Demystifying BPO: Making Sense of Outsourcing for a Successful SME



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You may want to put up an SME, or you may already have one, or a few, then ask how can SMEs succeed faster? That is a valid question, and rightly so, because you would, of course, want a quicker turnaround time for the return of your investments. You have been firm in your decision to start a company, and then doubts start creeping in. You look around and then wonder why some companies succeed faster than others?

Looking around in this time of the pandemic, you see people wearing masks, still a handful of them out and about, not exactly the way you saw images of the market and foot traffic in your mind when you decided to start running your business. So you may have asked, “how do I get past the pandemic and move forward?” Or, “How can SMEs succeed faster despite the pandemic and move forward?”

Why are some businesses more successful than others?

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There are several factors to attribute to the success of a business. Depending on business size, you’ll see better those factors as they are scaled in large businesses. There is that thing, of course, about taxes some big businesses are allegedly able to get away with. Now that it is mentioned, let us clear that out of the way and concern ourselves with more viable solutions. So (excluding that continuous political and economic debate about income and corporate taxes), why are some businesses doing well than others? Why do they seem so efficient? How do they do it?

Easy answer: BPO. They must have a global operation or have some business operations in some remote locations that allow them to run their businesses 24/7, maximizing all the time in the world and all the resources they could find. But that would cost a fortune, doesn’t it? Answer: Not necessarily.

Now that we see that scaled, can it also be done by other companies? Where does one begin? What is it? Can just any SME access a BPO company? The radical innovation brought about by the concept of BPO has already grown into an industry itself. It has already been long recognized as it is, and now with many highly specialized BPO companies. How does an SME choose which company to get?

The BPO myth

Fatos Ameti, CEO at Sonnecto, a tech-driven company specialized in customer & software solutions, in his recent Forbes article (4 April 2021), debunks “the myth that BPO is only for large, well-established companies,” that it “is a thing of the past.” While he acknowledges that “struggling is normal,” he argues that “one of the most critical mistakes entrepreneurs make in times of difficulty is sticking to methods that aren’t working and refusing to think critically about alternative solutions.” He continues, “One such solution might be outsourcing, which some startups hesitate to engage in.” He asserts that “there is no doubt that outsourcing, when done right, benefits everyone involved, sparks startup success and clears the path toward growth.”

Business outsourcing, then, is not only for large, well-established companies, but also for startups, as well as any SME between the spectrum.

Business Process Outsourcing (BPO), what is it?

In his 2015 Forbes article, Jordan Kimmel, Co-Founder and Portfolio Manager at FACTS® Asset Management, a New Jersey Registered Investment Advisory firm, defines BPO as “a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider.” To contrast, he added, “originally, outsourcing was associated with manufacturing firms, such as Coca-Cola, that outsourced large segments of its supply chain.” (See also similar definitions by Investopedia and Corporate Financial Institute.)

(For more about outsourcing, history, updates, benefits, and pros and cons, see our related Insight article, “What is Outsourcing?”)

Basically, Business Process Outsourcing (BPO) is about hiring experts to do segments or all of your business processes for you. You may be limited by your business space, by the number of employees you have, by yet unforeseen departments and business processes — for any or all of these, you can always outsource, and there are always BPO companies out there, ready with their menu of BPO services, as though on demand. You may start looking at your front office and back office. BPO service solutions can easily be categorized into these two areas: front office (customer service, scheduling, appointment setting, market research and surveys, help desks) and back office (HR, accounting, data management, quality assurance, billing, purchasing).

One of the trends nowadays is harnessing data. How, indeed, do you harness data? If you have access to it and tried making use of it, good for you. Otherwise, if you don’t know how to do it, can’t do it, or just don’t have the time to spend on it, outsource it.

Key issues

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As there are a lot of factors that we can consider as to why some businesses succeed faster than others, there are also a lot of issues that can hinder reaching a business goal. Let us look at some of them.

