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The 3 Main Advantages of Business Process Outsourcing

As new and innovative services become more available in today's ever-changing, highly competitive business climate, many businesses, from small startups to large corporations, choose to outsource processes.

Business process outsourcing, also known as information technology-enabled services, is a business practice in which a company hires an outside service provider to perform a critical business function or task. This method of outsourcing relies on technology/infrastructure to enable external companies to perform their roles efficiently.

Companies normally outsource one or more information technology-intensive business processes to an external provider, who then owns, administers, and manages the selected processes based on defined and measurable performance metrics. Business process outsourcing offerings are classified into horizontal offerings (those that can be used across multiple industries like information technology and human resource departments) and vertical-specific offerings (those that demand specific industry vertical process knowledge).

With many capable outsourcing options available today, businesses should have no trouble locating and collaborating with one that best meets their specific outsourcing requirements. In general, businesses use business process outsourcing to outsource their core business support operations such as accounting, payment processing, information technology services, human resources, regulatory compliance, and quality assurance to outside professionals.

What are the advantages of business process outsourcing?

The primary benefit is that it reduces costs.

Internally, performing a specific job function costs a certain amount of money. Outsourcing this job to an external party can reduce these costs by lowering the overall cost of performing that job function. These may lead to a further decrease in income taxes and lower labour costs as viable cost-cutting measures. Companies can eliminate the need for in-house human resource management by outsourcing human resource services. This reduces payroll costs as well as funds spent on staff training. Thus, business process outsourcing providers (bpo company) can frequently lower the cost of a business process or save the company money in many ways.

It is costly to hire and train full-time skilled workers, especially for short-term projects. Outsourcing converts fixed labour costs into variable costs, which means you only pay for the services you use. This gives you staffing flexibility that in-house employees do not have.

Outsourcing allows you to tailor your service consumption to your specific requirements. You only pay for what you use and can seamlessly scale your consumption as your business grows or shrinks. For example, if your annual revenue is less than RM1 million, you probably don't need a full-time in-house accountant. It's a vital job that can't be overlooked, but you don't have enough work to warrant a full-time salary. Hiring a virtual accountant allows you to pay only for the services you use while maintaining the dependability of a dedicated employee.

Secondly, in terms of human resource management, outsourcing human resource activities allows employees to focus on more critical tasks while avoiding over-exhaustion.

Business process outsourcing companies (bpo companies) have dedicated human resource professionals who can handle tasks efficiently. In-house human resource teams are sometimes required to manage more work than they are capable of handling in a given time frame. The issue with human resources is that the scope of work is frequently undefined. Employees are overworked as a result of having to manage too many things in addition to their core human resource work. Business process outsourcing also provides companies with the advantages of timely and accurate reporting, increased productivity, and the ability to quickly reassign resources when necessary. Maintaining good employee relations is critical in any business, but it can be time-consuming for business owners and leaders. Business process outsourcing will be available to assist you with employee relations and will be able to provide efficient and professional new hire orientation. Employee training should be done on a regular basis for both new and existing employees who want to grow personally and professionally. Business process outsourcing services cover everything from supervisory training to harassment/discrimination prevention, medical or personal leave, and performance management.

Thirdly, business process outsourcing allows a company to focus on core business functions that are critical to its success rather than administrative tasks or other non-critical aspects of running a business.

Business process outsourcing also contributes to growth, particularly in global expansion. If a company wants to open an overseas branch or operate in another country, working with a business process outsourcing company that has experience in the local industry and speaks the language is extremely beneficial.

A company will typically contract with another company for such services after identifying a process that, while necessary for its operations, is not part of its core value proposition. This step necessitates a thorough understanding of the organisation's processes as well as strong business process management.

Many processes such as Manpower outsourcing, information technology infrastructure outsourcing, onsite support, help desk support and recruitment do not generally distinguish one organisation from another, enterprise executives frequently determine that having their own staff perform them adds little value. Business process outsourcing providers offer better quality and performance because they are well-positioned to complete work (such as the ones listed in above) with greater accuracy, efficiency, and speed as business processes are their core business. With enhanced competitive advantage, business process outsourcing providers allow a company to focus more of its resources on operations that set it apart in the marketplace.

Now, many organisations consider manpower outsourcing and information technology infrastructure outsourcing to be good tasks for business process outsourcing because they are performed the same or similarly from company to company.

Human resources business process outsourcing is an excellent way for organisations of all sizes to cut costs while increasing operational efficiency. It allows you to focus on core competencies without jeopardising equally important human resource activities.


Business process outsourcing provides businesses with access to innovative technological resources that they might not otherwise have. With so many capable bpo companies in Malaysia available today, businesses should have no trouble locating and collaborating with outsourcing companies in Malaysia that best meets their specific outsourcing requirements.

As a manpower outsourcing company, Xetron Solutions constantly strives to improve our processes by implementing cutting-edge technologies and practices. Looking for Manpower supply Malaysia? Click this link to register your interest.



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