Archive for the ‘Business Process Outsourcing (BPO)’ Category

Business Process Outsourcing: Accounts Payable – Issues and Opportunities

Posted by: R. Bokhari | Posted at: July 27th, 2010 | Posted in Business Process Outsourcing (BPO)

The accounts payable function is a critical operation in an organization as it ensures the smooth flow of products and services by suppliers by ensuring they are paid in a timely fashion. Due to the complex and vast supply chains that are the norm these days, any slight disruption caused by payment delays or inaccuracies can bring the business operations of an organization to a grinding halt. As a result, there is usually a dedicated staff that handles the invoicing and vendor payments. The staff ensures that the invoices submitted by suppliers are accurate, conform to purchase orders and corporate purchasing guidelines, and meet any required government regulations.

The work load of the team that oversees the accounts payables is skewered towards month-end financial closings and lot of their times is spent on getting the invoices corrected and completed before the closing. As a result it is quite common to see the team putting in long hours before the month-end closings to get things in order.

Due to this cyclical, and at times, tedious nature of the work, more and more companies, big and small, have started looking to outsource entire or portion of this work to outside vendors. Normally this involves companies working with trusted partners who do most of the work of ensuring the accuracy of the invoices and payments, and resolving any related issues. Generally service provides get paid either on per-hour basis or per-invoice basis that they process. This greatly reduces the need for organizations to have full-time staff just to meet the month-end load and can therefore deliver meaningful cost savings.

Just like any other outsourcing initiative, transferring of accounts payable work to an external provider takes careful planning. This is a significant business process change in the client organization so therefore has to be properly communicated by the senior management and bought-in by all the effected people. Since the work that is getting transferred involves financial data, the client has to make sure that internal processes are very well documented and the provider is thoroughly trained and well-versed with those processes and guidelines.

The transfer of accounts payable function itself is not very complicated. With advance imaging technologies widely available these days and faster internet connections, both paper and digital invoices can be transmitted efficiently through secure networks. The provider employs stringent security policies to safeguard the data, process the invoices and payments, and field any questions or concerns that the vendors may have. In the end, the provider submits all the relevant data to the client organization which incorporates that into their financial reports before the closing period.

Once the process has been setup and is smoothly functioning, the long term cost savings are substantial and worthwhile.

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BPO – An Effective Way to Grow Small Businesses

Posted by: Amna Arif | Posted at: April 30th, 2010 | Posted in Business Process Outsourcing (BPO)

With the outlook of global economy still uncertain, companies are looking towards smaller and lower risk outsourcing transactions for achieving their cost saving targets. This approach makes sense because if the larger deals go wrong, the cost for companies to roll back their investments are proportionately higher. Even when the companies are awarding smaller contracts, their expectations for quality and commitment from their providers have not wavered. On the contrary, companies expect outsourcing partners to step up their execution and show their commitment by continuously providing high quality services at a reasonable cost.

For providers, this implies that they need to step up their game. They need to put much more focus on understanding clients’ businesses, their processes, and their objectives that they want to achieve with the collaboration. This will minimize the operational, strategic, and capability risk. Secondly, the providers need to improve their delivery process. They need to incorporate the necessary technology and tools in their delivery process to make it more efficient and less error prone.

While the recession has slowed and somewhat changed the BPO dynamics, the fact remains that this segment of technology services will continue to grow. According to Baystreet.ca, the global “addressable” BPO market is worth $122-154 billion U.S., most of it in retail banking, insurance, and travel/hospitality industries, with such sectors as the auto, telecoms, pharmaceutical, accounting and Human Resources catching up.

Let’s review some of most common business process outsourcing sectors:

Accounting Outsourcing

Accounting Outsourcing is gaining popularity with SMEs because it is becoming a challenge for them to keep their books up-to-date at a reasonable cost. Accounting outsourcing services not only reduce the annual cost by 50% to 60% but also eliminate the need to maintain a separate accounting department.

Some of the services under this category include:

• Account Receivable and Payable
• General Ledger
• Fixed Assets/Equipment Accounting
• Audits and Project
• Closure of Books
• General Accounting Reporting
• Accounts Reconciliation
• Cash flow Analysis
• Sales Analysis
• Billing Services

Data Process Outsourcing

Data, once collected and properly organized, can be a powerful tool for decision makers. It can provide valuable insight and help companies formulate their future policies and growth strategies. With data process outsourcing, companies can access highly qualified resources at reasonable rates.

Some of the services in Data Process Outsourcing include:

• Data conversion from multiple platforms to single platform
• Conversion of raw data to desired format
• Data compilation from different sources
• E-book conversion
• Catalogue data entry
• Receipt and bills data entry
• Editing, sorting and indexing data

Customer Services Outsourcing

Prompt, courteous, and knowledgeable customer service is essential for survival of any business. Customers, who are not satisfied with how their complaints or questions have been handled by a certain company, are ripe targets for competitors. However, companies are always struggling to find enough financial resources to continue to invest in their core business and at the same time to hire, train, and deploy more customer service personnel. Customer Service Outsourcing is a viable option which companies can use to bulk up their customer care staff while keeping the costs low.

