Business Process Services: Definition, Benefits, and Types

With the rapid change in technology, the fundamental nature of businesses is also evolving very fast. The organizations which once claimed to be the world leaders in their zone are now compelled to give way to the new age technology-driven unique business models controlled by the next-gen dynamics this is where business process services come into play…

The companies now have so much in line to consider for development and improvement that they don’t have time and energy to waste on the non-handling of processes. With proper business process services, rather than business process outsourcing services, the organizations can get the work done which they themselves find challenging from a team of experts.

This approach allows the companies to grow and expand. Even the legacy processes are being updated constantly using unique process-centric approaches to attain a more consistent, agile, and lean process. In order to gain a competitive edge, the businesses are fluctuating technological archetypes, and leveraging digital technologies such as automation, analytics, and IoT. AI & machine learning are also effectively incorporated into a system to build digital workforces for a better tomorrow.

The whole objective is cost-reduction, management of risk & compliance, providing sustainable profit growth, and ultimately creating a superior customer experience that opens ways for them to modify as per the future needs of the enterprises.

Let us see what exactly is a business process service.

What are Business Process Services?

Business Process Services definition is the services that we outsource by the organizations specializing in doing all the outsourcing activities. Particular business processes that aren’t considered the core competencies in an organization could be outsourced to companies that specialize in taking up those activities.

This allows those companies to achieve higher flexibilities in order to manage their finances and operations as well. Effective Business Process Services enhance user and customer experience, performs optimization of processes, and helps in cost and time reduction to market. It can help you to manage your business processes from top to bottom, thus enabling you to be focused on what’s ahead!

You should never confuse business process services with the concept of outsourcing as a whole. There is a clear distinction as Business Process Services involve outsourcing a complete business function (for instance, all the work involved in lead generation), instead of hiring for a single task (like hiring a VA from a developing country).

Most often the processes that the companies outsource, are usually not the core ones. Because you can’t trust a contractor for any critical task directly impacting the success of a company. You are most likely to get benefitted from outsourcing support roles, like customer relations.

Due to this, your team back home has more time to focus on the core business functions, instead of trying to acquire new skills. This ultimately is a win-win situation for your business. In spite of starting a customer support team from the very beginning, you’re assigning the task to an organization specializing in it – and finally end up spending a lot less, to strike the right chords.

What are the Benefits of Business Process Services?

The benefits of business process services are massive, keeping in mind that you are able to find the right partner company for your business. Some of these benefits consist of:

The most important benefit of a business process outsourcing service is its significantly low expenses. You have to pay very little for outsourcing work as compared to a salaried professional. You pay as per the needs of the company, enabling the organization to save a lot of money spent unnecessarily.

In addition to it, you can even get certain ‘tax benefits from the government for the same. You won’t necessarily get a direct tax break, but you’ll definitely get the options to attain profits on paying income tax made abroad.

For a new company or rising start-up with limited resources, you really can’t bother building a huge customer support team from scratch. You need to check whether you are doing the right thing or not! If you have a founding team with a technical background, then they are most likely to not have good training as a support team.

So, outsourcing a company that specializes in support, will help you achieve a better and efficient process at the same cost. This, in turn, enables your core team to concentrate only on what’s important for your company. These core processes are ultimately responsible for making your company stand out.

Consider a case, you are a company originating from Punjab, but you decide to expand your market in Tamil Nadu, you’ll have a hard time at the initial phase. Firstly, your sales team can’t just be imported there due to the language barrier. So, you’ll have to find people from that particular region only for the company management.

Even this wouldn’t resolve the problem completely as it would lead to some other issues – even if the company official is fluent in the language, they won’t know exactly how the market in that specific part of the country works.

So, a better option is to find a local partner in that area that has a native workforce. They will be already aware of the do’s and don’ts of the market there and will have the acquired knowledge of the language and culture as well. It is much easier to manage a 3rd party company as they can be put to work as needed.

Other Tangible Benefits of Business Process Services are:

Advantages of Business Process Outsourcing (BPO) that attract the companies

• More exposure to skilled experts in your business. You can substantially increase the business performance by outsourcing the experts of a particular niche. This gives good support to your core team by increasing their efficiency.
• You get your work done faster. This also saves you from the tedious recruitment and hiring processes.
• It is ideal for short-term projects that don’t require much time and people involvement.
• You get top-notch work and pay a professional who specializes in that area and save yourself from the heavy costs of hiring such an individual.
• 9. It enables you to plan and execute more effective, targeted campaigns and projects that you wouldn’t ordinarily be able to take on. This gives your business the chance to take new risks and experiment with different methods of exposure.
• Businesses see it as a way to reduce their tension of doing the difficult business processes by themselves.

What are the Types of Business Process Services?

For outsourcing functions, there are back office and front office functions. The back office comprises the internal company processes: accounting, purchasing, etc. Whereas, the front office functions, comprises everything involving the customers: sales, customer support, and so on.

