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Types Of Business Process Outsourcing

With business process outsourcing, or BPO, you typically have a wide range of services to consider. These services can be anything from back office processes, like accounting, or front office processes, like customer support. Once you have narrowed down the business process you need outside help with, you can then determine the best type of BPO for your needs. Where the BPO is located in relation to your home base, for example, may be an important factor. Here’s a brief explanation of the three main types of BPO companies so that you can make the best decision.

Offshore Outsourcing

Offshore outsourcing takes place in a country located far away from your country. One of the most common examples is a U.S. company outsourcing offshore to India. Labor costs are typically much less expensive overseas, which can potentially result in greater cost savings. The downside is that you may experience communication issues when partnering with a company so far away. It is also difficult and expensive to schedule in-person meetings when necessary.

Nearshore Outsourcing

Another option is to choose nearshore outsourcing. This still involves working with a BPO company in another country, but they are much closer to your home country. For instance, an American company could choose to outsource some processes to a BPO company with service centers in Mexico, like Confie. Language barriers are less of an issue and the location is still close enough where it is cost-effective to do on-site visits, if you’d like.

Onshore Outsourcing

With onshore outsourcing, you keep your operations within the same country, but move them or expand into a different city. This is most common if you start your company in a large, expensive city and then take some or all of your business processes to a less expensive part of the country. It’s usually the most expensive option of the three, but comes with the benefit of keeping your entire operations within your own country with native speakers. Also, larger BPO companies can offer a blended model, where critical/legal processes are transacted in their U.S. locations, and non-core processes are performed in a nearshore service center. This way, you are able to keep the quality and legal standards that the U.S. demands while reducing your costs.

When deciding what type of outsourcing is right for you, it is important to figure out what services you need help with and how to best balance cost with quality. Whatever choice you make, be sure to choose an established BPO company with a reputation of excellent results so that you can also maintain that same reputation for your own company.