The advantages and potential disadvantages of engaging a BPO partner

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.

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? 

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.

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.

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.

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.

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.

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.

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.

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

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.

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.