Companies are built on great ideas. They may be entirely original. They may fill an untapped niche. They may even revolutionize another company’s product. But these great ideas can’t stand alone. As the company grows, that kernel of innovation that started it all will need support, including back-office operations to keep it humming, sales and marketing to keep it growing and legal teams to chart the course through the regulatory haze. Additionally, in the product-making business, that kernel of innovation also needs seamless supply chain operations, routine maintenance, occasional repair and expert customer care. Even service providers often rely on the services of others to succeed.
It can be tempting to try to stand all these processes up in-house, but you don’t have to go it alone. Any of these non-core — yet entirely necessary — functions can be outsourced to trusted business process outsourcing (BPO) partners whose expertise centers on exactly those business areas that may be holding you back from focusing on research and development, M&A, innovation and growth.
What Is BPO?
Put simply, business process outsourcing (BPO) (sometimes known as BPS, “business process services”) is the use of external partners to provide and manage specific business functions for you, from account management and financing to technical support and product repairs. BPO services run the gamut, and today, it’s an industry unto itself. Research firm Everest Group estimates the value of the BPO market at $300 billion worldwide, with BPO organizations of all sizes and specialties offering services to companies in every industry.
With a bounty of BPO partners to choose from globally, companies can elect to offshore services in another region, nearshore in a nearby country or stick closer to home with an onshore (domestic) provider. While proximity may be preferred by some companies, others may prioritize advantages offered by BPOs farther afield. Multinational companies may favor global BPO partners that can accommodate their needs anywhere in the world they do business.
What Are the Pros and Cons of BPO?
Build versus buy is the question at the heart of all outsourcing decisions. Is it more advantageous to develop and maintain a business function in-house or contract with a third party to take it off your plate? Companies choose to outsource for all sorts of reasons, including cost, skill gaps, labor shortages, limited agility, lack of flexibility or scalability, operational inefficiencies and bandwidth issues, among others. However, the scales may tilt in favor of keeping a function in-house if there is hesitation around transparency, security, intellectual property, expense or instability, which is why it’s important to vet potential BPO partners thoroughly to find one you can trust.
The business imperatives that compel companies to take a fresh look at their outsourcing strategy vary. They can support initiatives as broad as full product lifecycle management or as narrow as warranty support. Here are a few that drive technology original equipment manufacturers’ (OEMs) decisions, and some of the advantages BPO firms offer in support of each:
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Reshaping the business model: As companies grow and evolve, so does their business model. BPO partners give OEMs the flexibility to pivot as new products and services are brought to market, as service delivery and consumption preferences change and as customer expectations are refined by technological innovation. BPO partners are experts at what they do, which makes them exceptional sounding boards, experienced guides and highly valued business partners.
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Accelerating digital transformation: As the adoption of disruptive technologies accelerates, balancing legacy and new systems requires partners with the expertise and agility to fast-track your digital transformation. A BPO partner steeped in industry and technical knowledge and fluent in digital innovation — with a deep understanding of how to implement it to your advantage — is invaluable. Competing in a dynamic market demands nothing less.
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Reinvesting in growth: Innovation and product development are an OEM’s bread and butter. While there may be good reason to keep a non-core function in-house initially, there may come a time when that investment is better spent elsewhere. Outsourcing business functions to cost-effective, expert partners effectively shifts funds and focus to the heart of an OEM’s business.
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Accessing top talent and innovative technologies: When talent is at a premium and business viability depends on cutting-edge technologies, a BPO partner that lives and breathes business functions not in your wheelhouse is an absolute necessity. They compete to stay at the forefront of their field, so they invest in modern tools, proprietary systems and specialized expertise to deploy on your behalf.
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Reducing cost and risk: As unexpected global disruptions, shipping route blockages and other environmental and geopolitical hazards have taught us, business-damaging risks can arise seemingly out of nowhere. BPO partners know this, too, and build fault tolerance into their business models to buffer their clients from unnecessary liability. Not only do such forward-thinking strategies reduce risk, but they also prove cost-effective when the alternative is a potentially expensive, reputation-eroding business disruption.
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Scaling in fluctuating markets: It’s expensive to stand up a business function in-house, from recruiting, hiring and training to building the physical infrastructure to support it. It’s even more expensive to expand and maintain such functions in-house to accommodate for all the “what ifs” when demand fluctuates globally. The ability to increase or decrease resources in line with customer needs, seasonal demands and the rhythm of the market is a prime reason companies choose to outsource.
