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by Mary Salgado

Updated:

Apr 24, 2023

What Is the Difference Between BPO and Call Center: Understanding the Key Differences and Advantages

Call centers have long been an essential part of customer support for businesses of all sizes and industries. A call center is a centralized office where agents receive and make phone calls to provide a customer relations service or conduct telemarketing activities on behalf of a company. While call centers have traditionally focused on handling customer inquiries and resolving issues, over the years, they've evolved to include additional services such as order and payment processing, appointment scheduling, and technical support.

In this article, our call center experts at Hit Rate Solutions will explore the key differences between BPO call centers and traditional call centers while exploring the advantages of BPO call centers and how businesses can choose between the two options. We'll also discuss the future of BPO call centers and what that means for business success for businesses of all sizes and industries.

Defining BPO: The Basics of Business Process Outsourcing

BPO call centers have become increasingly popular in recent years as businesses seek to streamline their operations and reduce costs. BPO, or Business Process Outsourcing, involves outsourcing non-core business functions to third-party providers. Unlike traditional call centers, BPO call centers offer a wider range of services, including back-office operations, data entry, accounting, and customer support. By outsourcing these functions, businesses can focus on their core competencies while enjoying the benefits of a more streamlined and efficient operation.

But where did this outsourcing business model begin? The roots of BPO can be traced back to the manufacturing industry, where outsourcing non-core functions was first adopted to reduce costs and improve efficiency. Today, businesses across industries have adopted BPO to achieve these same benefits. By outsourcing functions like customer support and data entry, businesses can lower their overhead costs and improve operational efficiency. BPO also allows businesses to access specialized expertise and technology that may not be available in-house, leading to greater innovation and growth.

Business Process Outsourcing vs Call Centers: Understanding the Key Differences

BPO vs Call Centers

To better understand the advantages of the BPO industry over call centers, it's important to first examine the key differences between the BPO market and traditional call centers.

A traditional call center typically provides one or more of the following services:

  • Inbound customer service: Agents receive calls from customers and help resolve their issues, answer questions, or provide information.
  • Outbound telemarketing: Agents make calls to customers to promote products or services, conduct surveys, or gather information.
  • Order processing: Agents receive orders from customers and process them accordingly.
  • Technical support: Agents provide assistance with technical issues related to products or services.

BPO call centers (onshore and offshore), on the other, offer a much broader range of services, which may include the following horizontal offerings:

  • Inbound customer service: As with traditional call centers, agents receive calls from customers and help resolve their issues, answer questions, or provide information.
  • Outbound telemarketing: BPO call centers may offer outbound telemarketing services, but they may also offer more specialized services, such as lead generation or appointment setting.
  • Back-office operations: BPO call centers can handle a variety of back-office operations, such as data entry, document processing, and accounting services.
  • Technical support: In addition to providing technical support for products or services, BPO call centers may also offer IT support and maintenance services.

One of the main advantages of BPO call centers is that they can provide a more comprehensive solution to businesses' needs. Rather than outsourcing every business function to multiple providers, businesses can consolidate their outsourcing needs to a single, BPO provider or call center, which can handle all their non-core business functions. Doing so results in increased efficiency, more seamless communication, and overall cost savings.

Another competitive advantage of BPO call centers is scalability. Traditional call centers are typically limited in terms of the number of agents they can employ, which can make it difficult for businesses to handle large volumes of calls during peak periods. BPO call centers, on the other hand, can easily scale their operations up or down as needed to meet changing business needs.

Now let's explore the advantages of BPO call centers in more detail.

Benefits of BPO Call Centers: A Closer Look

Outbound telemarketing

BPO call centers offer small businesses several advantages over traditional call centers, including increased efficiency, scalability, and cost savings. Here are some of the key benefits and hidden costs of using a BPO call center for your business:

Increased Efficiency

By outsourcing non-core back and front office functions to an external provider through a BPO call center, businesses can focus their human resources on their core competencies and improve overall efficiency. BPOs are typically staffed by highly trained agents who are experienced in handling a wide range of customer service and back-office tasks. This expertise can help ensure that customer inquiries are resolved quickly and efficiently, leading to reduced costs and higher levels of customer satisfaction.

