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3 Benefits That Business Process Outsourcing (BPO) Offers Businesses in 2020

Let’s face it, the world has undergone immense change this year. Here’s a fresh look at why BPO is going to be in demand this year.

One of the unfortunate realities of 2020 is that market sentiment has taken a hit. While many organizations have been able to push on, the global economy has entered into a recession. And, this means that businesses will be even more focused on cost minimization and efficiency than ever, as a way of sustaining cash flows and remaining in as healthy of a position as possible. 

What organizations do not want to do is downsize their scope and remit, because the economy will recover, and when it does, enterprises will want to be able to scale rapidly again. For these reasons, business process outsourcing (BPO) is going to be in greater demand than ever.

Understanding BPO

BPO is a simple concept – an organization hires another company to perform tasks that the company would typically do itself. Many think that this starts and stops at “back office” tasks, such as accounting or recruitment, but the reality is that just about everything can be outsourced, from sales and marketing through to IT, and even leadership via services such as consulting as long as professional resumes bring together outstanding portfolios and background.

It’s a sector that’s on the rise, and as an IBIS World report found “business confidence is expected to be sluggish over this period, which is expected to constrain downstream demand. However, many businesses may reduce operating costs during this downturn by using cost-efficient business outsourcing firms.”

For just one example of where BPO might have particular relevance to local enterprises, IT digital transformation is a key theme across all sectors and business types, particularly as organizations look to shift to remote working, better engage with customers, and enhance their online presence. 

Digital transformation is also a hugely complex undertaking and has a high failure rate – as McKinsey research has found, transformations deliver the expected value back to the organization in less than 30 percent of cases. A business can either spend big on IT and recruiting staff to manage the transformation project to the best possible chance of success. Or, they can leverage BPO to get proven expertise with these projects at a much lower cost.

The Benefits of BPO

In the current climate, BPO offers a number of significant benefits back to the organizations:

  • Savings on staff costs. Recruitment and training up to successful resumes is an expensive process. Furthermore, if you’re looking to recruit in an area where there are skills shortages (such as most highly technical fields), salaries and competition between organizations are significant. BPO gives enterprises access to skills – including highly specialized skills – without the expense of full recruitment.
  •  The ability to scale rapidly. As enterprises look to recover from the downturn, many of them will want to scale rapidly to improve their competitive position and reach as many customers as possible. With this comes the need for recruitment and, potentially, the creation of new business units. Again, this is expensive, but it also often has a big impact on company culture and requires a company-wide change management initiative.
  • The ability to undertake temporary strategic projects. For shorter projects (such as a transformation initiative), hiring new staff leaves you with the issue of what to do with them at the end of the project. A short term partnership with a BPO provider allows you to resource a temporary influx of workers and then immediately scale back down again at the end of the initiative.

The sum of these benefits is that the organization can minimize costs while maximizing the resources that are available to it. There is the perception that BPO is only really of benefit for the more menial tasks within the organization, but that perception is rapidly shifting as BPO providers invest in the skillsets and strategic capabilities of their people. 

Now, by finding the right BPO provider, business leaders gain access to a genuine extension of their organization, and teams of highly skilled people that will take a stake in the effective operation of the business, for as long as they’re needed.


Written by Luke Fitzpatrick

Luke Fitzpatrick is an academic speaker at Sydney University. He enjoys writing about tech, productivity, lifestyle, and is a contributor to Forbes.

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