As major corporations continue to expand their use of business process outsourcing (BPO), now is a good time to review whether outsourcing is a good fit for your organization and how to successfully leverage a BPO investment.

BPO allows a company to focus on its core business while leveraging third-party experts for non-core func-tions. Sometimes, that occurs overseas, but most BPO occurs domestically—meaning that most BPO spending is cycled back through the domestic economy. Key functions that are most often outsourced include IT and fi-nance and accounting, but BPO can also be used for a wide variety of other activities, such as human resources, business analytics, sourcing and procurement, marketing operations, logistics, and supply chain functions, to name a few.

Organizations that use BPO typi-cally do so for one of four main reasons:

Reduce Costs. Simply put, many organizations may be able to oper-ate certain functions at a lower cost through BPO than through internal operation. Using a third party can provide a predictable, transparent cost structure and allow for scalable resources. This can also free up capital for higher priority projects or new opportunities.

Create Operational F lexibil-ity. Outsource providers often have more flexibility to respond and scale to operational needs than internal resources. When evaluating potential internal vs. BPO alternatives, be sure to look at factors such as internal systems functionality and flexibility, cost of labor, competitive responsive-ness, scalability and expected impact on the customer experience. Also, de-pending on the BPO provider selected, outsourcing can help an organization to increase its supplier diversity profile.

Avoid Resource Constraints. Select-ing a BPO provider can help an organi-zation to avoid in-t e r n a l r e s o u r c e constraints—such as availability, scalability, staffing is-sues, geographical disadvantages, and lack of native expertise. At the same time, BPO allows an organi zation to

Fives Steps to making the most out of your BPO Investment•Ensure that you have clearly defined goals about what you hope to achieve via BPO.•Determine whether your BPO initiative is transactional, transitional, or transformative.•Evaluate BPO alternatives based on factors like experience, scale, financial stability, and

cultural fit.•Ensure that your BPO provider uses a defined approach to designing and deploying solutions.•Measure your results continuously and proactively identify improvement opportunities

benchmark best practices and choose from top industry experts in a given field.

Focus on the Core Business. Ulti-mately, BPO allows organizations to focus on that which is most essential to the enterprise; and to prioritize human and financial resources ac-cordingly. Just as companies routinely leverage outside legal, marketing and

accounting resourc-es, so too, can they benefit f rom out-sourcing other key operational functions in order to focus on what they do best.

So what are the key ways to le-

verage BPO for the best results? First, understand the dif-

ferent types of BPO:

TransactionalTransactional outsourcing consists

(con tin ued)

of quickly deployable services that allow organizations to focus on their core business. These can be either one-time or ongoing services, usually available from a number of potential providers. Examples include market-ing operations (such as rebate and reward fulfillment), sourcing and supplier management, or IT recruiting and staffing.

TransitionalTransitional BPO includes inter-

mediate, time-fixed solutions that drive changes in process, structure, technology or resources. Marketing services is a common example—as most large companies have experience hiring outside creative agencies. Other examples include inventory and facili-ties management, forward and reverse logistics, business intelligence, and marketing analytics.

TransformativeTransformative BPO solutions

are the game-changers. They involve longer-term improvements that reduce cost and create value based on a collaborative effort to optimize the business process. Typically, they involve not just operations, but also research and analysis that identi-fies improvement opportunities and drive efficiencies. An example might include a packaging audit process that optimizes usage and drives new best practices or a print management so-lution that streamlines execution and creates significant cost savings.

Thinking about BPO across these dimensions can help your organi-zation understand its outsourcing goals and best evaluate internal vs. BPO alternatives. Once you’ve made the decision to explore BPO for a specific activity, the next step is to select resources that can deliver the

best value for your organization. It’s important to evaluate resources based on factors such as experience level, scale, financial stability, cul-tural fit and ability to drive desired results. ◆

Paul Richardson is the director of brand and business development at Group O (www.groupo.com). Recognized as a top f ive Latino-owned business by the

Taking BPO to the Next LevelGroup O is a business process outsourcing provider that helps its brand-name

roster of clients optimize performance through strategic marketing, supply chain, packaging and business analytic solutions. Through years of working side-by-side with Fortune 100 companies across a variety of industries, we’ve perfected a proven, holistic approach to deploying new BPO solutions across each of these dimensions. Known as our O-Sourcing™ Solution Delivery Methodology (SDM),

it helps ensure fast, reliable launches and effi cient, effective ongoing operations.

The O-Sourcing SDM is centered on client needs and goals—and delivers a client-specifi c solution blueprint to simplify, streamline, and opti-mize operations. Key elements of the SDM include a set of estab lished solution deliver-ables. These include a tailored combination of people resourc-es, best practice processes, technology tools, facilities and infrastructure, fi nancial management, and reporting dashboards, a discover-design-

deliver-optimize lifecycle. This ensures that solutions are based on documented client requirements and an Operational Playbook for each program. Once BPO services are implemented, results are continually measured to ensure that key performance indicators (KPIs) are achieved and improvement opportunities are identifi ed.

We use a defi ned solution governance approach. This includes documented practices for communications, escalation paths, results management, change management, risk mitigation and customer satisfaction. Additionally, we have core program and project management elements. These ensure that each solu-tion has a robust, defi ned approach to establishing deliverables and execution expectations throughout the solution lifecycle and across the entire solution ecosystem.

Once your BPO solution is implemented, Group O helps you make sure that the results are matching expectations and service level agreements (SLAs) by providing our clients with easy-to-view reporting dashboards, for example, which provide fi ngertip access to essential program information.

USHCC and a Corporate Plus member of the National Mi-nority Supplier Development Council. Group O is headquar-tered in Milan,

Illi nois.

Reprinted with permission from the September/October 2013 issue ofMinority Business Entrepreneur

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