What is the difference between a call centre and a BPO organization?
A Business Process Outsourcing (BPO)
organisation is responsible for performing a process or a part of a process of
another business organisation; outsourcing is done to save on costs or gain in
productivity.
A call centre performs that part of a client's business which involves handling telephone calls. A call centre, for example, might handle customer complaints coming in over a telephone.
Thus, a call centre can be considered a BPO organisation. The converse is, however, not true because there exist BPO organisations, such as medical transcription agencies, which handle their business through websites, and do not process any telephone calls on behalf of their clients.
A call centre performs that part of a client's business which involves handling telephone calls. A call centre, for example, might handle customer complaints coming in over a telephone.
Thus, a call centre can be considered a BPO organisation. The converse is, however, not true because there exist BPO organisations, such as medical transcription agencies, which handle their business through websites, and do not process any telephone calls on behalf of their clients.
Key Difference: BPO
is the business that focuses on tasks, ranging from manufacturing products to
providing customer care. On the other hand, a call center is the subset of BPO
and mainly focuses on telephone calls.
BPO and call centers are often used
interchangeable, but in reality there is a profound difference. Let’s get a
brief knowledge on both the terms: BPO and call centers.
BPO, short for Business Processing
Outsourcing, is the business that focuses on tasks, ranging from manufacturing
products to providing customer care. It usually consists of the back office or
front office operations. It is a process where number of people are working for
a specific business.
It is originally associated with the firms'
production of goods for use or sale using labor and machines, tools, chemical
and biological processing, or formulation, such as Coca Cola that outsourced
large sections of its supply chain.
The trend started in the late
eighties when businesses sent parts of their processes to be completed in
foreign countries. It is helpful for those who are under-graduate or graduate
and are not able to be employed in any company.
If one has skill, he will
definitely be employed in a BPO. Nowadays, it has become a fashion or trend for
youngsters in some countries to work in BPOs just for time pass. Data entry,
call centers are some examples of BPO operations.
On the other hand, call center is the
subset of BPO. It is an office which mainly focuses on telephones calls. They
receive or transmit large amount of requests by telephone in which one side is
a receiver and the other side is a transmitter. Its purpose is to solve queries
of the customers related to the particular company, brand, etc.
In addition to a call center, a
company handling letter, fax, emails or some software is known as a contact
center. Its a workstation where all the employees or workers need a computer
and headsets through which they will be connected to the receiver calls and
will be able to answer them. The calls can be consisting of telemarketing,
survey generation, customer support, taking orders, and many other functions.
Thus, the call centers can be
considered as BPO organization, however, this is not true because there are
some BPO organizations which handle their businesses through websites, and they
do not need to process telephone calls on behalf of their clients.
The key differences are listed in the
table below:
BPO
|
Call Center
|
|
Actual Work
|
A BPO is responsible for performing
a process of another business organization.
|
A call center performs that part of
a client's business which involves handling telephone calls.
|
Requires
|
Good communication skills and
computer knowledge
|
Basic computer knowledge and
fluently speak in any language
|
Services
|
Higher services than call centers
|
Lower services than BPO
|
Performs
|
One or two business operations of
an overseas company
|
Work done over telephone lines
|
Redefining Business Process
Outsourcing
For many years, businesses have
approached business process outsourcing as a simple cost play - valuable, but
limited in impact. A more structured approach is now emerging that infuses key
business activities with technology levers to help organizations more precisely
manage rule-based tasks and continuously increase process effectiveness and
efficiency
When most companies think
about business process outsourcing (BPO), they rarely think about
process optimization. They reflexively engage in tactical thinking. Perhaps
it's a provider moving routine work offshore, taking over system management or
leveraging economies of scale in procurement.
These “better, faster, cheaper”
projects have their place in keeping the business trim – but they are
not transformative initiatives that help organizations thrive in
times of change. It's time for a wider definition of BPO.
Fortunately, BPO is becoming more
focused on process optimization. Known as business process services, or BPS,
this new approach marries the process and technology smarts of the latest
reengineering and algorithmic thinking with the domain smarts of the people who
run them.
It covers everything from simple task–based processes (such as
payment processing or document management), all the way up to the
knowledge–intensive, industry–specific processes that traditional BPO doesn't
usually touch.
With BPS, the initial cost savings
are dramatic, but the benefits go beyond the usual techniques of offshore labor
and technology automation to the introduction of better skills and industry
knowledge, new technology and re–engineered/optimized processes.
