Business Process Outsourcing Examples and Types of BPO
Have you ever ordered food from your favorite restaurant through a food delivery service?
Or contracted a packing and moving service to help you move your household stuff while moving from one place to another?
Or sent your children to school to learn?
Are these business process outsourcing examples?
They are not. These are examples of personal services that you are outsourcing.
You could have cooked the food if you wanted. Or, you could have ordered from your favorite restaurant but gone to pick it up yourself.
You could also have loaded your car, or hired a truck and loaded it with your household stuff and moved it yourself.
You could also have kept your children at home and either home-schooled them or let them learn through observation and experience.
But you chose not to, for various reasons; convenience, cost, quality, etc.
Interdependence is a feature of human existence. We don’t do everything ourselves. We depend on each other for our needs. Early humans may have used the barter system to make exchanges fair, while the modern human uses money, in the form of different currency units, to exchange goods and services for a fair value.
The same is true for businesses. This interdependence manifests itself in the many business process outsourcing examples that we come across.
Sticking to the knitting, oWorkers has carved out a niche for itself in data related services and is now counted as one of the top three providers in the world.
The industry can be sliced in many different ways, using different parameters. In order to understand the industry better, it might be useful to take a look at the various ways in which BPO players can be classified.
Based on industry they work for
Each industry is different from other industries. Banking is different from insurance. Telecommunications is different from shipping. Building and construction is different from pharmaceuticals, and so on.
While this is also true for companies in an industry, the difference, which they seek to leverage to stand out from the crowd and achieve their goals, there are also many similarities amongst companies in each industry.
Whether by accident or deliberate effort, BPO providers tend to focus on some industries more than others, and come to be known as experts.
The business process outsourcing examples that emanate from this classification are perhaps quite straightforward.
If the work being done is for a Pharmaceutical company, we could call it a Pharma BPO.
If the work being done is for a company that offers Insurance products, we could call it an Insurance BPO.
If a provider runs a Contact Center for a logistics company, handles the Human Resources outsourcing activities for another logistics company, and does community moderation for a social media page of yet another company in the industry, it can get classified as an expert in the logistics industry.
There could be as many types of BPO as industries using services of BPOs. This type of classification can also be called classification based on verticals.
oWorkers supports clients across multiple industries from around the world. In keeping with industry growth trends, several of them are technology companies, including several unicorn marketplaces.
Based on borders
Outsourcing of business processes was a gradual process, starting with processing centers not far away that could be touched and felt, to the anywhere in the world model now prevalent, driven by the rapid advances in telecommunications technology and powered by the internet access explosion.
While in the western world, which saw the early growth owing to expansion of consumer franchises, the initial outsourcing would have been local or domestic, within the national borders, in case of some of the BPO powerhouses today, like India and Philippines, the initial growth would have come from the expansion of outsourcing activities of western corporations to other delivery centers beyond their own shores.
Conversely, geographies like India and the Philippines, later expanded to provide support to domestic business corporations, in step with the later explosion of consumer franchises.
Thus, BPOs can be classified on the basis of country of delivery with respect to the country of origin of work.
If the work being done is in a country that is different from where the work originates, we could call it an international BPO. An international BPO can also be called export BPO as the revenues from the business arise overseas and are remitted to the country of the provider for work done. These qualify as export revenues. Many developing nations provide incentives to companies that earn export revenues as it supports the balance of payments of the nation.
If the work being done is in the same country that the work originates in, we could call it a domestic BPO.
With our three global delivery centers in three distinct geographies, oWorkers provides onshore as well as offshore support to global clients. Our multicultural, multi-ethnic workforce delivers support in over 22 languages.
Based on distance (or shore) of delivery from source of work
This is perhaps an extension of the earlier classification.
An international BPO is also often called an offshore BPO to signify that origination of the work is from outside the “shores” of the country.
A domestic BPO is also often called an onshore BPO to signify that origination of the work is from within the shores (boundaries) of the country where it is being serviced from.
- If the work is being done in another country, but in a location that is close by, we could call it a nearshore BPO.
- If the work is being done in another country, in a distant location, we could call it a farshore BPO.
- If the work is being done in the same country, we could call it a sameshore BPO.
A delivery unit located in San Antonio in Texas for a business located in New York is a greater distance than a delivery unit based in Krakow, Poland, for a business located in Frankfurt, Germany. However, as it is in the same country, we would call it “sameshore” whereas Krakow, in relation to Frankfurt, would be called nearshore.
Similarity or closeness of the time zone in which the delivery location operates, in relation to the source location, is also considered while using these terms which could, often, be imprecise.
South Africa, quite a long way off in terms of distance but very close in terms of time zone, is often a location for BPO delivery for UK businesses. Would we call it farshore or nearshore?
While time zones facilitate turnaround time in some cases, all centers of oWorkers are equipped to operate on a 24×7 basis, should clients require it. This speeds up delivery on transactions.
Based on ownership of the delivery unit
As we perhaps know, companies tended to perform all processing activities necessary to take their product or service to market and keep it there.
