Tue, August 15, 2023
When considering what outsourcing can do for your company, understanding the different BPO models can be helpful.
Since it started to be heavily adopted as a business strategy in the early 1990s, outsourcing has been central to many businesses to help ensure they can reduce costs and maximise productivity. Many associate this business model with financial services, where offshore contact centres became prominent to help provide customer support. However, modern BPO models can offer many different approaches.
There have been many advancements over the years to ensure BPOs can meet the needs of modern businesses. As outsourcing can help address everything from a talent shortage to lowering business costs and even delivering on service innovation, it’s very high in demand. The global market spend on OSS (Outsourcing and Shared Services) is expected to reach $519.3 billion by 2023, up from $409 billion in 2018.
Back office BPO refers to non-customer-facing processes, so this can be anything, including accounting, HR and recruitment, quality assurance, IT solutions, and other functions integral to running a business. Front office BPO includes customer-facing processes, such as customer service, customer experience (CX), technical support, sales, marketing, and other activities directly affecting your customers.
The different types of BPO models businesses can employ will all depend on what area of your business you need support with. For example, if you want to ensure your customer service is supported during peak demand, you’ll want to find a BPO model most suitable for this.
Here is an overview of some of the more popular models:
Seasonal Outsourcing – Many companies may have peaks and troughs throughout the year due to the seasonality of their products and services. An example would be a retail or e-commerce business that may see peaks around the holidays, Halloween, Black Friday, etc. Seasonal outsourcing is a way to get the support your company needs to help ensure a successful outcome at times of peak demand without any drop in service or efficiency. This can be ideal instead of employing seasonal or temporary workers or increasing the workload of your existing teams. It also avoids having to keep on too many employees during periods of lower demand.
Domestic BPO – Outsourcing services doesn’t necessarily mean moving operations or processes out of the country. Instead, a domestic BPO model is one offered in the country your business is in. Whether it’s to cover a particular area or the whole of the country your company is based, domestic outsourcing BPO provides the additional support you need more locally than other models. This can be a less expensive, much cheaper option for companies depending on the mix of channels and services and whether your BPO can call on the sophisticated digital and automation technologies required. It provides support much closer to home that may benefit your customers to achieve CX goals.
Offshoring – Depending on the size of your business and your company’s aspirations, you may have goods and services that attract global customers. You may also want to reduce the costs of having teams based in the UK. Worldwide outsourcing helps to address both by physically having support staff based on different continents. This may be a BPO model you are familiar with, as it has been a popular choice for many companies to help bring down costs but still offer first-class customer support. Many banks, for example, have used worldwide outsourcing to their advantage over the years, helping to provide customer service support that still delivers exceptional CX. It can also help to provide a multilingual support network that ensures all customers are supported when contacting you.
Nearshoring – a nearshoring BPO model works similarly to offshoring but concentrates on moving operations to nearby countries rather than the other side of the world.
Global outsourcing – this BPO model is where companies can look to branch out globally, helping them operate not just in the UK but wherever their customers are. It means that rather than running everything centrally for a globally expanding business, you can have multiple global locations where support is offered to your customers. Examples of this include some of the biggest brands that pop up in cities across the world.
Captive BPO – this BPO model works differently in enabling a business to have its core business functions handled by a third-party company. So, rather than outsourcing to receive support for a period of time or to handle specific non-essential processes, captive BPO is used to outsource to a subsidiary of the business while still retaining control. However, this can be more expensive than other models and can be over and above what most companies seek when needing BPO services.
Internal sourcing - insourcing may be something your business already does as a first action point. Instead of employing a BPO, you make use of the employees you already have and delegate tasks to those with the correct skillset. This can work for some companies, but if you are already researching BPO and looking at the various advantages, it’s probably because insourcing isn’t quite suitable for your needs.
Space leasing/co-working - in this model, businesses don’t outsource any processes but instead rent office space and facilities only when needed for their employees to work, train and carry out their roles. This could be something your company may already do if you have a hybrid or remote working model but occasionally need meeting room space etc.
Staff leasing - in this model, the BPO partner is responsible for recruiting and onboarding staff, managing their well-being, and providing them with a place to work. Their day-to-day activity, however, is managed by the client’s internal staff. While these workers might be employed by a different company and even be based in another location (or at home) they are treated just like internal staff. Leased staff can also be based at the client company’s offices.
Co-sourcing - sometimes, a company doesn’t want to outsource an entire business function but needs help from a partner to do some of it. In these cases co-sourcing is a good option. Co-sourcing involves BPO and client staff working in partnership to accomplish something. This goes beyond client staff managing outsourced staff. Instead, they work together as one team as if they worked for the same company.
Making necessary changes to how your business works can be one of the most challenging periods for a company. Looking at all the possible BPO models, identifying the right one in a crowded market may seem impossible. Before proceeding, businesses need to consider what services are required and which model is the right fit for them. This can only be achieved by looking at your current processes and identifying where priorities currently lie.
Establish your needs – understand which areas of your business could benefit from outsourcing. Whether you are struggling to recruit the talent you need, support your customers with an omnichannel service, or automate back-office processes that are currently time-consuming for your teams, there’s a BPO service that can provide precisely what you need. Prioritise those you are happy to outsource, which will be most cost-effective and beneficial to your business overall.
Discover pain points – if you are not sure where to start, discovering the most pressing matters to focus on can provide direction. Speaking to BPO providers and researching available services can help here. Discuss your current pain points and the challenges your business has now and in the future with your potential partners. Talking these things through with BPO experts, you can quickly discover how they can help and what is involved to achieve it.
Compare BPO providers – you’ll want to ensure the service you’re getting is aligned with your essential needs. Comparing your options is always recommended and will ensure your company makes the most informed decision possible before outsourcing. Not all BPO models will be the right fit for your business or within your budget, so taking the time to understand the solutions available will enable your business to choose wisely.
We know how vital outsourcing can be when delivered as promised. At Ventrica, we make it our business to fully understand yours, as this is the only way, as a leading BPO service provider that we can address your most significant pain points and challenges and offer the right solutions. We are proud to say we have helped global brands with our award-winning approach, with a team dedicated to delivering the customer service and digital solutions required to help them succeed.
As an FCA-approved contact centre, we can address peak demand periods your business is set to face through inbound support and innovative CX solutions that deliver a truly omnichannel service. We become an extension of your existing teams to provide exceptional service and help implement the latest software innovations to keep your approach competitive and industry leading.
It all starts with a conversation with our team, where we can discuss what’s important for your business and your challenges so that we can deliver the solutions you need the most.
When growing a business, ensuring business functions and processes remain efficient as you scale is crucial.
50 of the most important things you should do during the process of selecting a BPO (Business Process Outsourcer)Articles
Contact centres have evolved with the times, digitally transforming customer experience.Articles
Contact centres have evolved with the times, digitally transforming customer experience.Articles