The advantages and potential disadvantages of BPO and BPO partners

Regardless of the size of your businesses, there can be huge advantages of engaging a Business Process Outsourcing (BPO) partner.

But to access these benefits, you’ll need to pick the right BPO partner. Otherwise, you can run into some serious disadvantages.

What are the advantages and potential disadvantages of working with a BPO partner?

It’s important to stress that the disadvantages can be overcome by finding a BPO partner that is a fit for your business model and makes your goals their own.

Below, we dig into each of the advantages and disadvantages in detail.

When you pick the right BPO partner for your business, you can unlock some serious business benefits. Below, we explore seven of the most important ones.

Reduced business costs

When you take on a BPO partner, you are hiring them as a service provider.

As such, you can pass parts of your business operations onto that provider (for example, the cost of expensive IT equipment or hiring more employees). This can reduce or even eliminate certain overhead costs.

Cost-reduction has typically been seen as the primary—if not only—benefit of working with a BPO partner. Consequently, providers have often been chosen purely on price. But in recent years, businesses have been working with BPO partners in much smarter and more strategic ways.

Click here to see how this relationship is evolving.

Improved efficiency

BPO partners are often experienced in select areas of service delivery and focus their efforts in mastering them (e.g. CX programs, global expansion).

By working with a BPO partner, you will benefit from their well-oiled processes, best practices, and the hard lessons they have learned along the way. The result? Higher efficiency and greater productivity.

Want to see this in action? Check out our article on how BPOs can manage more than just call centers?

Better use of resources

When businesses use BPO partners, they can transfer responsibility of non-core business functions to another business who excels in them.

A business that engages BPO services then has more resources (time, financial, and staff) to focus on their core business operations and strategic planning.

It should be noted that some businesses take this to the next level by working with a BPO partner that also offers strategic operations planning.

Global expansion

By choosing the right BPO partner, businesses gain better local market knowledge of geographies they wish to expand into.

In addition to this insight, some BPO partners also give businesses the ability to serve customers in new regions through access to personnel in different time zones, and increased language coverage.

Improved scaling

If you’re looking to scale your business or launch new products, an outsourcing partner helps you increase headcount more easily, which can reduce time to market and increase the rate of transformation.

By working with an outsourcer with a bespoke approach you can also ensure your specific needs are covered and your primary goals are outlined.

Increased business agility

The right outsourcing partner also helps your business adapt more easily to changing market conditions, customer expectations, and business requirements. This increased resilience is particularly crucial during times of disruption or market volatility.

But the biggest winners work with a BPO partner with a relationship-based approach to ensure changes made are lasting rather than reactionary. That’s the key to improved business agility in the long term.

Ongoing access to the best technology

Working with BPO partners helps a business to do more than simply reduce the cost for access to technology they would normally acquire.

They can advise on the best technology for the job, cover ongoing maintenance costs, have staff who have expert training in using technology, and have the market knowledge to upgrade it in line with market trends within the industry.

For all the good that comes from working with the right BPO partner, picking the wrong one can see things turn sour pretty quickly. Below, we explore five of the biggest potential issues you might encounter.

Potential loss of control

Working with a BPO partner involves a transferral of responsibility. Whenever that happens in business, there is a risk that it will not work.

This is often a symptom of a poorly matched BPO partner-to-client relationship, a lack of a unified goal setting or clear KPIs, or a lack of trust.

It’s important to establish a clear vision of what success looks like, transparency on how it will be measured, and defined processes for what should happen if targets are missed.

This is especially important if you’re using a BPO for a business process transformation initiative. Click to jump to our page on that topic now.

Communication problems

Developing strong and transparent lines of communication between you and your BPO provider is vital to keep things on track, correct any errors, and stop things from spiraling out of control.

This is why it can be extremely beneficial to work with an outsourcing partner that offers you a dedicated Solutions Manager.

Businesses want to know that they can reach out to someone with questions and issues and that this person knows them, their business challenges, and their customers. But the biggest winners also want to know there is a team proactively working on ways to improve the service they offer and highlight new opportunities.

Negative impact on CX

Working with a BPO provider can negatively impact your customer experience (CX) if you aren’t careful how you select a partner.

For example, if your BPO partner approaches customer service and support, with a transactional mindset, it’s likely that your customers will start to feel undervalued.

At a time when 86% of consumers say customer experience is as important as products and services, according to research by Salesforce, this a major misstep.

To avoid this happening, seek out a BPO partner who takes a relationship-based approach to outsourcing, and even better, one who works with a CX-first mindset

Culture clash

A poor BPO match will often result in a clash of cultures that causes operational headaches and decreased time to market due to a lack of alignment.

If both companies adhere to different service standards, it also opens the door to compliance or regulatory issues. On top of that, friction between teams can cause retention issues.

Lack of ROI

CX is a critical business concern. So working with a BPO that doesn’t prioritize CX can make it difficult to get ROI from outsourcing spend.

How big a problem is this? According to Gartner, two-thirds of companies compete on customer experience, up from 36% in 2010.

We’ve worked in this space long enough to know that successful business process outsourcing is founded on a CX-first approach, a bespoke solution, and a strategic partnership built on trust.

Whether you’ve worked with a BPO provider in the past or not, a huge amount of trust is needed to transfer responsibility of any of your business processes to a third-party. That’s especially true when those processes are customer-facing.

Here’s how we help mitigate the risk:

1. Potential loss of control

We don’t think a one-size-fits-all approach to BPO partnering works. So when we partner with you, we craft a unique strategy, service design, and KPIs to solve your business challenges.

This gives us the space to set a unified goal, and operational structures to ensure that we keep things on track. We then stay on track by creating transparency into all processes and performance tracking day in and day out.

2. Communication problems

We give you a dedicated Solutions Manager because we hate missteps. Our program management includes proactively resolving issues and surfacing new opportunities. We’re thorough to a fault.

3. Negative impact on CX

We believe that the key to fueling growth is driving superior customer experiences that increase loyalty. We place a big emphasis on designing impactful CX programs and empowering our agents to be agile all-stars, not sticklers for the script.

Want to see how we deliver on this? Read this case study with one of our eCommerce clients whom we helped hit 91.4% customer satisfaction and 64% faster than average chat response time.

4. Lack of ROI

We believe that the key to fueling growth is driving superior customer experiences that increase loyalty. We place a big emphasis on designing impactful CX programs and empowering our agents to be agile all-stars, not sticklers for the script.

Want to see how we deliver on this? Read this case study with one of our eCommerce clients whom we helped hit 91.4% customer satisfactioWe practice what we preach when it comes to “Return on Outsourcing” (In fact we wrote a whole eBook on it).

We’re not about reducing overheads quickly to the long-term detriment to your customers or business. It’s why we develop programs that maximize your CX and create value in the short, mid, and long term.

It’s this approach that allowed a high-flying fintech client of ours to increase CSAT by 5% and hit an 85% first contact resolution rate within just four months. You can read the case study here.

Our agile methods allow for ongoing optimization which results in a meaningful return on your outsourcing investment, so you can reduce risk and scale your business without fear.n and 64% faster than average chat response time.