Does the business world really need another TLA? Three Letter Acronyms have been plaguing, er, helping us for about 40 years as they began to show up in the late 1970s. They actually started to be recognized, and expand greatly in usage, in the early 1980s. Most TLAs aren’t truly TLAs, as they aren’t acronyms (such as “CAT” scan). They are actually “initialisms,” however, that is a different blog post.
BPO is Business Process Outsourcing. Simply put, it refers to taking repetitive processes and determining how they can be outsourced. An example is tracking shipments. If your company ships products to customers through multiple carriers, there might not be a simple way to provide a link on your website for your customer to track their order. Tracking each shipment and updating a website might be best handled manually. An easy question to ask yourself is whether you can thoroughly document the process. Most processes can be documented well. If you can’t, then how would you train a new employee to pick up the process?
A classic example where BPO brings significant value is in Accounts Payable. When a business purchases anything from vendors, approximately 85-90% of invoices for those purchases are sent electronically. Those invoices need to be entered into an ERP system — another TLA! Invoices need to be entered into an Enterprise Resource Planning or simple bookkeeping system such as QuickBooks. Some businesses utilize OCR – ha! – or Optical Character Recognition, to enter the remaining invoices that aren’t sent electronically. While this computer-based process can be quite effective, it is never perfect and requires validation to ensure that the computer read the information correctly. That validation is completed by a person.
Whether invoices are entered manually or via OCR, the process requires human interaction. This is a process that can easily be documented and then completed by anyone who is capable, current employee or not.
How does Business Process Optimization effect control over the process?
Some believe there are advantages to having these tasks completed by employees. The thought is that there is more control over the process, in addition to confidentiality. Recent times have shown these concerns are not a challenge. It feels funny to say that there were any “silver linings” to the Coronavirus pandemic, however, there was at least one.
Employees have been asking, for as long as there has been an internet, to work from home. As our economy continues to transition to being service-based versus manufacturing-based (largely due to automation as well as the economy becoming more global), more employees sit in front of a computer and, often, use a phone all day long. Access for these tools has become nearly ubiquitous given the widespread availability of reliable internet access throughout the majority of the U.S., certainly throughout higher population areas.
The worldwide pandemic has vastly increased the number of employees working from home as employers fight to stem the tide of transmission of COVID-19 among their staff. Moving employees out of the office has proven to provide safety to them, resulting in less down time due to sick leave.
Other fears employers have traditionally held have not manifested with their newly found distributed workforce. Many employees are happier working from home saving time, energy and money in their commute. Productivity has not only not suffered but, in some instances, improved. There are less distractions from co-workers and less meetings, allowing employees to better focus. Another fear was a lack of collaboration, however, technology-based tools have addressed the need for collaboration very well. It has led to a nation of people wearing business attire above the waist — and sweatpants below!
Business Process Outsourcing generally leads to better control over the process in question. For BPO to be successful, an integral part of the transition is the creation of the SOP – one more TLA! The SOP is a document outlining the Standard Operating Procedure for the process in question. The document typically goes through a few iterations resulting in a locked-down procedure. The BPO provider then plugs their employees into the role of completing the process by following the SOP, which results in no freelancing on accomplishing the task at hand.
There are wide range of reasons as to why using a provider of Business Process Outsourcing makes sense. Look for that information – and more – in additional blogs from Process-Smart.