BPO models vary by provider and customer, from limited transactional outsourcing to comprehensive models where the BPO provider assumes responsibility for an entire function. BPO models can also be classified as offshore, near-shore or onshore models.
Business process outsourcing (BPO) models vary by provider and customer. Companies that outsource some functions have different goals and different expectations from the BPO models used. A company may not want to outsource an entire function, such as customer service, but only specific tasks and transactions within that function, while maintaining internal management of the function. Broader BPO models would involve more of the tasks of a specific function being outsourced to a specialist vendor; The aim would be to get the experience of the outsourcing company in that area. Another type of outsourcing contract would involve a comprehensive BPO model in which entire functions are outsourced to the BPO provider.
In a limited outsourcing model, the BPO contract would limit the service provider to specific tasks. The purpose of this limited transactional outsourcing may be to benefit from the specialized skills offered by the outsourcing company or to reduce the costs associated with this task. In a broader BPO contract, the BPO provider would handle multiple functions in areas such as customer service or central administration. The contract with the BPO service provider would outline the BPO provider’s and customer’s responsibilities in relation to these functions.
Much more comprehensive BPO models are possible, in which the BPO provider assumes responsibility for an entire function. This model is useful for a company that is unable to perform these functions in-house and needs access to skilled people and the appropriate technology to perform the task. A company using this comprehensive BPO model can focus on its core functions without the distraction of non-core tasks and can benefit from lower BPO service provider costs resulting from economies of scale. This type of template is useful for a small business or start-up company that needs to develop their product and grow their business. This type of BPO arrangement can be implemented for a relatively long period of five years or more.
BPO models can also be classified as offshore, near-shore or onshore models. An offshore model can offer advantages, including low costs and specialized services, and is often used by relatively large companies for key customer functions such as call centers. A coastal model would involve a BPO service provider in the same country as your client company and would be beneficial to that client due to the BPO provider’s expertise and infrastructure. A variant of the onshore model would be a nearshore BPO contract, where the service provider is in a nearby country.
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