Scalability

BPO can easily scale its operations up or down as needed to meet changing business needs. This scalability allows businesses to handle large volumes of calls during peak periods without the need to hire additional staff. BPO can also quickly adjust its staffing levels to accommodate changes in call volume, which helps avoid the costs associated with overstaffing or understaffing.

Cost Savings

By outsourcing non-core functions to third-party vendors, businesses can reduce their operational costs. Business process outsourcing companies typically offer lower labor costs than traditional call centers. Additionally, using BPO third-line business process outsourcing companies can help avoid the costs associated with hiring and training new employees, as well as the costs of maintaining expensive call center infrastructure.

Access to a Broader Range of Services and Expertise

BPO companies offer a wider range of services than traditional call centers, which leads to an overall improvement in business operations. In addition to customer service, BPO call centers can handle a variety of back-office tasks for business, such as data entry, document processing, and accounting services. BPO call centers are also staffed by agents with a wide range of expertise, which improves the quality of their customer service and further supports business growth.

Next, we'll discuss how businesses allow potential customers to choose between BPO vendors and traditional call centers.

Choosing Between BPO and Call Centers

Business Process Outsourcing

When deciding between BPO providers and traditional call centers, there are several factors to consider, including cost, the scope of services, and scalability. Here are some things to keep in mind when making this decision:

Cost

BPO vendors can be a more cost-effective solution for businesses that are looking to outsource non-core functions. BPOs are typically located in countries with lower labor costs, which can help save money on operational costs. However, companies using domestic outsourcing should also consider other costs associated with that process, such as setup fees and ongoing management benefits administration costs.

Scope of Services

Business process outsourcing (BPO) companies provide a more extensive selection of services than traditional call centers, allowing for the consolidation of outsourcing needs with a single service provider. Nevertheless, before engaging a BPO company to perform business functions, businesses should carefully assess the scope of services offered by the external service provider to ensure it meets their specific needs.

Scalability

BPO offers greater scalability than traditional call centers and allows companies to handle fluctuations in call volume more effectively. However, it's important to ensure that the BPO call center they choose has the capacity to handle their current and future call volume needs.

Quality of Service

When choosing between BPO and traditional call centers, you'll need to carefully consider the quality of service provided by each option. BPOs are typically staffed by highly trained agents who are experienced in handling a full business process and outsourcing a wide range of customer service and back-office tasks. However, the BPO call center of choice should still be able to provide high-quality service that meets specific, business objectives, business processes, and needs.

Some businesses may find that a hybrid approach line to optimize business processes, using both BPO to outsource business functions and traditional call centers for back office functions, is the best option for their needs. For example, you may choose to outsource your customer service to a BPO company while handling your back-office tasks in-house. This approach can help you achieve the benefits of both options while minimizing the drawbacks.

Seeing some examples can help you visualize the benefits of BPO. In the next section, we'll explore case studies of business process outsourcing practices and examples of businesses and different companies that have made the switch to BPO from call centers.

Case Studies and Examples of Businesses That Have Made the Switch to BPO

BPO vendors

A significant number of manufacturing companies have transitioned to BPO and have experienced substantial improvements in their business processes. Below are examples of businesses that have successfully made the switch:

Airbnb

In 2017, Airbnb announced that it was partnering with a BPO company to handle its customer service needs. The business process outsourcing (BPO) call center was able to provide 24/7 support in multiple languages, which helped Airbnb improve the overall customer experience for its users.

Sprint

In 2016, Sprint announced that it was partnering with a BPO company to handle its customer service needs. The BPO call center was able to provide high-quality service at a lower cost than Sprint's in-house call center, which helped the company save money while improving customer satisfaction.