Some of the services provided include:

• Call centers
• Voice emails
• Email/chat support

Transcription Outsourcing

One aspect of technology advancement has been the advent of paperless office. One of the processes supporting the model is transcription from audio files. Transcription outsourcing has reduced cost and turnaround time, and at the same time freed office resources from taking tedious.

Some of the services included in Transcription Outsourcing are:

• Medical transcription
• Audio book conversion
• Meeting agendas and notes
• To do lists

Knowledge Process Outsourcing (KPO)

This part of BPO involves outsourcing of more complex business tasks and processes. While in other areas of BPO, the workers are executing a defined business process which is repetitive in nature; in KPO the workers are using their knowledge of certain area to generate valuable insight and intellectual property. For example, an analyst in an offshore location, who has an MBA and some stock market exposure, can perform stock analysis and write a report, is providing services that fall under Knowledge Process Outsourcing.

Increasing education levels in offshore locations have opened vast KPO opportunities for companies looking for skilled and knowledgeable staff at reasonable cost.

Some of the services that fall under Knowledge Process Outsourcing are:

• Learning Solutions
• Business & Market Research
• Research & Development
• Content Development
• Data Analytics
• Training & Consultancy
• Equity Research

Conclusion

BPO provides a viable and profitable business model for both buyers and providers of these services. The cost savings are well documented and understood. As long as the involved players continue to adjust to ever changing economic conditions and technology innovations, there is strong reason to believe that BPO services will continue to gain traction and, therefore, should be a part of the overall corporate strategy of companies wanting to increase productivity and to reduce cost.

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Internet Marketing – A Low Cost Strategy

Posted by: Wasif Abbas | Posted at: March 30th, 2010 | Posted in Back Office Services (BO), Business Process Outsourcing (BPO), Small & Medium Business

E-commerce has continued on a strong growth path since it became a viable business channel in mid-nineties. Approaching fifteen years, the rate of its growth is showing no signs of slowing down. According to eMarketer.com, US retail e-commerce sales are projected to grow by 11.1% to $200.6 Billion[1] in 2010. Combine this information with increase in internet usage from 361 million to 1.67 Billion users between 2000 and 2009 at a CAGR of 18.5%[2], it can be concluded that internet as marketing and e-commerce channel continues to hold tremendous potential.

Any growth area will attract attention from companies hungry for more revenues and internet is no different. As the competition heats up, the ability to rank higher in organic search engine results requires more than just a good website. Similarly, another growing area is social media marketing. According to “Best-in-Class Companies” worldwide, 63% of the surveyed companies plan to increase social media marketing spending anywhere from 1% to 25%[3].

Let’s first look at four fundamental stages in developing an online marketing strategy:

Channel

Creating a website without creating a channel is like building a shop in the middle of a jungle. No one knows it exists, so it won’t attract many, if any, visitors. Therefore, efforts such as Search Engine Optimization (SEO), Social Media Marketing (SMM), blogging, and Pay-Per-Click (PPC) to name a few, help to create that channel through which potential customers are directed to the website. The goal is to drive relevant traffic.

Hold

A successful channel funnels visitors to the website but if the visitor bounces off main or landing page, then not much has been achieved. The visitor must find the landing page relevant and/or attractive enough to explore the website. Therefore, landing page in particular and website in general must cater to what the visitor is looking for. In short, the landing page must effectively convey the value proposition.

Stay

Once a user visits the website, the goal should be to encourage the user to stay.  The website should be well structured so the user can easily find the products and/or services offered. As a rule of thumb, the visitor should visit at least three pages for him or her to get a concrete idea of what the company is about.

Yield

Last but not least, the visitor must send in an inquiry or make contact via phone, email, etc. thus, generating a lead.

While larger organizations have the flexibility to allocate their marketing dollars where required, the small businesses (in $1 – $20 million range) find cost as the main hurdle in devising and implementing a sustained online marketing strategy. One way to address the cost factor is by outsourcing the IM tasks to a reliable outsourcing partner. Almost 80 – 90% of IM tasks can be performed remotely. As a check, you may ask your partner to devise your IM strategy and how it will be implemented. This will help you understand their capabilities and experience. Once IM strategy has been devised and implemented, a good number of the tasks become repetitive in nature thus making those suitable for outsourcing.

Another important factor is your outsourcing partner’s ability to collaborate and stay up-to-date with ever changing IM area. Google and other major search engines change the search criteria when they deem it necessary. IM falls more under Knowledge Process Outsourcing (KPO), therefore, your partner must have depth in its skill set and the intellectual capacity to adapt and keep learning this dynamic area.

Successful outsourcing of your IM activities will not only create and sharpen your competitive advantage but will also contribute to lowering the cost structure – an important goal given the current economy.

[2] http://www.internetworldstats.com/stats.htm

[3] Aberdeen Group, “The ROI on Social Media Marketing: Why it Pays To Drive Word of Mouth,” March 11, 2009

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