Business process outsourcing (BPO) has come a long way since its inception in the 1990s. Initially, it was seen as a cost-cutting measure by companies looking to reduce their operational expenses. However, over the years, BPO has evolved into a value-adding service that helps companies improve their business processes and achieve their strategic goals. In this blog post, we will take a look at the evolution of BPO services from cost-cutting to value-adding.
Cost-cutting Phase
In the early days of BPO, companies primarily outsourced non-core business functions to low-cost destinations like India and the Philippines. These functions included back-office operations such as data entry, payroll processing, and customer support. The primary motivation behind outsourcing was to reduce costs and improve efficiency. By outsourcing non-core functions, companies could focus on their core competencies and strategic goals. This cost-cutting phase of BPO lasted for almost a decade, from the late 1990s to the early 2000s.
Value-adding Phase
As BPO matured and companies became more comfortable with outsourcing, they began to explore the value-add that outsourcing could offer. Companies realised that BPO providers had deep domain expertise and specialised skills that could help them improve their business processes and drive innovation. BPO providers began offering services such as process improvement, analytics, and automation, which helped companies achieve their strategic goals.
For example, a BPO provider might help a healthcare provider improve their claims processing by leveraging analytics to identify areas for improvement. Or a BPO provider might help a retail company automate their supply chain to reduce costs and improve efficiency. These value-added services helped BPO providers differentiate themselves from competitors and become strategic partners to their clients.
Today, BPO providers offer a wide range of services that go beyond cost-cutting and efficiency. They help their clients improve their business processes, drive innovation, and achieve their strategic goals. Let’s take a look at some of the services that BPO providers offer today.
Services Offered by BPO Providers Today
Process Improvement: BPO providers use process improvement methodologies such as Lean Six Sigma to help their clients streamline their business processes and reduce waste. By identifying and eliminating bottlenecks, BPO providers help their clients improve efficiency and reduce costs.
Analytics: BPO providers use analytics to help their clients make data-driven decisions. By analysing data, BPO providers can identify areas for improvement and help their clients optimise their business processes.
Automation: BPO providers use automation to help their clients reduce manual work and improve efficiency. By automating repetitive tasks, BPO providers help their clients save time and reduce costs.
Customer Experience: BPO providers help their clients improve their customer experience by providing high-quality customer support. By leveraging technology and specialised skills, BPO providers can provide multichannel customer support that is both efficient and effective.
Innovation: BPO providers help their clients drive innovation by providing specialised skills and domain expertise. By working closely with their clients, BPO providers can identify opportunities for innovation and help their clients develop new products and services.
The evolution of BPO services from cost-cutting to value-adding has been driven by the changing needs of companies. As companies have become more comfortable with outsourcing, they have begun to explore the value-add that outsourcing can offer. BPO providers have responded by offering a wide range of services that go beyond cost-cutting and efficiency. Today, BPO providers help their clients improve their business processes, drive innovation, and achieve their strategic goals. As the business landscape continues to evolve, BPO providers will play an increasingly important role in helping companies stay competitive and achieve their goals.
