Business process outsourcing has been on the rise in recent years, and as businesses become more complex and customers become more selective, it’s easy to understand why.
By outsourcing non-core business functions, such as customer service, sales, back-office, and IT, companies can reduce operational costs and be better positioned to scale up or down in response to market demands. Outsourcing also allows businesses to focus on their core competencies while leveraging the expertise of outsourcing partners to improve other critical areas.
However, finding the right BPO that fits your company culture and meets or exceeds your business objectives can take time and effort. It all starts with putting together an RFP—a request for a proposal from service providers that outlines key strengths and strategies for meeting your specified project goals.
Understanding the Basics of a BPO
First, it’s essential to have a firm understanding of business process outsourcing (BPO), a strategy that entails having a third-party service provider complete non-core business processes. There are several types of BPO to choose from based on the services you need and the objectives you want to prioritize:
- Back Office Outsourcing—These internal functions don’t involve direct interaction with the customer. Examples include data entry, accounting, finance, human resources, IT, and other administrative tasks. Back-office outsourcing helps companies streamline their internal workflow and reduce overhead costs.
- Front Office Outsourcing—These activities involve customer interaction, such as telemarketing, customer support, technical support, and sales. Front-office outsourcing is often used to improve the customer experience and increase sales revenue.
- Onshore/Domestic Outsourcing—Companies work with a service provider in the same country. Being close to your BPO can enhance communication, quality control, and overall synergy.
- Nearshore Outsourcing—Companies contract with service providers in neighboring or nearby countries. This strategy can provide cost savings and reduce some communication barriers associated with offshore outsourcing, while remaining time and cost-effective for onsite visits with key leadership to build stronger teams and relationships.
- Offshore Outsourcing—Companies work with vendors in a foreign country, often overseas and in a different time zone. The major advantage of offshore outsourcing is cost savings, but the challenges associated with different time zones, language barriers, ease of access, and cultural differences can be substantial.”
Understanding the different BPO options available and their advantages and disadvantages can help you be more discerning as you craft your RFP and distribute it to selected vendors.
Defining Your Objectives
It’s crucial to define your goals and expectations for a BPO. Do you want to cut operating costs? Enhance scalability? Improve service quality and customer satisfaction? Upgrade technology? Or maybe you’re hoping to access vertical-specific expertise or specialized knowledge to grow in critical areas.
Identifying Key Requirements
Once you’ve identified overall objectives, you need to identify the key requirements for the BPO. These requirements provide more information about a specific project and conditions that must be met. Some examples of crucial requirements include
- The specific processes or tasks that will be outsourced
- Key performance indicators
- Compliance or security standards
- Technological requirements to work within your existing infrastructure, or a tech stack of their own that can support your needs
These requirements will allow BPOs to tailor their proposals to showcase their strengths while ensuring they meet your needs.
Creating a Comprehensive RFP Document
The RFP document should be comprehensive and well-organized so that it’s clear and easy to follow. Key sections of an RFP include:
- Introduction. Provide an overview of your organization and the overall purpose of the RFP.
- Scope of the Work. Clearly define the services, processes, and specific tasks that you want to outsource.
- Requirements. List all the conditions the BPO must meet, including quality standards and technical specifications.
- Evaluation criteria. Explain how you will evaluate the proposal. What types of information or characteristics will you prioritize?
- Timeline. Identify key project milestones and timelines from RFP release through project launch
- Submission instructions. Explain how and where BPOs should submit their proposals.
Researching Potential BPO Providers
It’s helpful to research potential BPO providers before you distribute the RFP. This allows you to narrow the number of proposals you receive and ensure you aren’t wasting time on providers who don’t align with your needs and values. In addition to the information listed above about the different types of providers, some other things to consider include:
- Industry reputation and experience
- Client testimonials references
- Case studies that demonstrate their capabilities
- Areas of expertise
- The organizational culture and values
Distributing the RFP
Along with your research that will help identify your short list of potential BPO partners, confirm the name and contact information of the person who should receive your RFP at each BPO, usually in the sales or client development departments.
When you distribute the RFP, set a reasonable deadline for proposal submissions—typically 4-6 weeks, depending on the project’s complexity. You might also consider providing each BPO with a way to contact you if they have questions while putting their proposal together.
An Investment In Your Future
Requesting a proposal from a BPO provider is a fundamental step in finding the right outsourcing partner to help you meet your business goals. Of course, you’ll also want to thoroughly evaluate each proposal and take the time to interview and negotiate with the BPOs that rise to the top.
What’s more, once you begin working with a BPO, the goals and expectations you outline in the RFP will be used again and again to evaluate your progress and finetune your business relationship. Developing a detailed and thoughtful RFP takes time and effort, but the potential rewards are well worth the investment.