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BPO: From Cost-Cutting Trend to Business Survival Necessity

As the demand for outsourcing has skyrocketed in recent years, the quality and efficiency of third-party service delivery has improved ten-fold.

Unfortunately, cutbacks over the last five years have forced many entities to give management more hats to wear with the same pay. This can be extremely detrimental to your company. Employees who feel overworked will deliver poor results, even more so when their assignments fall outside of their job title.

Outsourcing began as a trend initially to cut costs. However, companies everywhere have witnessed the immense benefits of BPO, and today it plays a fundamental role in the long-term strategy for corporate health and profitability. Small and mid-size companies are now integrating BPO to achieve new levels of competitive agility, scalability, and innovation.

Those who haven't outsourced yet are now facing the music: Why have they not contracted out the back office functions that continue to drain funds and time from the company's core business?

A survey recently conducted by the International Association of Outsourcing Professionals (IAOP) revealed that 80% of customers who outsource enter the venture to improve their overall business performance and operating models.

In 2012, Deloitte conducted a survey geared towards discovering outsourcing trends. Findings were determined from the feedback of global and domestic companies (revenue $5B +) who currently outsource.

  • 76% outsource some aspect of IT; 81% predict future ITO.
  • 30% outsource Human Resource functions; 46% predict outsourcing HRO functions in the future.
  • 37% outsource Finance and Accounting; 53% predict future FAO

Additionally: 73% of mid-size companies report plans to expand existing offshore business processes over within the next 2-3 years. This is up from 55% the previous year before respondents witnessed the positive outcome for their companies.

Another recent survey from HfS Research and the London School of Economics, (consisting of 277 BPO program managers), found that:

  • 63% of mid-market buyers reported BPO programs were very successful in containing costs
  • 41% of larger companies plan to expand existing BPO activity within the next year

These core insights reveal that in the coming years, company leaders will continue to renew outsourcing contracts and outsource additional departments. Within the US alone, outsourced services, new contracts, and contract renewals generate about $1 billion each year. HfS forecasts the BPO market to grow at 5.1% in 2013, and 6.0% by the year 2017.

Outsourcing has not only allowed companies the opportunity to refocus on their company's true objectives it helps increase productivity. Ultimately, successful partnerships with an experienced BPO expert will relieve your company of non-core and non-strategic objectives so that you can sharpen your focus on your primary business practices.

To leverage our decades of expertise and project design to boost your bottom line, email us directly at info@ddcusa.com 

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