What does the creation of the BPO imply?

businessman with a folder

Starting a business process outsourcing (BPO) company involves choosing a specialty, establishing expertise, and implementing a system to deliver outstanding performance. Functionally, the process involves many of the same tasks as setting up any service-oriented business. However, if the BPO intends to operate in a foreign country, it will have to navigate the regulatory environment there, as well as the owner’s country of origin.

The BPO setup largely depends on whether the business owner wants to provide a service nearby or abroad. In close outsourcing, both the business client and the BPO provider are located in the same country. For example, a US company may outsource payroll processing to another US company. In offshore outsourcing, the business client is in one country and the BPO operation is established in another country, although the BPO provider also operates in the client’s country. For example, a UK business might outsource its telephone customer service to a call center in India.

In either case, a potential BPO provider develops a plan and obtains financing. Operationally, the owner registers the business with the appropriate government agency, secures a place to run the business, hires and trains workers, and purchases equipment and other resources to make the system work. However, this basic BPO setup becomes much more complicated if the owner wishes to set up an operation abroad. An offshore BPO setup must comply with the regulatory environment of the host country, registering and setting up operations there. Locally owned BPOs in host countries need to do the opposite and learn to operate and recruit clients in countries like the US and UK.

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The unique parts of the BPO setup relate to expertise, experience, and excellence. First, a business owner must determine which business process to target. Some areas of BPO are saturated with providers, while others are still in their infancy. Second, the business owner must be a recognized expert in the selected specialty. Participating in trade groups and writing articles for publication will establish the owner’s business acumen with the target process.

Finally, the new BPO provider must have a service delivery system that guarantees excellent performance without excuses. This system is a company product and needs to be designed and packaged before ordering from customers. If setting up a BPO seems complicated or if the owner doesn’t have the necessary experience in an offshore country to set up operations, you can hire a consultant or facilitator who specializes in starting new BPO businesses to ease the way.

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