BPO or Outsourcing

There is a difference between BPO and Outsourcing, although the line between them is thin, the definition is clear.  BPO stands for business process outsourcing where the core business is outsourced to a business process service provider. In the case of outsourcing as we understand noncore business processes are outsourced. BPO always deals with core functions. Thus in this case the businesses remain involved with the core functions that the BPO is handling. The BPO is always outsourced internationally. 

In the case of outsourcing noncore functions, there is an arrangement with the provider whereby sharing of data, MIS, and communication takes place. Thus the sharing is limited but impactful. In the case of BPO, manufacturing process, equipment and technology may be transferred. There may be regular supervision of services or the quality of finished products. 

Both services have the same purpose. They facilitate companies to delegate processes that may be proving stressful to their limited resources or they can afford to approach a service provider and get the load off for certain gains.  

The main Benefits of these processes are:

• ·         Cost Reduction
• ·         Stress Reduction
• ·         Expertise Gain
• ·         Enhanced Efficiency
• ·         Increased Production
• ·         Seasonal Production Enhancement
• ·         Risk Reduction
• ·         Doing Away with Statutory Compliance

Payroll Management Types

• ·         In House
• ·         CPA Managed
• ·         Bookkeepers Managed
• ·         Agency Managed
• ·         Software Managed

Although the picture appears eternally rosy there are associated risks and failure. Hence company CEOs and managers take cautious steps before finalizing the contract. There is always less chance of risk or failure for those enterprises who have been doing it for years or at least for some time. The reason is trust, acclimatization with the process, and time-tested service.

For new concerns seeking outsourcing of noncore services or BPO, the risk is dependency, loss of control, frequent quality issues, and other hindrances like improper communication and even disputes. The matter can go to court and linger for years. Many functions can be handed over to service providers and payroll or employee management is one of them. 

Outsourcing Payroll Management Service

For most companies, payroll management or employee management is a non-core function. It can prove costly to manage within an organization or take a heavy toll on the staff or stress other resources. While some companies use software applications like Shine HRMS for automation others prefer to hand over the task to service providers.

The future for services in payroll management for companies that outsource is bright. The market size for the year 2021 is 9.9 billion dollars. It is growing at a rate of 7.2% and is expected to reach over 19 billion dollars by the year 2031. The pandemic played a major role in outsourcing payroll management to service providers. This happened with work from home concept due to the need to keep away from the office. The growth in the last five years has been over 15% CAGR in India.        

As the business paradigm experiences a change outsourcing services are becoming common. While a significant number of companies are resorting to managing employees using software like Shine HRMS many approaches the agencies. Agency-managed service providers are quite common in India.