How to choose a BPO vendor?

How to choose a BPO vendor?


Business process outsourcing has changed, advanced, and grown since the Covid pandemic hit the world in 2019. If you would have to point out the fastest growing industry in the world, it has to be Business Process Outsourcing (BPO). Grand View Research in 2019 stated that, as 2025 ends, the global BPO market could hit USD 343.19 billion. While the Covid-19 global pandemic might have affected that growth, there is no taking away the fact that the demand for outsourcing is rising.

Competitive businesses and organizations are always looking to find ways to be more efficient in fluctuating markets and complex industries. One of the best ways to do that is to outsource non-essential tasks so that you aren’t wasting manpower. Many companies look to business process outsourcing, otherwise known as BPO.

 Organizations contract with BPO vendors for two main areas:

  1. Back office operations: They include payment processing, information technology services, quality assurance, etc.
  2. Front office operations: They include marketing, sales, customer relations, and grievance redressal.

  In many cases, organizations outsource one or more functions. For example, instead of outsourcing all HR functions, the company will outsource just the payroll processes.

Lower costs, higher efficiency, focus on core business functions and global expansion are some of the benefits that seduce established organizations from all industries (Finance, Healthcare, Tech) and Startups companies (Called the new BPO customers) to contract with BPO. 


  But with thousands of vendors to choose from across the world, selecting a BPO provider can be tough. There are many details to consider beyond price, including cultural values, political stability, specialization, and the ability to create a cohesive vision.

When choosing a provider for process outsourcing needs businesses must review several details prior to selecting one specific company. The client company must go through the following list while considering hiring a BPO vendor:


  1. Establish Your Needs 

Think about the company’s objectives. What do you want to accomplish through BPO? Who will these decisions affect?

This phase is the longest, and arguably, the most critical step for an outsourcing business. Use this time to consider the objectives, benefits, and risks of your BPO goals.

Is it back office or front office outsourcing that interests you? Which specific business processes do you want vendors to manage?

Involve stakeholders from the beginning. Establish stakeholder expectations early on and contemplate which type of BPO will be most effective.

Review over each of your company’s business functions, including those that will not be outsourced to gain a clear idea of what services are needed.

  1. Review Potential Vendors

Begin sourcing potential vendors to manage your process outsourcing needs.

  1. Create a Request For Proposal and Reach Out to Vendors

Through the use of market research, create a request for proposal (RFP) and begin sending it to potential providers. Keep stakeholders involved so as not to cause any disruption in your business relations.

Further, establish which service management model your company will utilize.

  1. Portfolio Evaluation:

Evaluating the portfolio of a BPO service company is the best method to gain insight into the working pattern and the project type managed by them. 

This will also highlight any hurdles faced by their past clients and the steps taken by the BPO company to resolve them. Ask for recommendations from previous customers to better identify the strengths and vulnerabilities of the prospect vendor.


  1. Define Budget:

Before hiring a BPO service agency, the client company must analyze their budget. BPO services can be acquired over the most modest investments.

However, the main concern is deciding the amount you are willing to pay and locating an agency that coordinates with your prices.

It is advisable to stay open to alterations in the budget since BPO companies are better versed regarding the investments needed to accomplish the desired goals. Make sure to get quotations from numerous vendors before finalizing the right partner.

  1. Choose Your Vendor

Carefully evaluate the pros and cons of each outsourcing partner you have sourced and choose the one that best suits the needs of the business and its stakeholders.


  1. Check Certifications and Infrastructure

Before finalizing the deal, it is imperative to check the certifications acquired by the prospective firm. 

Depending on the type of services you require, request to view relevant certificates and attestations accomplished by them. If the service requires extensive gadgets and infrastructural supplements, ensure that the BPO company has these facilities already in place for the smooth accomplishment of your business processes.

  1. Draw Up the Contract

At this point, you can begin negotiating a contract. Take an appropriate amount of time and contemplation to complete this process, as it will dictate the future of your outsourced operations. Ensure that all stakeholders are on board and that you and the provider have successfully agreed on all contract terms.

In conclusion, Business process outsourcing has become incredibly popular with companies ranging from Fortune 500s to startups over the last two decades.

Businesses in every industry can now outsource non-core processes while applying more resources to core business functions. The outlook for the global outsourcing industry in 2021 is positive growth.

Following the above criteria ensures that you find the best business process outsourcing company. The final advice would be to start small irrespective of the vendor you choose, increasing the services gradually when the first three months service are completed.