and airlines through which they frequently book travel, all while providing visibility to your company\u2019s internal team.<\/p>\n When it comes to BPO, there are often a lot of questions about whether or not it\u2019s a good strategy, how much it costs, and how and when it can be used.<\/p>\n Let\u2019s look at a few common questions.<\/p>\n One of the most common functions that businesses outsource is their call centers<\/a>. Call centers handle inbound and outbound calls related to customer service complaints or questions from prospective customers.<\/p>\n Call center BPO is the process of outsourcing these inbound and outbound customer calls. If your business relies heavily on telemarketing, an outsourced call center can also help handle these calls in support of your core business team. Also, call center outsourcing has many benefits, but it might not be the best fit for every business. It all depends on the needs and scale of your company. You may also want to consider\u00a0setting up your own virtual call center<\/a>.<\/p>\n Outsourcing business operations can be beneficial by allowing businesses to cut costs and to ensure that their internal teams are focused on core business functions.<\/p>\n BPO also ensures non-core business functions are handled by specialists, allows companies to expand globally by offering support in local languages and time zones, and provides internal business teams with more flexibility.<\/p>\n Yes, one of the potential benefits of BPO is the potential for lower costs relative to in-house labor, recruitment costs, and training, plus the need for a larger physical workspace.<\/p>\n Plus, hiring vendors in countries with lower corporate income tax requirements allows businesses to save when it comes to that expense, and hire vendors on a service-based plan as opposed to a fixed-price salary.<\/p>\n Outsourced business processes can be great, as long as you keep a close eye on them. The risks associated with BPO lie in the resulting lack of control that can often come with working with outsourced vendors.<\/p>\n That\u2019s why it\u2019s important that your BPO vendors are integrated with internal operations, and that BPO processes are managed in a way that provides internal business teams with high amounts of visibility into the vendor\u2019s operations.<\/p>\n The monday.com Work OS allows you to manage business processes, both outsourced and internal, all in one place.<\/p>\n Why not kick-start a review of your processes today \u2014 with our handy business process management<\/a> template \u2014 and see if outsourcing could add value to your business.<\/p>\n\n
![\"bpo](\"https:\/\/www.monday.com\/blog\/wp-content\/uploads\/2021\/03\/monday.com-freelance-manager.png\" "\\"monday.com")
<\/p>\nWhen should you outsource business processes, and when should you not?<\/h2>\n
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Types of BPO<\/h2>\n
Information technology-enabled services (ITES) BPO<\/h3>\n
![\"bpo](\"https:\/\/www.monday.com\/blog\/wp-content\/uploads\/2021\/03\/monday.com-IT-operations-help-desk.png\" "\\"monday.com")
<\/p>\nKnowledge process outsourcing (KPO)<\/h3>\n
![\"bpo](\"https:\/\/www.monday.com\/blog\/wp-content\/uploads\/2021\/03\/process-management-template.png\" "\\"process")
<\/p>\nResearch process outsourcing (RPO)<\/h3>\n
![\"bpo](\"https:\/\/www.monday.com\/blog\/wp-content\/uploads\/2021\/03\/competitive-analysis-1.png\" "\\"competitive")
<\/p>\nLegal process outsourcing (LPO)<\/h3>\n
![\"bpo](\"https:\/\/www.monday.com\/blog\/wp-content\/uploads\/2021\/03\/due-diligence-template.png\" "\\"due")
<\/p>\nTravel operations<\/h3>\n
![\"bpo](\"https:\/\/www.monday.com\/blog\/wp-content\/uploads\/2021\/03\/monday.com-vendor-list.png\" "\\"monday.com")
<\/p>\nBPO frequently asked questions (FAQ)<\/h2>\n
What is a BPO call center?<\/h3>\n
Why choose BPO?<\/h3>\n
Can BPO reduce your costs?<\/h3>\n
Manage your outsourced business processes with the right solution<\/h2>\n