BPO experience: Looking beyond cost-savings

Offshore outsourcing has become a potent weapon for global companies seeking to improve their financial performance. But many companies have yet to realise the full benefits offshoring can provide – advantages that extend far beyond the cost savings that first attracted their attention. These advantages are at the foundation business process outsourcing( BPO) industry.

BPO companies operate as an extension of clients’ enterprises and run customised end-to-end processes – such as finance and accounting, insurance claims processing, and market and industry analytics – and bring industry-specific knowledge to each engagement.

Today’s outsourcing industry – which is expected to grow by 37% annually between now and 2010 – is much more specialised than just a few years ago, largely due to the deep industry expertise provided by leading BPO companies.

Management consulting firm McKinsey noted this trend in its May 2006 edition of The McKinsey Quarterly, in which consultant Vikash Daga and principal Noshir F. Kakas wrote, “As the offshoring industry matures, some providers are beginning to specialize in service lines in order to cater to new opportunities, from process reengineering to capturing previously unrecoverable revenues.”

Companies that take the initiative to choose outsourcing not only strengthen their bottom line, but also can improve process quality, increase efficiency, enhance customer service, develop compelling new products and services, and increase revenues.

Quality

Offshore BPO not only replicates processes previously carried out internally, but also performs them better by utilising highly trained senior managers and associates with industry-specific expertise.

BPO companies recruit several hundred associates each month – including individuals with industry certification or advanced degrees in travel, healthcare, management, accounting and finance. Associates are matched with assignments based on a highly effective predictive framework and provided with additional training. This approach delivers important value to clients in terms of reduced program-launch times, better allocation of resources and high-quality performance.

Offshore BPO providers also supply risk-management protocols and redundancies that often are cost-prohibitive if a company attempts to replicate them in-house. Acquiring these capabilities through BPO ensures business continuity, data security and regulatory compliance. In many cases, it also increases productivity – sometimes by as much as 60 per cent.

Efficiency

Improvements in productivity, when combined with 24x7 work capabilities, also enhance efficiency. Capitalising on the time difference, clients rely on offshore BPO partners to complete overnight projects – such as market data analysis – which enables in-house staff to keep projects moving according to schedule.