– Ownership vs. access

Traditionally, one would want to own a portion of land, own a place, a property to do business, or grow one’s assets. But the idea of owning has shifted to the idea of a sharing economy in the search for a more practical and faster way, either to realize one’s objective or as a means to an objective: such as renting a place, doing business, watching it grow, earn profits, then acquire assets, which can then serve as further investment or a place for others who have recognized the same means to their similar objectives, and earn more out of it. What motivates this concept of sharing, however, is the need for access. As Giana Eckhardt and Fleura Bardhi, in their Harvard Business Review article in 2015, observed, “the sharing economy isn’t really a ‘sharing’ economy at all; it’s an access economy.”

Your limitations of space, number of employees, and foreknowledge may have become handicaps to your need to focus and manage various aspects of your business operations. Or those may have become hindrances such that you find it challenging to scale. Now, there are always business service providers you can access.

– Global operation vs. remote location

It is fascinating how big businesses are able to operate and are available at a global scale 24/7 globally. SMEs can also do the same. You can begin by entertaining the idea of “nearshoring,” that is, outsourcing a business service provider at a nearer timezone. An advantage with this is for you to still have some common working hours. Although still not a 24/7 business operation, it’s good enough to get into the concept of a remote location. Or you can try “offshoring” to some farther remote location. Well, there are countries where BPO is among their top industries.

The growth of the BPO industry in the Philippines, for example, has overtaken India, their competition in terms of location, as the country’s government dedicated areas in the country as economic zones which have become centers of BPO companies.

In other words, there is already so much supply of talents, skills, and expertise dedicated to business process outsourcing services. With all those, your business processes will surely be taken care of even while you sleep. Also, by taking advantage of those locations, you can then lower your BPO service costs by so much.

– Valuable resources: time and money

Time and money are valuable resources and more valuable in running a business. Spending so much of either one prompts you to spend the other to regain the former, then the latter, and so on. You may want to allocate funds to hire more in-house employees, but it will take more time to earn a targeted profit unless you keep working overtime. Or, to save financial resources, you may want to learn the ropes yourself, but you would have to allocate so much time for it. What you would want is time and money well spent. A way out of the rut is getting leverage from a business process outsourcing services provider. They are already well-positioned and are ready to hit the ground running. They already have the workforce with skills you may haven’t thought you needed, so you don’t have to do the balancing act yourself.

– Micro-management or trusting the experts

However, some business leaders would still want to be hands-on: they want to oversee the outsourced operations, they want to be the ones to train the outsourced manpower and be able to converse with them, just to be sure everyone is on the same track. That’s okay. And for that, BPOs are also ready for such arrangements. Some would just think of his chosen BPO as the expert; he or she took time anyway to find the best one among the top BPO companies, and so trusts the partner service provider 100 percent to do the job. Ultimately, the choice is up to the one looking to outsource.

(Related articles: “8 Tips in Finding the Right Outsourcing Company” and “Outsourcing for Small Businesses: A Visual Guide”)

BPO, the turnkey solution

At this point, it is clear that, for the problems considered above,  business process outsourcing is the turnkey solution. The next question, perhaps, is “which turnkey?” And “what to do when the turnkey that is right for you is elusive? You would then, perhaps, wish for an agent, a matchmaker, an advocate to guide you on these matters. Well, there is still another level of convenience: assistance from a BPO broker who can provide you with the right turnkey solution for your business needs. For example, StratAccess. We at StratAccess can help you move forward.

StratAccess Inc. (StratAccess), established in 2012, is committed to finding the best centers in the Philippines for its clients for successful BPO solutions. The company is focused on transforming the landscape of call center partnerships to meet the requirements of today’s small and medium-sized enterprises (SMEs). StratAccess consultants are attuned to helping clients take a hard look at their business objectives, current organization infrastructure, and operational practices.

We at StratAccess strive to build long-term relationships that extend beyond the typical vendor-client transactions. Our primary focus is to successfully promote and serve each client’s products or services as though they are our own. Combined with the skill and knowledge of the Philippine outsourcing industry, our company has positioned itself as a leader in delivering its clients access to qualified quality and cost-effective BPO referrals.

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