There are 3 major types of outsourcing:

1. Offshore: When outsourcing is done in a distant country. For example, think of the USA to India. That usually means there’s a significant cost reduction since the salaries in the developed countries can be 8x expensive than in India.
2. Nearshore: For countries that are situated near to the contracting company. For example, think of the USA to Mexico.
3. Onshore: Outsourcing is done within the same country but in a different city or location. The core value here is still cost-cutting while maintaining the added benefit of having native employees. This cuts out any chances for confusion and miscommunication.

What are the Risks?

Business process management outsourcing plans offered may seem promising and potent, but there are many flaws that these companies generally have.

Of all the schemes, the most insisted scheme is Business Process Outsourcing. As easy and convenient outsourcing of Business processes may sound, it has the potential to many threats.

Here are a few insights on Business Process Management Outsourcing that explains how it will not benefit your company:

1. Integral to Business:

A business process is never one that fits all. Each organization is unique and has its own way of functioning. In fact, the uniqueness of these processes is the one that makes each enterprise different from the other. If business processes are outsourced, the uniqueness will have no meaning.

2. Confidentiality:

In the cutthroat competition where all the businesses procure at the same rate as well as all the products are priced at the same rate. The difference in profit margins is due to the difference in the business processes of organizations. The cost-cutting and cost-saving all are the outcomes of efficient business processes.

No organization would want to make their profit-earning secrets public. Outsourcing BPM means relieving all your business secrets to an outsider, making your ideas public!

3. Involvement:

Any agency that offers Business Process Management on a project basis has the ultimate goal to earn money. For those agencies, your enterprise would be just like other enterprises. It would look at your enterprise as a project and never as its own. A business process is very special; it is designed by the owners with heart and soul. Outsourcing a business process will never have that emotion to it.

 4. Cost:

Taking a different company on board for outsourcing will always incur high costs than employing a person or training one. For cost-effective BPM, it is always advisable to go for an in-house employee than appointing an agency.

5. Understanding:

What is critical for your enterprise’s processes is difficult to be understood by an outsider. What matters to your enterprise might not be passed on with the same conviction as an outsider. Hence, the level of understanding of your processes will always be different from what would be perceived by an outsider.

Business Processes make an enterprise what it is? A Business is bound to excel when the processes involved are in the continuous improvement phase.

How to Choose the Right BPS?

To avoid all the mentioned issues, you need to pick the right business process partner. It is a very important step as if you mess up at this stage, then searching for a new one is going to be both expensive and time-consuming. So, here’s our step-by-step guide for you to decide the best business process outsourcing partner for you!

1. Clearly identify and define your business requirements
   

   It’s crucial to have a crystal-clear understanding of what the processes will be doing exactly that you are going to outsource. Without specifying the needs, there will be issues to find a perfect partner for the job. Make your points as clear and specific as possible. This is important so as to ensure that the partner company understands the job details very clearly.

2. Request for Proposal (RFP)
   

   Draft a well-structured Request for proposal (RFP). Ensure to include all the business details about the project thoroughly. Then, begin sending those out to the potential partner companies.

3. Examine the received proposals & pick your partner
   

   Skim through all the received proposals and identify the ones that are the best for you. Don’t select the lowest-cost partner, check properly the services they offer. A sub-par partner may cost you even more expenses as there are chances that their collaboration doesn’t prove to be that fruitful. That means, there would be additional costs for switching partners in such cases.

4. Drafting & Contract negotiating – Figure out all the minute project details
   

    How the communication will be established within the organization? How frequently? At what times exactly? What is going to be the expected budget? What would happen if the contract needs to be ended prematurely? And how do they negotiate disagreements?

5. Actively run the project
   

   Once you are thorough with every detail, it’s time to start off the project. By now, you will already have a plan of action readily established by your end.

6. Monitor the performance of your partner company performance
   

   Actively access and monitor your partner company’s performance and check if there’s any degradation in the quality of work with time.

Conclusion

Managing and monitoring a business process service can be a tricky job, have proper business process management software can prove to be much handy in such cases. Choose the right BPM software to manage, optimize and automate even the outsourced processes efficiently.

Q1: What is the primary difference between Business Process Services (BPS) and traditional outsourcing?

The key distinction is that BPS involves outsourcing complete business functions, often non-core processes, to specialized service providers. Traditional outsourcing typically involves hiring individuals or teams for specific tasks. BPS offers comprehensive management and optimization of processes.

Q2: What are the advantages of outsourcing business processes, particularly when it comes to customer support?

Outsourcing business processes, such as customer support, can lead to significant cost savings. It allows companies to focus on their core competencies while gaining access to skilled experts in the outsourced area. Additionally, it enables efficient handling of short-term projects and expands the business’s capabilities.

Q3: What are the potential risks associated with Business Process Management Outsourcing (BPMO), and how can they be mitigated?

Risks of BPMO include the loss of business uniqueness, confidentiality concerns, and lack of involvement from service providers. To mitigate these risks, it’s crucial to choose the right outsourcing partner carefully, clearly define project requirements, and actively monitor performance to ensure quality and alignment with business goals.

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