What are BPO Services?

Business Process Outsourcing (BPO) is the process of hiring another company to handle business activities for you. It is a subset of outsourcing that involves the operations and responsibilities of specific businesses processes to another service provider. BPO that is contracted based in another country is called Offshore Outsourcing, and BPO on nearby country is called Nearshore Outsourcing. BPO is also categorized as IT-enabled services. Some sub-segments of business process outsourcing industry are KPO (Knowledge Process Outsourcing) and LPO (Legal Process Outsourcing).

BPO is a type of outsourcing that focuses on hiring a third-party service provider to do IT-related operations, typically categorized into back office outsourcing – such as application management and development, data center operations, and also includes internal business functions like human resources, accounting and finance, and customer related services.

In the beginning, Business Process Outsourcing generally consisted of outsourcing processes like payroll, and then it grew to include employee management. Now it covers more functions that are considered ‘non-core businesses’ to the primary business strategy. Now it is common for organizations to outsource financial and administration processes, human resources, call center and customer service activities, accounting and payroll.

BPO is also frequently referred to as ITES (Information Technology-Enabled Services). Since mostly it includes business processes on some form of automation, which performed services are enabled by IT. The derivative of BPO is KPO (Knowledge Process Outsourcing), which is considered by some to be a subset of BPO, KPO includes those activities that require greater skill, knowledge, education and expertise to handle. For example, whereas an insurance company might outsource data entry of its claims forms as part of a BPO initiative, it may also choose to use a KPO service provider to evaluate new insurance applications based on a set of criteria or business rules; this work would require the efforts of a more knowledgeable set of workers than the data entry would. The current definition of KPO encompasses R&D, product development and legal e-discovery, as well as a number of other business functions.

Also coming into use is the term BTO (Business Transformation Outsourcing). This refers to the idea of having service providers contribute to the effort of transforming a business into a leaner, more dynamic, agile and flexible operation.

Philippines: The Best Place to Outsource Your Business

Business Process Outsourcing (BPO) growth in the Philippines is extremely fast due to the demand of offshore call center in the country. Many companies are outsourcing to the Philippines because dealing with Filipinos are really great. With English as their second language, they have excellent speaking abilities and considered the best customer service representative, making it easier for Filipinos to compete with global standards.

High Literacy Rate

Filipino considered English as their secondary language, and even a widely spoken language in the country, especially to the people who live in the cities. Along with the help of mass media, English are becoming widely spoken by Filipinos.

Extremely Hardworking

Filipinos are known as a hardworking people in Asia, they like it more if you can offer them more jobs as long as you give them the benefits they deserve. Filipinos can work nightshifts and even extra hours. They don’t leave their tasks undone unlike other workers when they hear the bell rung they just leave the work immediately.

Multi-talented

Filipinos are used to work in different tasks, multi-tasking is nothing new to them, and in fact they are able to work in a fast changing environment even with less supervision – thus save a lot of man-power requirements, money and time. Filipinos are talented people, they are known for their talents even on other country.

Can easily adapt

Filipinos can easily adapt to the changes and making its name on the business industry especially in BPO. There is no doubt that they can extremely learn fast and can be easily trained. The country has a high level of education, which makes Filipinos capable on outsourcing jobs.

Up-to-date

Filipinos are up-to-date with the newest technology and to the latest BPO trends. Filipinos like the exposure they can get in outsourcing, and mostly like to have professional experience from multinational companies. This makes Filipinos challenged and able to compete with other professionals there is.

Educational System

Philippine education is based on American educational system, being under the American regime made it easy for Filipinos get used to American culture. Filipinos are introduced to western concepts making it easier for them to understand, this is essential characteristic can help your business work on the same track with success.

Outsourcing in the Philippines is a smart move for businesses looking for an advance improvement on their business. The Philippines consists of over 7,000 islands and the Filipinos’ Primary Language is quickly evolving from Filipino to English. Unlike other country India and China, the accents of Filipinos are much more rounded due to their previous Spanish occupation and can sometimes be mistaken for Latin-American.

How to Start an Outsourcing Business

In an economic recession and decreasing demand for products and services in the market, outsourcing might be the best solution to resolve businesses problems in a cost-effective way. More and more companies in developed countries are increasingly outsourcing services to companies in developing countries, with services including manufacturing, design and even customer service. Outsourcing can let companies focus on their core businesses and shift to more strategic tasks like building customer relationships, a successful setup if done effectively.

The call center industry is growing and there are more and more companies or corporations outsourcing their business. You may be able to start a small business to fulfill a need for a larger business that is looking to outsource in a particular place. In a recession, large companies are looking to cut costs in every area of their business. Large companies also outsource to small businesses around the corner, and your business could be that one small business. All you have to do is provide a product or service to larger companies that you can provide more cheaply, with high quality.

Here are some ideas as to how you can start your own outsourcing services business:

1. Start with a business plan to set your goals, and reason why you believe these goals are attainable and the plan or action steps for reaching the goal. Know your business objective of outsourcing – Is it to reduce cost, generate more revenue or gain a competitive advantage?

2. Determine the services you will be providing and the target market, and which services to specialize in. Having a call center would attract large companies who wish to outsource some of their services, whether it is for consultancy purposes, customer service, data entry services, telesales, software development or technical support. The most outsourced service by far is manufacturing, because it is a labor-intensive activity that can be performed cheaply by low-wage workers. Developing countries often do not possess sufficient resources to produce capital-intensive services such as engineering design in an economically efficient manner.

3. Get to know the possible markets you can cater to – the general public or the individual clients, small commercial businesses, large corporation. Make contacts with local manufacturers or other service providers, and get estimates of their production costs. This should provide you with the basis for negotiating the price of outsourced services.

4. Determine your business location, it could be home-based or at a commercial location, depending of course on the size of your business and your target market.

5. Identify and contact several outsourcing providers. Negotiate with any or all of them so that you can find the vendor who can perfectly match your requirements. Make contacts with local manufacturers or other service providers, and get estimates of their production costs. This should provide you with the basis for negotiating the price of outsourced services.

Broker deals between companies in your home country and service providers in the countries where you maintain representative offices. Your company's income can be stated as a flat fee or a percentage of the value of the deals that it brokers.

Outsourcing is continuing to grow as small companies and larger companies continue to grow themselves. Their need for back office help - business process outsourcing - means that there will be greater need for an outsourcing company to provide them services. Be that company. Start your own business that could cater to not only one aspect, but make it multifaceted. Offer your future clients a one stop outsourcing services shop. Then, keep your company competitive by taking online courses in business policy and management. Having a call center would attract large companies who wish to outsource some of their services, whether it is for consultancy purposes, customer service, data entry services, telesales, software development or technical support.