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Businesses can use both information technology outsourcing (ITO) and business process outsourcing (BPO) providers to create more efficient workflows, with ITO providers creating cost savings related to technology systems and BPO providers leading to greater operational efficiencies. While the services offered by each provider differ, they are designed to complement each other, and it can make sense for an organization to adopt one ahead of the other. ITO professionals recognize the types of technology capabilities needed, while BPO providers perform specific tasks such as customer service or accounting.
Business process outsourcing (BPO) and information technology outsourcing (ITO) are both ways a company can reach beyond its capabilities and bring in another vendor for support. Each of these providers has unique roles, but there’s also some overlap. In essence, a business is looking to ITO and BPO providers to create more efficient workflows. An ITO provider should create cost savings related to computer networks and other information systems, while the services of a BPO provider should lead to greater operational efficiencies in nearly all areas of a business.
A business can apply to hire both ITO and BPO providers. The scope of services offered by both of these providers is different and one does not eliminate the need for the other. Also, on average, there is no rivalry between the types of services offered by BPO and ITO providers.
Unless financial savings related to technology systems and procedures are discovered, an ITO vendor has not made a difference. Once a BPO provider is hired, improvements must be made in business processes that can lead to greater financial results in a business for such service to be considered a success. Efficiencies achieved through a BPO provider could be related to human resources, finance or any operational area of an organization that is part of a company’s core business.
While ITO and BPO services are designed to complement each other, it can make sense for an organization to adopt one ahead of the other. Introducing an ITO vendor sooner can lead to the quickest financial savings, which is a good place to start. There is no need for an ITO vendor to remain involved long-term, as after potential cost savings have been identified, those changes can be tailored to the business. Once the cost savings are realised, the conditions can be ripe for a BPO vendor to step into the landscape and create greater operational efficiencies across the organization.
Other differentiators between ITO and BPO firms include the expertise of each vendor. ITO professionals are able to recognize the types of technology capabilities needed in an organization, ranging from archiving to wireless service support. Suppliers should be able to negotiate costs and terms or streamline services based on the knowledge of these industry professionals. BPO providers perform specific tasks on behalf of an organization, such as customer service, accounting or personnel management.
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