Business process outsourcing, or BPO, can be a critical tool for helping enterprises achieve maximum efficiency and results. What is BPO, really? More importantly, what kinds of processes can be outsourced to a third party and how are those services delivered under a BPO model?
To help you out, here’s a quick explanation of business process outsourcing, plus a few examples of processes that you can outsource:
What is Business Process Outsourcing?
To put it in technical terms, as stated by tech-explanation sites like Techopedia, business process outsourcing is, “The contracting of non-primary business activities and functions to a third-party provider.” In other words, it’s the outsourcing of some of your business processes to someone else so you can focus on core business activities instead of worrying about backend tasks.
BPO is closely related to enterprise resource planning (ERP), which is the term for software programs that help businesses manage their resources more effectively. However, the major distinction is that ERP is intended mostly to consolidate processes with software, while BPO uses a combination of software and services to help automate certain tasks.
There are numerous processes that you can outsource with business process services such as:
Cloud-Based Payroll Processing
Payroll processing is one of the most important “back office” tasks in any business—just ask any company owner that ever messed up payroll for their employees. If you get payroll wrong, you run the risk of wasting money and alienating employees.
Cloud-based payroll processing is a business process service that helps you automate payroll so it’s more consistent and reliable while granting your employees easy access to their personal payroll info.
With payroll BPO, data extraction, tax calculations, report generation, and other key payroll tasks are handled automatically, freeing you and your finance team to focus on core business tasks instead of messing with QuickBooks or Excel.
Another benefit of cloud-based payroll processing solutions is that they help to increase the scalability of the business. By automating payroll, adding new employees to the organization generates only minimal amounts of extra work. This makes it easier to grow the business over time.
Automating Supply Chain Planning with Business Process Outsourcing
Another example of a business process you can outsource is supply chain management. Supply chain business process services allow you to control things like sourcing, contracting, and managing suppliers with ease by using a cloud-based platform to coordinate everything.
For example, the Oracle supply chain cloud solution allows you to “trade off internal vs. external production capacity, configure drop ship relationships, consolidate supply at your own facilities, or identify when a second-tier supplier’s limited capacity could put demand at risk.” This helps you to better optimize your supply chains for greater efficiency and reliability.
With a centralized database for available inventory and use reports, your business can streamline supply chain planning to avoid over- or under-ordering for important resources. Two key benefits of using business process services in the cloud for this are:
- Being Able to Analyze Data. With a centralized database for supply chain planning, you can track inventory consumption trends to better anticipate your enterprise’s needs over time. This helps you negotiate better prices by planning ahead of your needs without wasting inventory space.
- Enforcing Negotiated Pricing. If you have a contract with a supplier to acquire goods at a set price, supply chain management BPO services can help you automatically leverage those pre-negotiated prices and terms so you can achieve maximized savings.
Enterprise Financial Planning and Business Process Services
Business process outsourcing services help you centralize your business’ accounting and financial data so you can more accurately track your assets, accounts payable, and accounts receivable. This helps you optimize your financial planning so you can keep your company in the black.
In particular, the automated reports that BPO services provide help take it a step further than just enterprise resource planning software alone could. With business process outsourcing for financial services, the automatic reports you receive help increase visibility into your business and help with financial regulation compliance requirements such as the Sarbanes-Oxley Act (SOX).
For CFOs, the risk of being audited under regulations such as SOX can be an enormous burden. Failing to provide accurate and verifiable reports to auditors for monthly, quarterly, or yearly data could prove disastrous. By using business process outsourcing services on the cloud to automate processes, you can increase report accuracy and objectivity—which is useful for clearing compliance audits.
Human Resources Management with BPO
Large enterprises tend to have equally large workforces, and the HR tasks associated with your workforce only grow more complicated and time-consuming as more employees are added to the company roster.
Business process services for human resources management help to automate key HR tasks while providing a centralized and easy-to-manage database of employee information. Some of the key tasks that BPO can handle for HR include:
- Workforce Management. Business process services can be used to track, monitor, and improve the accuracy of workforce time reporting, adjudicate absence/leave policies, and help manage specific projects to increase productivity.
- Hiring Process Management. Track applicant information, create a workforce directory, and identify gaps in the hiring process to improve employee onboarding and make better hires in the long run.
- Workforce Rewards/Motivation. Keep track of compensation, benefits, payroll, and more to make sure your employees stay motivated and are rewarded when they go above and beyond to meet company goals.
The business process services listed above are only a few examples of the things that BPO can do for your company. To learn more about how you can leverage a cloud-based BPO solution in your company, request a consultation with Drivestream.