Business process outsourcing, commonly called BPO, is a growing trend in business today. Even though the economy continues to improve, businesses are still hesitant to invest large sums of money into increasing their workforce, and good talent is hard to find. More and more businesses use BPO – the contracting out of business services such as human resources, finance and travel management to a third party – to stay successful and relevant in today’s global marketplace. BPO’s success is showing; according to Statista.com, the revenue of the global BPO industry was 27.7 billion U.S. dollars in 2013.
Simply stated, BPO allows businesses to focus on their core strengths and let the “experts” best utilize their time and talents. The benefits of BPO include improved overall productivity, cost reduction and control, and quality improvement. For a lot of businesses, BPO makes sense.
Like any business affiliation, instituting and managing a BPO partner relationship requires time, energy and an intentional desire from both parties to be successful. We’ve worked with many clients on making the most of their BPO partner relationship, and over time, have learned how to completely maximize this connection.
- Involve the C-suite
In order to create a successful outsourcing relationship, be sure that the executive team in your organization is involved in the decision. It’s critical for management to effectively communicate how outsourcing will not only reduce costs, but also meet the business’ overall company goals and strategic vision. By positioning outsourcing as a true benefit to business, this decision makes it easy for executive buy-in as they can see exactly how a partner outsourcing company will increase productivity and present an overall cost-savings for the organization. Take the time to show executives how outsourcing weaves in perfectly with your strategic vision, and include them in the outsourcing planning process.
- Create a win-win situation
When outsourcing any business function, be sure to work with the outsourcing company to create the best outcomes for everyone…both for your business and the partner organization. This is absolutely critical to success. Ask questions, consider options, discuss opportunities, best practices and work together to design the best approach. This open communication is essential for success, and leads to increased efficiencies and better productivity. An open line of communication is ongoing as the relationship continues, creating a “win-win” situation for both.
- Share cost center history
Businesses sometimes have little understanding of how and why one of their cost centers (i.e., human resources, legal, etc.) is such a large part of their budget. Gather all of the available data and analyze it. Ask questions such as, why are we losing money in this area? What isn’t working? What improvements can we expect if we work with a BPO company? Once time is taken to gather relevant data, review business processes, and assess the outsourcing solutions, the decision to outsource becomes easy. This in turn creates a better relationship with your outsourcing company; they know exactly where to start, and where they need to go.
- Define partnership expectations
Important to the success of any business relationship, but especially with that of a BPO partnership is the clear definition of expectations. Once the questions and answers have been vetted, and baseline benchmarks have been set, develop a detailed service line agreement (SLA) or a structured contract that defines objectives, processes and outcomes. Be sure to focus on the “what” of the expectation and not necessarily “how” it’s completed. One of the biggest benefits of BPO is knowing that the experts of that specific function are taking care of things for you. Once expectations are clear, let them work their magic.
- Invest in your BPO manager
As expectations and processes are defined with your BPO business, it’s critical to also discuss how the process will be managed and measured internally (within your organization) and how your BPO will be included in that process. Is the relationship being nurtured? Is there a “check-in” system in place to be sure that the process is still effective? Is there a regular meeting scheduled with your BPO account manager? Is feedback being shared openly to improve the relationship?
We’ve found that in order to ensure a successful outsourcing relationship it’s essential to have a someone within the business whose top priority is managing this important relationship, assessing the needs and expectations of the company and the BPO partner. This regular system of give and take both within the organization and with the BPO experts allows for open communication and overall business improvement.
BPO can really benefit an organization by allowing for complete focus on core business functions. When speaking to me about travel management, a customer once told me: “I can do our corporate tax return on my own, but why would I? My accountant saves me the time, and – more importantly – his skill and expertise allow me to concentrate on my area of expertise. I apply the same reasoning when I choose a professional travel management firm.”
Are you in the midst of starting a BPO partnership? Or are you looking to improve your existing outsourcing relationships? Outsourcing important business functions to the experts allow for your business to focus on what it does best. By investing in a trusted relationship with your outsourcing partners and nurturing this relationship, your business will move toward a successful, productive future.