Business Process Outsourcing is the process of outsourcing the operations and responsibilities of specific business processes to a third party service provider. Services that are most likely to be outsourced are those not labeled as core business functions.
Outsourcing is a management process in the globalized business context that has been well understood, tried and tested by successful organizations across the globe. The advancements in Information Technology has led to this industry growing faster than ever with the reduction in costs combined with the ability to have services provided from remote locations overseas.
What Services are Being Outsourced?
BPO outsourcing services primarily include back office operations. In the past outsourcing was limited to inbound and/or outbound voice type services. Inbound services dealt with customer service and technical support while outbound services usually included sales and billing services. Businesses are now confident in expanding their scope of services they are willing to outsource. Here are the top 10 BPO outsourcing services for 2018:
- Web Design – 71% of companies outsource web development projects including Apple inc. and it has resulted in higher profits.
- Software Development – 56% of startups have outsourced software development to an external partner as a way to handle their capacity issues.
- Telemarketing – Pay per lead is gaining huge popularity with the opportunity to gain qualified leads with little risks.
- Customer Service – It is expected that every company provides 24/7 customer service in 2018 which can be extremely costly having to cover midnight hours and overtime of in-house employees.
- Virtual Assistance – There are an estimated 3.9 million virtual secretaries and administrative assistance around the world.
- Bookkeeping / Accounting – Offshoring finance and accounting services comprases about 10% of the $980 billion BPO market and is expected increase 70% by the year 2020. Taxation and financial statement preparation are the most common processes to be outsourced.
- Data Entry – According to market trends, businesses like e-commerce, legal, online retail portals and manufacturing mostly outsource their data entry tasks because of excessive and bulk range of data that needs to be processed, managed and represented as per organization protocols as well as understanding.
- Medical Billing – 49 percent of hospital chief financial officers acknowledge that outsourcing (including overseas outsourcing) in organizational claim processing will become an increasingly viable alternative as 2018 progresses.
- Digital Marketing – In 2017, 68% of agencies outsourced SEO to a white label SEO provider, 62% outsourced content marketing services and 48% outsourced pay per click marketing.
- Human Resources – According to Global Industry Analysts, the BPO market for outsourcing HR services is expected to reach $54 billion by 2020.
Businesses continue to see that finding talent is not only difficult but also costly. By hiring a BPO outsourcing services the company is not hiring an employee but hiring a third party to complete a process. Doing so greatly increases productivity, reduces costs and just overall improves their business processes.
BPO outsourcing companies in the Philippines enable businesses around the world to improve their customer satisfaction rating and gain that competitive edge over their competition. Cost effective, trustworthy, fully competent and transparent are just some of the qualities that are used to describe the Philippine’s outsourcing industry.
Once you combine those characteristics along with the fact that the country continues to stay current with trends in technology, according to Tholons Service Globalization the Philippines is in the top 10 for offering digital services; it is no surprise the worldwide popularity being gained by BPO outsourcing companies in the Philippines.
There are plenty of studies ranking the Philippines as being first in client satisfaction when combining cost with performance. Here are some key attributes that give Filipinos the edge when it comes to the BPO industry:
- Quality Service. Filipinos are very welcoming when it comes to helping others. They love to communicate with other people and give their undivided attention when speaking to a customer. Thanks to this great culture and positive attitude it makes customer service come as second nature to them.
- Communication Skills. Language and culture are probably some of the biggest factors why companies choose to outsource to the Philippines. English is the language used by teachers in school and the country currently has a 92.6 percent literacy rate which makes it one of the largest English speaking countries in the world.
- Labor Costs. Filipino salaries are significantly less than those of other countries due to the low cost of living in the country. Even with the low salary the quality of service is still on par compared to companies in-house employees. When using BPO outsourcing companies in the Philippines businesses get to have their cake and eat it too.
Businesses around the world have more choices than ever when it comes to getting a specific service accomplished through outsourcing. The Philippines continues to be in the top 3 for most categories important to choosing an outsourcing destination.
The BPO industry in the Philippines was responsible for $25 billion in revenue or 10% of their economic ouput in the year 2017 and is expected to increase to covering 15% of the total global outsourcing market by the end of 2018.
Highly skilled, service-oriented, educated and English speaking workforce is creating confidence and giving the opportunity for more businesses around the world to connect with BPO outsourcing companies in the Philippines.
Keeping your finances in check is one of the most important parts of running your
Australian business. Bookkeeping is a tedious task that no business owner or manager should have to get involved with since it is so time consuming and I guarantee you have a million other things your plate.
Save yourself the time and agony of all the fine detail tracking and recording. Focus on the bottom line! Small businesses throughout Australia have had great success using outsourcing services for their bookkeeping. Saving time is just the beginning to the list of benefits you experience when you outsource bookkeeping services.
Secures Financial Data
When you outsource bookkeeping services and other financial processes you reduce the risk of fraud in your business. You need to ensure segregation of duties and privacy when dealing with the businesses finances. No better way of accomplishing that for your Australian business than to hire an outsourcing company located overseas to handle bookkeeping for you. BPO companies are experts when it comes to protecting your company’s most sensitive asset and are constantly upgrading their security measures to stay ahead of the game. It is both morally and legally the responsibility of your third party bookkeeping service to keep your data secure.
Most small businesses and startup companies have limited resources so their bookkeeping tasks fall to either someone that has little training and experience or has a much larger role in the company. Let’s face it, creating business strategies and closing deals take priority. With that, bookkeeping processes get mismanaged and placed on the back-burner. Hiring a bookkeeping service that specializes in Australian accounting will ensure all financial reporting is on time and 100% accurate. Outsourced bookkeepers are completely certified and attend continuous improvement training classes to ensure they are up to date with the latest trends in accounting.