How Does BPO Work?
BPO organizations have different approaches to initiating, executing and monitoring relationships with their clients. It’s rarely a one-size-fits-all process, because no two clients are alike, but in general, the process typically encompasses:
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Discovery: Listening and learning about your goals and what’s keeping you from achieving them
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Design and development: Putting together a solution involving systems, processes, resources, training, tools and analytics, as appropriate — contractual obligations may be defined at this point, too
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Configuration, test and pilot: Ensuring the service solution aligns with business needs and/or customer expectations
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Onboarding and implementation: Developing plans for the long term, which can include everything from reporting methodology to transition planning, resource alignment and ongoing support
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Maintenance and assessment: Managing the nuts and bolts of the engagement once a service is fully transitioned to the BPO partner
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Adaptation and expansion: Joint planning and forecasting to accommodate growth and scalability requirements
How to Find a BPO Partner You Can Trust Like Your Own Team
When deciding whether to outsource, careful attention to benefits versus risks should guide the vetting process. This should be followed by a clear-eyed assessment of the BPO partner’s capabilities, strengths, weaknesses and potential to evolve as your business does. Considerations such as political stability, tax and trade structures, regulatory environment and access to skills and materials may also come into play.
Given that your brand reputation becomes tied to theirs, it’s imperative to find an experienced, transparent and trusted business process outsourcing partner that is fully invested in your company’s success. The right BPO partner will:
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Empower you with new ways to shift investments: Reallocating resources and funds from existing operations can help you accomplish your strategic imperatives, from accelerating digital transformation to ensuring your most forward-thinking engineers can maximize focus on innovation and product development. Essential vetting questions center on breadth and depth of capabilities and expertise.
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Give you peace of mind: BPO partners that pride themselves on quality will put it front and center in everything they do. They will ensure that you and your customers receive exceptional service. They will make it their mission to achieve the SLAs you’ve set for the work they’re doing on your behalf — because their own standards are just as high. They will listen intently to your needs and deliver beyond your expectations. Essential vetting questions center on quality, metrics and continuous improvement efforts.
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Be transparent: Whether they’re advising you on a new course of action or helping to navigate the throes of an all-hands-on-deck problem resolution, a trustworthy BPO partner will keep you in the loop and give you straightforward answers through an unbiased approach. Their business is built to support yours, so naturally, their success is entwined with yours. They’ll be diligent about resolving issues and forthcoming with transparent reporting that proves their worth. Essential vetting questions center on communication and proven case studies.
The Value of Business Process Outsourcing Throughout the Full Technology Lifecycle
The technology lifecycle extends well before and after the sale of a product, making the services that support it a natural fit for outsourcing. Consider a BPO partner with deep experience in end-to-end technology services for:
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Customer management solutions: Solutions provided by customer experience–centric BPO partners that encompass sales and operations, customer success, business intelligence and engineering can provide essential pre- and post-sales support that strengthens customer relationships over time. The benefits? Empowered channel partners, better customer engagement, more sales opportunities and faster revenue growth.
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Depot repair operations : When it comes to depot repair services, look for a BPO partner that provides engineers and technicians who know your products inside and out, comprehensive global logistics to ensure timely sourcing and delivery, as well as circular economy support to bolster your sustainability efforts and extract the most value from your portfolio.
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Supply chain management : The complexity of supply chain management makes it ripe for outsourcing to an expert BPO partner. Maintaining a seamless flow of the materials and parts required for production must be balanced with meticulous inventory management to keep costs in line without disrupting the business. Candidates must be vetted for legal compliance and ethical supply chain practices.
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Ready for a BPO Relationship Tailored to Your Business?
Shyft Global Services empowers you to reenvision where your business can go, simplify your operations and position your company for the future, all while maintaining a consistent customer experience. End-to-end technology services for both the product and customer lifecycle mean you can supplement your capabilities and accelerate business transformation without additional headcount or infrastructure. A tailored approach ensures that your unique challenges and aspirations are addressed with the right services to help you reach your goals.
Explore outsourcing solutions for a look at what companies of all sizes have achieved by outsourcing to Shyft. Then, get in touch to start building a customized solution that’s precisely right for where your business is today and where you want to be in the future.
About the Author
Tonja Gable serves as the Senior Director of Global Marketing and Communications for Shyft Global Services. She brings more than 20 years of marketing, communications, branding, public relations and change management experience to the role. Tonja leads a global team focused on driving brand awareness and demand of Shyft’s services through an integrated marketing approach.