H&R Block

In 2018, H&R Block announced that it was partnering with a BPO company to handle its tax preparation services. The BPO call center was able to provide a wider range of services than H&R Block's in-house team, which helped the company expand its offerings and better serve its customers.

These case studies demonstrate the benefits of outsourcing non-core business functions and outgoing customer calls to a BPO call center. By partnering with a BPO call center, your business can improve overall efficiency, scalability, quality assurance, and cost savings while still providing high-quality service to your valued customers.

BPO Services Most Frequently Outsourced By Companies Around the World

what is bpo calling

Customer service BPO: Outsourcing customer service operations, such as managing customer inquiries, resolving issues, and providing support through various channels like phone, email, chat, or social media.

Technical support BPO: Outsourcing technical support operations, such as providing support for software or hardware products and services.

Back-office BPO: Outsourcing administrative tasks, such as data entry, accounting, document management, and human resources management.

Finance and accounting BPO: Outsourcing financial and accounting functions, such as bookkeeping, accounts payable, accounts receivable, and tax preparation.

Human resources BPO: Outsourcing human resources functions, such as recruiting, onboarding, payroll processing, and benefits administration.

Knowledge process outsourcing (KPO): Outsourcing high-level knowledge-based tasks, such as research and development, intellectual property management, and data analytics.

Legal process outsourcing (LPO): Outsourcing legal processes, such as document review, contract management, and litigation support.

Front-office BPO: Outsourcing customer-facing functions such as customer support, technical support, and sales and marketing. This type of BPO service typically involves interaction with customers through various channels such as phone, email, chat, or social media. Examples of front-office BPO services include managing customer inquiries, processing orders, resolving issues, providing technical support, and conducting sales and marketing campaigns.

Research and development (R&D) BPO: Outsourcing research and development activities, such as product development and innovation, to third-party providers.

BPO services can reduce costs, improve efficiency, and access specialized expertise while helping companies focus on their core competencies.

The Future of BPO

The business process outsourcing (BPO) call center industry and global expansion are expected to continue to grow in the coming years. As businesses look for ways to improve efficiency and reduce costs, outsourcing non-core functions to BPO is becoming an increasingly attractive option. Additionally, advances in technology, such as artificial intelligence and machine learning, are expected to play a significant role in the future of the business process outsourcing industry and call center industry evolution.

For example, AI-powered chatbots and virtual assistants can help automate many routine customer service tasks, freeing up human agents to handle more complex issues. Additionally, machine learning algorithms can help BPO companies and call centers better understand customer behavior and preferences, allowing them to provide more personalized service.

Conclusion

As you can see, BPO offers many advantages over traditional call centers, including increased efficiency, scalability, and cost savings. By outsourcing non-core functions to a BPO call center like Hit Rate Solutions, your business can focus on its core competencies while still providing high-quality service to their customers. When choosing between two options, we encourage you to consider factors such as cost, the scope of services, and scalability to determine which option is the best for your needs. With the continued growth of the BPO call center industry and the increasing use of technology, the future of customer support looks bright. If you're interested in learning more about this topic or how our team can help, please reach out to our team at Hit Rate Solutions today!

FAQ

Is outsourcing the same as BPO?

No, outsourcing refers to the practice of hiring a third-party company to perform a specific task or function, while BPO (Business Process Outsourcing) is a type of outsourcing that involves outsourcing entire business processes and functions to third-party providers. So while outsourcing can be a part of BPO, BPO is a more comprehensive and extensive form of outsourcing.

What is the difference between onshore outsourcing vs. offshore outsourcing vs. nearshore outsourcing?

Onshore outsourcing involves hiring a third-party service provider within the same country as the hiring company, while offshore outsourcing involves hiring a third-party service provider in a foreign country. Nearshore outsourcing is a variation of offshore outsourcing where the third-party service provider is located in a neighboring country, typically within the same region.

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