Outsourcing bookkeeping services is a no-brainer when it comes to cutting costs in Australia. In-house bookkeepers usually have a base salary of about $50-70K before any overhead costs. Add that extra 25% to factor in benefits, taxes, facility cost, etc., and you are at about $75K for bookkeeping. With outsourcing there are is no overhead costs, you pay a monthly flat rate (around $1000) which covers all bookkeeping needs. Add it all up and you save more than 75% when you outsource bookkeeping. Don’t forget the training and management costs you are cutting by using a bookkeeping service that handles Australian businesses.
Bookkeeping will always be one of those important administrative tasks that nobody likes to do. Bookkeepers employed by overseas BPO companies are experts at this stressful, number crunching, time-consuming process. Using an outsourcing company is the most efficient way of handling your bookkeeping processes in Australia. Keep your finances up to date with little cost and no effort by hiring a third party bookkeeping service.
Small business owners in Australia are often overwhelmed with the many things critical to growing their business. Managing marketing strategies, employees and social media accounts is proof enough that there are not enough hours in a day. Accounting is often an overlooked task that is taking away more time than realized from managing the important things that directly lead to gaining an edge on the competition in Australia. With that being said, there are multiple benefits for using outsourced accounting services that specialize in handling companies based out of Australia.
Increased Energy and Focus
By outsourcing accounting services, businesses will be able to dedicate more of their employees and resources to their core mission. Small businesses in Australia especially benefit from this since they are often limited on resources compared to the bigger companies. Back office functions like bookkeeping and accounting can become a distraction to the in-house staff. Outsourcing these financial tasks will allow entrepreneurs to maintain energy and focus on developing new ideas and better ways to do business.
Proven Expertise & Quality Assured
Accounting services are handled by trained professionals hired by outsourcing companies in Australia to only focus on financial functions. It is not uncommon for small to midsize companies to assign the bookkeeping and accounting tasks to employees that have other primary duties. This lack of proper training and focus leads to errors and miscalculations in companies finances. Outsourced accounting providers use teams of professionals to ensure double checking of all accounting work accomplished. Outsourcing accounting services in Australia increases the quality and accuracy of the work.
Businesses are able to cut the costs of their accounting services up to 50% by using an outsource service provider compared to hiring in-house accountants. Here is a quick breakdown on where the savings come from:
- Operational Costs – Training for the employees, purchases of hardware and software, software licenses, system administration, HR services and management.
- Employee Costs – Not only does this include salary, social assistance contributions and recruitment but also the costs of compensated vacations and absences.
- Infrastructure Costs – The most obvious is the space provided for the accountants and bookkeepers to work but also includes office supplies, equipment and storage space for documents rather it be paper or virtual.
Outsourcing these financial functions allows Australian companies to pay on monthly flat rate without worrying about the additional costs. In addition, the flat rate streamlines budgeting and simplifies cost control procedures.
Small to midsize businesses are continuously changing, ramping up at times while throttling back at other times depending on business flow. Accounting services must be able to adjust to these changes which could be quite difficult with in-house accountants. Companies using a third party accounting provider simply get in touch with them and explain their new requirements. No need of recruiting or laying off staff. Outsourcing gives Australian business owners the ability to leverage financial professionals when they’re needed and only for how long they are needed without paying any additional time.
As the stock market appears to being bouncing back from its worst single day drop in years it is important to identify the reasons for the long overdue market pullback. The recent surge in the US economy along with the lowest unemployment rate in 17 years has many experts worrying about inflation. Let’s take a look at three other key factors contributing to this week’s wild ride in the stock market.
1. Sell-off Started from the Jobs Report. The labor department released their monthly jobs report last Friday on how many jobs were created in January 2018. 200,000 jobs were created with an increase in wages of 2.9% making it the biggest jump since 2009. How can that be a negative? Well on wall street they figure if you pay workers more than it has to lower profits.
2. New Chair of the Federal Reserve. Jerome H. Powell took over as leader of the federal reserve on Monday. Investors are uncertain if the new leader will follow in Janet L. Yellen’s of keeping interest rates low with extremely subtle increases. Nobody knows Powell’s strategy to keeping inflation in check. Will he mess it up?
3. Wall Street was Due to Come Back to Earth. On average the stock market gains somewhere around 8 percent a year. From January 2017 to January 2018 the stock market increased by 26 percent, almost 3 times more than the average. Investors knew stocks should not really be at these high of levels.
As alarming as the dip might seem it is not a true correction. A correction is when the market suffers a 10 percent drop from its peak. On Monday the market was about 8.5 percent lower than its January 26th peak. There have only been four official corrections since 2009 so people should not be predicting the worst just yet.
Consumers and companies are currently on the trend of spending money and it doesn’t seem to be slowing down in 2018. The stock market is not the economy though so don’t expect this downturn to be pointed at some bad economic news. Too much good news is the most likely cause of the dip.
The bottom line is that Wall street is mostly worried about inflation. When the costs of everything continues to rise and rise then people can lose faith in the value of money. In the most extreme example of too much inflation is the currency turns meaningless and the economy collapses.
Investors are not worried about the economy collapsing but with the latest taxes cuts and jobs report they fear the currency value could take a slight dip. The strong economy should offset the inflation scare and the stock market will recover and continue to rise. Just don’t expect the 26 percent increase of last year.