Back office BPO, Service level agreement (SLA), and Productized services are some topics covered in this article. You’ll also learn more about Offshore vs. nearshore outsourcing and the types of BPO. The components and terms of BPO can be confusing, but knowing the basics will help you make an informed decision.
Service level agreement (SLA)
An SLA is a contract that defines the minimum requirements that a provider of a specific service must meet. It typically contains metrics such as the mean time between failures, repair, and recovery time. Besides the metrics, an SLA should detail a customer’s rights and responsibilities if a provider does not meet these goals. In addition, an SLA should also include penalties for non-performance, escalation procedures, and termination mechanisms.
While there are several ways to design an SLA, the most common focus is accuracy and timeliness. More general categories are also addressed depending on the priorities of the business. For example, an AP SLA might require a 98% accuracy rate for invoices, while another may focus on processing invoices as quickly as possible while avoiding backlogs. A common focus of an AP service-level agreement is fast response time to vendor inquiries.
Productized services use predictable processes and prepackaged services. This eliminates the need for client-supplied proposals and allows the product provider to charge a fixed price for the service. It also typically has a quicker turnaround time. This makes productized services an excellent choice for small businesses. Productized services help businesses avoid the costs and hassles of generating new service offers. They are packaged at a fixed price and scope of work, making them more affordable than standard service agreements. Productized services are rapidly gaining popularity as more providers are putting their services to work.
Productized services are increasingly becoming crucial to business process outsourcing, or BPO. This outsourcing trend is rooted in the manufacturing industry, where manufacturers hire other companies to perform processes that fall outside their core competencies. Today, organizations are increasingly outsourcing these processes to third-party service providers. These companies are referred to as “BPO service providers.”
Offshore outsourcing vs. nearshore outsourcing
Nearshore outsourcing is a good choice for projects where time zones are close. It helps improve the efficiency and quality of deliverables. In addition to being cheaper than hiring in-house employees, nearshore outsourcing partners can be located in the same city or neighborhood. However, offshore outsourcing is more cost-effective than nearshore outsourcing.
While outsourcing is only one of the most convenient options for all companies, it can be cost-effective and time-saving. Many companies are moving towards automation and cloud computing as they reduce costs.
Robotic process automation
The Business Process Outsourcing industry is seeing many benefits from Robotic Process Automation (RPA). Its advantages over human resources include greater accuracy, increased speed, and reduced costs. In addition, RPA is easy to scale. Brands can add more bots as required to reach the optimal capacity. BPO and RPA are different processes combined; they deliver even more significant benefits to brands.
Robotic process automation can reduce operational risks and improve accuracy in any project. The performance of robotic workforces is based on predefined business rules, so there are fewer chances of unwanted errors. Additionally, RPA improves the efficiency of processes.
Back office BPO
Back-office BPO providers handle a broad range of business operations. Often, the functions of various BPO divisions overlap.
In the traditional model, the back office comprises employees who do not face clients. These roles tend to be supportive or administrative. While they do not generate revenue, they are still essential for the business to run smoothly. This back-office BPO model allows organizations to optimize their office space and reduce staffing costs.
Before outsourcing back-office BPO, companies should first identify their goals and challenges. This will help them communicate their goals to potential service providers. This will help build a beneficial long-term relationship. Outsourcing back office functions to third-party companies can help businesses focus on the most critical tasks. However, before outsourcing back office functions, it is essential to ensure the service quality is high. In addition, outsourcing companies should be financially stable and have a solid track record.