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Nenad Lazarevic is CMO, insightful.
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A $260 billion industry rarely goes unnoticed.
But when it comes to business process outsourcing (BPO), this is very true. This is due, in part, to the nature of their “below the line” operation. But as I argue, this dormant $260 billion industry of his may just be the key to future business success, resilience and continuity.
I believe BPO can be done for information-based businesses in the same way that cloud kitchens have done for the hospitality industry to eliminate inefficiencies, increase margins and reduce operational complexity.
Definition of BPO
Morton H. Meyerson of Electronic Data Systems, the destined CEO of such a name, proposed outsourcing as a business model in 1967. But it wasn’t until 1989 that the practice became a formal business strategy. The rise of the information age ushered in his BPO, a new evolution in outsourcing.
While outsourcing has traditionally meant taking over non-core processes on an ad-hoc basis, business process outsourcing involves permanently outsourcing entire business functions. With today’s vast BPO infrastructure, almost any business function can be outsourced, including customer service, data analysis, marketing, software development, and IT administration.
This broad availability of employable skills, coupled with ever-growing demand, has pushed the BPO market to its current size, which is expected to nearly double to $492 billion by 2028.
Decentralization done right
Decentralization is a buzzword that has lost much of its luster, thanks in large part to cryptocurrency maximalists.
Rather than relying on the hyped and underperforming decentralization promised by blockchain, BPO enables more pragmatic, real-world decentralization. This allows companies to geographically disperse their core operations for operational, economic and skills-based benefits.
BPO and the future of business
The Lean Startup model has long been a champion in Silicon Valley. Advocated by Eric Ries, the Lean Startup Model is defined as “an approach to building new businesses based on the belief that entrepreneurs should explore, experiment, test, and iterate when developing products.” increase.
After a period of economic uncertainty where job cuts are increasingly likely and hiring slows down or is often frozen outright, companies find innovative ways to continue growing. is needed. All businesses, not just startups, should adopt a lean approach.
That’s where BPO comes in.
Historically, cost reduction has been the driving force behind outsourcing. But with the rise of BPO, things are changing. It’s because we want to build a leaner, more resilient and efficient company. Supported by all sorts of his BPO, building a robust company with just a handful of centrally managed executive level staff is now feasible.
Benefits of using BPO
Specialist Skills On Demand
Suppose you need to build an in-house development team. Option A picks a Chief Technology Officer (CTO) and hires one at a time, hoping to separate top talent from the competition. Then go to Option B: Software Development BPO to provide an off-the-shelf development team with the necessary coding skills and scale. This skill-on-demand luxury extends to every corner of your business.
Minimal overhead and staffing needs
Office space and staffing costs increase, especially during uncertain economic times and inflation. BPO allows companies to meet their operational needs without personnel or physical office space, reducing fixed costs and improving cost control in the process.
Business continuity and resilience
When tough economic times hit, the bloat of a boom-time organization can become a liability. Case in point: In the tech industry alone, from 2022 to early 2023 he’s laid off over 246,000 people. Freed from the risk of layoffs and downsizing, BPO helps ensure business continuity and resilience in challenging economic times by supporting core operations.
Challenges of relying on BPO
Put all eggs in one BPO basket
BPO can provide critical operational support, but it is important that the company’s success and very existence do not depend on a single provider. Diversify the BPOs you work with and have a backup plan in case your BPO fails to deliver or goes out of business.
Manage and measure BPO performance
BPO has its own management structure, but that doesn’t mean it can’t be overlooked. Workforce analytics and employee monitoring tools can play a key role in managing and measuring your BPO team. This type of productivity monitoring software helps BPO teams track time on tasks, assess BPO agent productivity, and measure efficiency.
work goes offshore
Many BPOs are based in other countries and send work offshore. However, a BPO does not necessarily have to be based overseas. Many US companies seek extra support from US-based BPOs. As a result, his BPO market in the US is thriving and is worth over $68 billion, representing about 27% of his BPO market globally. This is also a job-creating industry, with over 657,000 people employed in his BPO industry in the US at the time of writing.
Why I’m Bullish on BPO
In the future, imagine a world where companies are built around skeleton management teams who outsource their core functions. This decentralized approach to business has the potential to be more robust, recession-proof, efficient, and economically viable.
Yes, there are some trade-offs and not all business models. But for many future founders, entrepreneurs and leaders, this business structure built by his BPO holds the key to launching and growing quickly and efficiently.
What do you think? Can you imagine building a company almost entirely on BPO?
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