The outsourcing industry has experienced multiple inflection points over the years. In the initial years, cost advantage was the main driving force for the companies to outsource their non-core business operations to the call centers. With time, the focus has shifted to a holistic approach of striving to attain strategic advantages by following the most beneficial and optimum service delivery model.
BPO model may vary according to service provider capabilities, as well as client needs and expectations. Whereas the wide models befit organizations offshoring a large portion of their functions to the service providers to leverage the expertise of the outsourced firm in that field; a comprehensive model is apt for the companies outsourcing all their functions to the service provider. Let us discuss each model in detail.
Types of BPO Business Models
Every business deploys a different business model, customized to its requirements. A call center operation is conducted through following business models:
Captive Model : A captive center model mostly handles proprietary and core functions of a business, which are retained consciously by the parent organization for greater ownership and control. This business model guarantees long-run specialized resource requirements and is suitable for companies keen to reap cost benefits from having its own operations at lower costs.
Build-Operate-Transfer or BOT Model : In this model, a client contract with an independent service provider to embark a process in a dedicated way. Under the BOT model, a private entity designs, constructs, and operates a facility to help clients in leveraging the third-party service provide effective cost structure, low transition time, and process expertise.
Joint Venture (JV) Model : In a JV model, vendor and organization jointly contribute to capital, personnel, intellectual property rights as well as other resources for designing and implementing a solution. The two partners equally share and own profits, losses, assets, and management. The core business functions are directly owned by the business, while the less critical services are outsourced to third party vendors.
Niche BPO: The model aims at improving efficiency of a company process by working closely with the firm. . Both vendor and company share the risk associated with the process.
Selecting a suitable BPO Company model is an important aspect of the formulating outsourcing strategy of a company. Companies evaluate multiple options to benefit from retaining flexibility, mitigating risks, and gaining maximum advantage. The most commonly followed approach is the JV model, whereby a company outsources less critical back-end functions to the third party service provider and leverage benefits from cost efficiency by focusing on its core operations. The rising popularity of this model can change the game entirely for the companies looking out for knowledge process outsourcing.