On the other
hand, core BPO may stop at initial cost savings, without any investment in
wholesale changes to the way activities things are done. In an accounting
engagement, for example, BPS can focus not just on continuous improvement, but
also on generating value through working capital management, reducing days
sales outstanding (DSO) and identifying possible fraud scenarios, among other
high priorities.
Quick Take: Transforming Accounts
Payable at a Strategic Level
To get an idea of how a BPS
initiative works, consider our engagement with Jewson, part of Saint–Gobain and
one of the world's most recognized construction industry companies. Over three
years, we transformed Jewson's accounts payable processes using a range of
approaches in concert: labor arbitrage, implementation of new technology
systems (such as call management tools, OCR systems and data entry tools) and
complete process realignment.
When business practices, technology
and customer needs are changing so rapidly, your success – even survival –
depends on making sure that your business is keeping pace. But since business
resources are limited, those companies that resolutely focus on what their
customers are demanding, continually innovating, are the ones that get ahead.
Anything that doesn't contribute to
your customer obsession is a candidate to be outsourced. To be certain of
quality delivery, you need to carefully select your partner. In our experience,
an effective
BPS provider will do the following:
Engage with you at a strategic
level and collaborate with you over the long term, to take on processes
that can be better delivered externally.
Take ownership of your
processes, end to end, understanding how each process contributes to the
business in the context of your particular industry.
Invest in continual
improvement of service delivery and management, through innovative mixes
of people, process and technology to deliver the service at hand.
Show you tangible results – both
with cost savings and real enhanced revenue streams – and will be happy to bet
on those results with gainsharing terms in their contracts.
KPO vs BPO: Difference between KPO
and BPO
With the global outsourcing sector
showing steady growth, despite the looming slowdown, there have been many KPO
and BPO units coming up especially in the developing nations. For a layman,
both seem one and the same thing but in reality there is profound difference in
KPO and BPO. Let us first define both the terms.
What is BPO?
What is BPO?
Business Process Outsourcing or BPO is outsourcing of some of the business
functions to a third party in order to save money. It usually consists of the
back office or front office operations. While front office services are related
to client interaction and customer support, back office services are related to
finance and HR. If outsourcing is done to a company situated outside the parent
company's country, it is known as offshore outsourcing.
What is KPO?
What is KPO?
Knowledge Process Outsourcing or KPO is a subset of BPO. KPO involves
outsourcing of core functions which may or may not give cost benefit to the
parent company but surely helps in value addition. The processes which are
outsourced to KPOs are usually more specialized and knowledge based as compared
to BPOs. Services included in KPO are related to R&D, Capital and insurance
market services, legal services, biotechnology, animation and design, etc. are
the usual activities that are outsourced to KPOs. LPO or Legal Process Outsourcing
is special type of KPO dealing with legal services.
Difference between BPO and KPO, which one is better?
Difference between BPO and KPO, which one is better?
As we saw earlier, BPOs usually deal with fringe business activities such as
customer care, finance and HR and at the same time, the USP of a BPO is their
being cost effective. Companies usually outsource such processes to BPOs which
are not directly linked to its value chain. And the motive behind such
outsourcing is directly linked to cost reduction.
On the other hand, highly
specialised and knowledge based services are outsourced to KPOs. These
activities are directly related to core offering of parent company. The motive
behind such outsourcing is not only to reduce cost but to get specialised
solutions for which availing in-house resources might be tough.
The difference in BPOs and KPOs can also be judged by the way they hire people.
While basic education may be enough for you to get a BPO job but a KPO job
requires you to be competent in a particular field. Also, the training provided
by the KPOs is more rigorous and sector specific. So if you are a 'Jack of all
trades', KPOs may not be the right choice for you.
Even businesses outsourcing their services to KPOs do a more extensive research
before giving a contract to a particular KPO, as a good KPO can be the
differentiating factor between a good market offering and a bad one.
So if you compare the functionalities and expertise involved, KPOs are far
better than BPOs, but both of them help businesses to streamline their
operations and making them cost effective.
Why KPOs are emerging at a rapid pace now?
Why KPOs are emerging at a rapid pace now?
1) Lack of highly qualified professionals in developed countries.
2) BPOs are shifting further east to Philippines and Bangladesh, thus India is
exploring KPOs as the next big thing for them.
3) As the US Government is taking steps to reduce outsourcing, BPO will get hit
the most, unlike skill based KPOs.
