We are perhaps in one of the most disastrous economic downturns of all time. In such an unprecedented global crisis, it is not surprising to see companies cutting down costs severely. On the heels of this humongous global recession has come a sharp decrease in the revenues of millions. Consequentially, a vast number of labor and overheads have to reduce immediately too.
However, there is good news for companies that have even a little financial flexibility. They can scrutinize their investments tightly and implement such initiatives that will ensure immediate return. This ideal solution is possible with Business Process Outsourcing, wherein both the said objectives are easy for companies to achieve.
BPO helps companies make money faster, improve operational health, business flexibility, and scalability in the future.
We all witnessed a promising and sustained growth when this decade began, but now, our economic reality is far from that happy bubble. We cannot doubt the arduous efforts the industries will need to achieve real growth, even when the market regains some of its faith. Many industries, therefore, will need to reset their expectations quite dramatically.
If you look all over today, you will find those businesses in hot waters that are not operating on flexible operational models. Those businesses that possess flexible models can meet the variations in demand and supply and thus survive better.
This environment indicates what a lifeline Business Process Outsourcing is for companies. BPO's capacity to provide an efficient and fast route to scalability, flexibility, and smooth operations has provided a solid ground for industries to stand, even in the downturn.
The most critical strategy BPO provides is generating fast cash and advantages for a longer-term. This alone is enough to make BPO a desirable strategy for businesses right now.
With the falling demand impact revenues, companies have not been able to keep up with their debt repayments and provide for overheads. BPO is the mechanism that helps companies make fast cash and keep up with overheads and repayments.
The returns on outsourcing were traditionally a long-term consideration. Initially, there was no promise of how efficient and fast BPO would prove to be. Today, we see larger providers offering mega projects worldwide and an increase in the efficiencies. We can also see a cash flow regulating within mere months of outsourcing.
If you looked at companies' experience all over, you would note approximately 30 to 60% savings from their baseline costs in just the first year of their outsourcing.
In BPO, a company may outsource only a part of or their entire business process to a third-party vendor or service provider. The provider, in turn, accesses greater efficiencies, technological capabilities, and a greater scale. All these advantages combine to provide a valuable edge for the organization in the marketplace while freeing up its internal resources to devote to the core capabilities.
You may also be aware of the "back office outsourcing" segment of BPO because it undertakes the back-office operations, including HR, payroll, accounting finance, and others. However, the increased business opportunities have brought other process opportunities, too, such as knowledge-based and analytical processes to outsource. Examples of these tasks could be fraud detection, claims to process for insurance companies, clinical data in pharmaceutical companies, store operations for retailers, and others.
An economic downturn of the magnitude we are currently facing could wipe off industries and businesses for years. Thankfully, business process outsourcing is just the savior the business world needed to stay afloat despite the crises, and it is exactly what we can see happening. A flexible model of operations has made it possible for organizations to outsource business processes globally, keeping the work market alive and revenues flowing.