Having your startup seems glamorous. Doing something you’ve dreamt of doing since forever, turning your passion into your profession – it all sounds fantastic! The reality is slightly skewed. You’d wake up at 6 am, and before that first cup of coffee even touches your hand, it’s all hustle, hustle, and more hustle! Before you could put on your shower cap, you are donning the hat of a CEO, of an accountant, of HR, or even the sales guy. And by the time you could manage these hats successfully, the time for reveling in being a startup owner has passed.
But what if we told you that you could increase your managerial bandwidth? What if you could offload the burden of routine, monotonous tasks? And do all this by increasing efficiency and reducing costs? Enter BPO providers.
BPO is an acronym that stands for Business Process Outsourcing. Simply put, it means contracting business functions to third-party service providers or an agency.
As business owners, with great power, comes tedious responsibilities of mundane tasks that could have been replaced with product improvement, business growth, or team building. This is where BPOs step in, wherein front-office functions like customer service or marketing and back-office functions like HR, payroll and compliance, accounting and finance, or IT support can be outsourced.
Based on what your startup’s goals are you could decide to outsource any of your business functions onshore (within the US), offshore (outside the US, for instance to London) or nearshore (to the neighboring countries like Mexico or Canada).
- You end up saving time, which you can then use to focus on essential business plans.
- It may be cost-efficient to outsource a function. You save on overhead, training, and hiring in-house costs.
- You get access to qualified experts. An outsourced service provider works on multiple clients, their expertise range far and wide that probably an in-house counsel might not have.
- If you’re planning on global expansion, it’s easier to get a vendor on board to enable worldwide support for your business functions like customer service or payroll.
- Keep up with the trends. With the dynamic nature of the business world and new technologies and innovations booming, it makes sense to work with a partner who can help you stay ahead of the game.
But why should you even consider getting a third party on board to manage some of your core functions?
If you’re still on the fence on why outsourcing is a good idea for a function like finance – read on here.
But should you automate or outsource?
There is truly no easy way of deciding, which is better than which, it truly depends on the business. However, automation is not the last stop on the train. Usually, where automation fumbles, outsourcing steps in. The cyclical manner of most of the back-office and front-office tasks makes automation a smart choice. But the insights and the strategic inputs that a BPO partner can give are above par.
Most businesses tend to employ a BPO because it saves them the cost of indulging employees into training and maintaining the automation tools. For instance, manual data-entry jobs must be automated, but you do need someone to QC all the data variants. Plus, automation tools cost a fortune that small businesses, especially startups, cannot afford at the seed stage. So, for early-stage entrepreneurs, getting outside counsel on board makes much more sense.
Yes, all aboard the BPO train!
It’s great if you are considering getting external expertise on board for your company. Your life is going to get much easier, or at the very least organized. Before you hire a service provider, you must consider factors other than cost efficiency that will help you make an informed decision.
Data Security
For functions like IT or finance, a very important thing to remember is data security. Vet the partner before getting them on board. Ensure the NDAs are full proof. Confirm their cybersecurity measures. Make sure they have a coherent regulatory process in place. Sharing data comes with its security risks, so it is in your best interest to do your due diligence.
Resources and Technology
Check out the tools that the partner employs. See if they are a good fit for your business. Does the firm you are bringing on board have the expertise to handle more complex technology if required? Are their resources well-trained for the work you are delegating? Answering such questions will help you in selecting the best and most lucrative fit for your business.
Line of Communication
Trust, agility, and collaboration – you need these in the partner you hire. Establish proper communication processes between you and your partner – be it weekly meetings, monthly reports, etc. You should always prefer a transparent partner. This is especially crucial if you employ an offshore BPO because you’ll need to be wary of the time and cultural differences.
Identity and Brand Uniformity
You must understand that for certain front-office tasks like customer service or sales and marketing, the BPO vendor will be representing your brand. A little training on your brand values, mission, or guidelines would not hurt. For your customers and clients, it doesn’t matter who represents the brand, what matters is they get a uniform and reputed service.
So, there it is, a quick overview of how BPOs work. Writing off outsourcing because it may be risky is short-sighted. It is hard for businesses to stay efficient and productive if they handle all the tasks internally. Moreover, it wouldn’t hurt to have some additional expertise.
If you would like to talk about outsourcing accounting, CFO, payroll, or tax services at Rooled, give us a holler!