What is Business Process Outsourcing?
Business process outsourcing (BPO) is the external contracting of services such as data management, accounting and creative design with a service provider. In contrast, manufacturing outsourcing involves businesses arranging for production of goods through a contract manufacturer.
This straightforward distinction can be more important than it might seem at first glance — while only companies engaged in producing goods will periodically use manufacturing outsourcing, all organizations in the private, public and government sectors can benefit from outsourcing various services to an external provider. For example, businesses of all sizes have functions like payroll and human resources that often require expert help from outside the organization.
Outsourcing is becoming more common as companies strive for efficiency and outsourcing allows for a fluid workforce that can be sized to accommodate more or less work volume. In 2014, U.S. manufacturing outsourced 53% of their work while IT services outsourced 43%, R&D was outsourced 38% of the time, Distribution 26% and Call or help centers 12%. This does not mean that all of those jobs went overseas. Some outsourcing occurs as larger companies hire smaller more specialized companies to perform portions of specific tasks.
However, the top 3 outsourcing destinations are in the far East with India being the largest followed surprisingly by Indonesia and then China.
However, there is some push-back as some companies have had trouble with off-shore outsourcing and have moved their outsourcing back on-shore.
Top Outsourcing Companies by Revenue (Not Outsourcing Volume)
There are quite a few cities in the U.S. that specialize in Outsourcing as well.
The most appealing U.S. cities for outsourcing (depending on what process you are outsourcing of course) are:
- Allentown, PA
- Atlanta, GA
- Grand Rapids, MI
- Green Bay, WI
- Jacksonville, FL
- Lansing, MI
- Longmont, CO
- Richmond, VA
- Syracuse, NY
- Tampa, FL
Top Reasons for Outsourcing
There are a variety of reasons a company might choose to outsource but here are a few of them.
- Access to Specialized Talent
- Increasing Organizational Capacity
- Staffing Flexibility
- Improving Performance
- Cost Reduction
- Leveraging New Technology
- Growing Revenue
- Accessing Leading Practices
- Customer Focus
- Competitive Advantage
10 Examples of Business Process Outsourcing Services
As illustrated in Infographics on US Outsourcing Industry, the use of business process outsourcing can take many different forms such as research and development, IT services and benefits administration. Global outsourcing companies like Back Office Pro typically offer a diverse collection of specialized BPO services in categories such as the following 10 examples:
- Transcription Services
- Research and Analytics
- Animation Services
- Image Editing
- Audio and Video
- Creative Design
- Engineering Services
- Data Management
- Forms Processing
- Retail Space Planning
Customized Uses of BPO Services
When using an expert provider of business process outsourcing services like Back Office Pro, it is equally feasible to obtain customized help in performing highly specialized tasks such as these:
- Adding Video Captions and Subtitling
- Creating and Redesigning Signboards
- Editing Multiple Real Estate Videos and Producing One Professional Video
- Creating Radius Maps
- GoPro Video Editing
- Developing 2D Floor Plans from Hand-Drawn Sketches
- Converting Hard Copy Books for Digital Publishing
One of the most prudent applications of business process outsourcing for any organization is to accomplish an extremely difficult or time-consuming task in a cost-effective fashion without hiring internal staff. Contracting BPO services is also often the most practical solution for handling seasonal and peak workload situations.
Many thanks to BackOffice Pro for the use of their Infographic you can see the full image here.
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