How Business Process Outsourcing Reduces Cost and Increase Profitability

Arefin

January 21, 2019

Business growth chart

You. Yes, YOU! You’ve got a unique business model. You’re on your way to inspire others, to be the next big thing. You’re definitely doing something right because business IS booming! But after a period sustained growth, you see that your business momentum is slowing down. Yup, you’re officially in a rut.

Sounds familiar? It should. Like millions of successful businesses, you too had the right strategy at the beginning. But as you started to gain more customers and expand your business, you forget to take into account one crucial step- to re-innovate (or rather renovate) your business process to keep up with the changing times.

But What is Business Process?

Good management in organizations are constantly on the look-out for market trends and changes. They do so because they understand how important it is to look at the market with a microscope; in the blink of the eye expectations of consumers might change, or your competitor can easily under-cut you by providing a better value at a lower cost.

To make sure you’re not caught off guard, you must always be looking for ways to identify and improve processes that your organization does on a repeated basis. That is the bare essence of Business Process- a set of repeated tasks and activities that will help you deliver value to your customers.

How Does Back Office Support Fit into the Picture?

Back office support services provider will help your firm with Business Process Outsourcing to fulfill two categories: Primary activities and Secondary activities of your business

Primary Activities relates mostly to your product/service’s research and development, design, creation, production, delivery, marketing, support, and after-sales services.

Secondary Activities relates to all supporting activities that provide inputs to primary activities of your business. They include materials management, human resources, information systems and company infrastructure.

Now that we’ve gotten the business jargons out of the way, let’s get to the burning question that is itching to be answered; how does back office support fit into the whole picture?

A good back office support services provider will help your business conduct better primary activities in terms of superior design and production of product/service with the use of IT, or it could be used to increase your product/service’s functionality and add value for your customers.

It can also be used to help lower your organizational cost structures of secondary activities as well. For instance, you can provide similar after-sales services and support services to solve your customer problems with automation instead of relying on office personnel. However, you must be careful that the service quality must match or surpass so that your customers are more willing to accept the changes. Cut costs, not corners!

What’s the Bottom Line?

The conclusion that we now arrive at is a simple one; your profitability relies on a few factors:

  • Value your customers place on your products/services
  • Prices you charge for to deliver those products/services
  • Cost of creating those products/services

When you strengthen the value you deliver to your customers, they, in turn, will put their belief in your business. It will help you solidify your position in the market.

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