When process outsourcing first started, the work was outsourced to another unit within the company that operated at an arm’s length from the business unit, mostly for the purpose of saving cost.
It is only gradually that people started seeing opportunity in running a company based on handling outsourced business processes. Of course, we now know that there are many business process outsourcing examples of this happening.
This gives us another method of classifying the industry, in terms of ownership.
If the work is being done by a vendor based on a contract, We could call it a third-party BPO. For example, if Concentrix handles mortgage servicing calls in Cebu, Philippines, from customers of Citibank in North America, it is an example of a third-party BPO.
If the work is being done by a unit or arm or branch of the company, we could call it a captive BPO. Of late, the term Global Inhouse Centre (GIC for short) has become common for what has historically been known as a captive operation. If North American customers of J P Morgan Chase are directed to a call center in Manila, Philippines, it is an example of a captive BPO.
Operating out of GDPR compliant, super secure facilities, with ISO (27001:2013 & 9001:2015) certification, oWorkers takes data security related concerns out of the equation while offering third-party BPO services to its clients. Our alliance with major technology providers also ensures that clients have access to the latest technology for their work.
Based on channel of service
When process outsourcing work began to cross national boundaries in search of rates, manpower and efficiencies, the focus was on outsourcing work that was substantial, so that the effort in migration and ongoing supervision could be limited, and it could yield efficiencies of scale.
This is why call center services were among the most popular for outsourcing, as they often involved large numbers of people handling calls, usually inbound, such as technical support or customer servicing. So much so that BPO came to be associated with call centers.
However, call centers only represent a part of what BPOs do. In fact, they are just one channel through which they can serve their clients and their customers. They are the Voice channel.
The Voice channel can be further divided into Inbound and Outbound Voice. Inbound handles incoming calls, with the most common types being Customer Service and Technical Support. Outbound Voice calls out to customers, an example being Collections, where you call customers to expedite recovery of loan payments.
Other popular channels for BPOs to serve customers of the outsourcing client are Email and Chat.
While BPOs could be classified as Voice BPOs, Email BPOs and Chat BPOs. Over the last few years, with unified contact solutions gaining ground, it is now likely that these various types of BPOs are all consolidated under one logical roof.
In terms of channels, if we step beyond customer facing services, the other large bucket is that of data related services which is where almost all the other BPI services would be categorized.
Many business process outsourcing examples emanate from this classification, like Genpact handling global payroll processing for Unilever, or E.Merck directing customer emails to a centralized processing center in Mexico.
The positioning of oWorkers in local communities enables us to attract the best talent, regardless of the type of work. We routinely get ratings of 4.65 or more from employees, both past and present, on platforms like Glassdoor.
Based on nature of work
BPO comprises a wide basket of services. And it is evolving all the time. Many of the services that constitute the major services outsourced by companies today, like community moderation services or image labeling, were not even faraway dreams or a vision for either outsourcers or BPO providers. The BPO industry has kept reinventing itself to stay relevant to clients.
One of the reasons BPO caught the fancy of organizations is that it became possible to get quality and efficiency in certain types of work. Companies that offered these services, built expertise in the particular area of work and created value for the outsourcer.
A company, in any line of business, has to carry out a number of activities that enable the business to run efficiently and comply with laws of the land. At the top level, some of these activities are:
- Maintaining books of accounts
- People Management
- IT and IT security
- Maintenance of physical infrastructure
- Procurement related functions
- Legal services
and perhaps many others.
These are all business process outsourcing examples and some of these could be further subdivided into more specific processes. People Management, for instance, entails recruitment, payroll processing, training and people training and development.
The company either develops expertise in all these areas, or hires expensive experts, or engages a BPO partner. Many companies now choose to engage BPO partners for several of these activities.
If the work is customer servicing, like answering billing queries for a telco, we could call it a Customer Service BPO.
If the work being done is payroll processing, we could call it a HRO (Human Resources Outsourcing) BPO, or just HRO.
If the work being done is Legal services support, ee could call it an LPO (Legal Process Outsourcing) BPO, or just LPO.
It is important to highlight that these lists are not exhaustive. This is to give you an understanding of a way of classifying BPOs. In addition to the services described here, there could be many other services that are outsourced, like:
- Medical transcription
- Reputation management
- Advertising copywriting
and many other services.
oWorkers is led by a management team with over 20 years of hands-on experience in the industry. They lead from the front and guide the teams working on projects, especially on unfamiliar terrain.
Based on the development index
As we know, BPOs have been able to deliver jobs to many underserved communities. This is why many governments encourage BPOs to set up shop in areas that are lower on the development index so that it creates job opportunities in the area.
BPOs can be classified on the basis of demographics of delivery location and it could be classified as a Rural BPO as opposed to one that would normally operate from an urban area.
Wherever it operates from, oWorkers follows strong screening processes that focus on the educational background of applicants while assessing their language, experience, IQ and EQ.
Our pricing model is unique. We offer a choice between out-based and input-based pricing models, with the choice resting with the client. Our business process outsourcing examples include many clients, especially from the US and Western Europe, who advise savings of almost 80% after engaging oWorkers in their business processes.