BPO (short for Business processing outsourcing) and outsourced call centers are common business solutions in many industries. Thus, they are often lumped together, some even assuming both terms point to the same service. But just one closer look reveals a lot of key distinctions between them.
So, what is the difference between BPO and call center, exactly? Keep scrolling to learn more.
What Is The Difference Between BPO And Call Center?
Their goals and involvement with the business are not similar (Image source: Pxhere).
Outsourced call centers are part of BPO, so these two terms do have some strong relevance. Nevertheless, it is important to pinpoint the key assets that set them apart.
1. Business Goals
For businesses partnering with BPO firms, the goal is to optimize and streamline internal business processes across various departments, such as human resources, accounting, payroll, IT, and logistics.
Specifically, the outsourced partners must be able to manage diverse, non-customer-facing tasks, leveraging specialized knowledge to improve efficiency and reduce costs.
On the other hand, call centers primarily focus on managing customer interactions through various channels (mostly phone-based, but other platforms like social media or email are also becoming increasingly common). From here, they can help provide customer service and support to drive sales conversions.
As you can see:
- BPOs are process-driven, whereas outsourced call centers are customer-centric.
- BPOs offer a broader range of services beyond customer interactions, while call centers specialize mostly in that specific area.
From our experience, BPOs often take on a more strategic and consultative role.
They work closely with your internal teams to understand your processes and identify inefficiencies, thus designing the best solutions. As a result, BPOs are expected to handle entire processes from start to finish, including managing staff, technology, day-to-day operations, etc.
Long story short, you are freed up to focus on your core business while the BPO partner takes ownership of the outsourced processes. And depending on the complexity of the tasks outsourced, BPOs may require deeper integration with your systems and data.
Meanwhile, call centers are mostly responsible for executing specific tasks, such as answering customer inquiries, resolving issues, and processing orders.
Their involvement is often transactional, following defined scripts and protocols to handle customer interactions. Due to these standardized services, they usually have less flexibility in customizing their approach to your needs.
To sum it up:
- BPOs offer strategic consulting, while call centers focus on operational execution.
- BPOs may manage the entire process, while call centers focus on specific tasks within a defined framework.
- Call centers often operate more independently. On the other hand, BPOs can integrate deeper with your systems if permitted.
3. Cost Considerations
Both BPO and call centers have varied pricing models to cater to different business sizes and preferences:
- Fixed fees: Agreed-upon fees for specific deliverables or process management
- Transaction-based: Cost varies based on the volume of tasks handled (e.g., per payroll entry, invoice processed).
- Time & materials: Billed based on staff time invested and resources used.
- Hybrid: Combines elements of different models for flexibility.
The main cost drivers are the complexity of the process, location of the BO Provider (onshore options, for example, can be more expensive), level of customization, and infrastructure.
- Per-minute: Cost directly relates to call duration and agent time
- Per-call: Fixed cost per completed customer interaction.
- Performance-based: Cost varies based on achieved metrics like customer satisfaction or sales conversions.
- Subscription: Fixed monthly fee for unlimited calls or specific call volume
Other factors influencing the price are call volumes, channel mix (are you opting for omnichannel support or single-channel approaches?), technology involved, and agent expertise.
Types of BPO
1. Front-Office BPO
Call centers are part of front-office BPO (Image source: WheelerCPA).
Front-office BPO involves contracting out customer-facing services to a third-party provider. These services are the ones that directly interact with and impact your customers, thus playing a crucial role in building relationships and driving revenue.
- Sales and marketing (including generating leads, telemarketing, conducting sales calls, managing marketing campaigns, etc.)
- Providing customer support through various channels like phone, email, chat, and social media
- Assisting customers with technical issues related to your products or services
- Managing interactions with the press, handling community engagement, and scheduling meetings
- Setting up and managing inbound or outbound call centers for lead generation, customer support, or surveys (this is why we consider call centers a sub-division of BPO)
2. Back-Office BPO
On the other hand, Back-Office BPO refers to outsourcing non-customer-facing tasks to a third-party provider. Hence, unlike its front-office counterpart, these functions operate behind the scenes to support your core business activities.
- Finance and accounting: Payroll processing, bookkeeping, financial reporting, tax preparation
- Human resources: Recruitment, onboarding, benefits administration, training programs
- Information technology: Helpdesk support, network management, software development, data security
- Supply chain management: Inventory control, purchasing, logistics, warehousing
- Administration & operations: Data entry, document management, legal services, market research
3. Onshore Outsourcing
Also known as domestic outsourcing, onshore outsourcing means you contract services to a third-party provider located within the same country as your business.
A US company hiring a local marketing agency for social media management or a healthcare provider outsourcing its medical transcription services to a local company are all examples of onshore outsourcing.
- Both parties share the same cultural understanding and communication practices
- Easier collaboration and communication due to similar working hours
- Simplifying adherence to local laws and regulations
- Potentially less risk of data breaches due to stricter data privacy regulations
- Easier to monitor and manage service quality with closer proximity
4. Offshore Outsourcing
You should be aware of some potential cultural challenges (Image source: Wiki).
Commonly known as international outsourcing, this option connects your business to a provider from a different country (typically with lower labor costs than your home country). It's a popular strategy to reduce operational costs and access specialized talent, especially for businesses with tight budgeting issues.
- Access to lower labor costs and potentially cheaper infrastructure
- Easily adjust staffing levels based on demand fluctuations
- Tap into a broader talent pool with unique skills and expertise
- Leverage different time zones for extended service coverage and 24/7 availability (quite beneficial for customer service businesses)
But, of course, there might be severe communication challenges due to both cultural differences and language barriers. The different working hours also hinder collaboration; worse, data security can be a real concern here.
We also suggest your business come up with more effective monitoring systems for these remote providers to ensure service quality.
5. Nearshore Outsourcing
With nearshore outsourcing, you will partner with a provider from a nearby country, typically sharing similar time zones and cultural aspects. It serves as a middle ground between onshore (domestic) and offshore (faraway) outsourcing, balancing the benefits and drawbacks of both options.
Some common examples:
- A US company outsources its customer service operations to a call center in Mexico
- A European business contracts with a software development team in Eastern Europe
- An Australian firm hires a marketing agency in New Zealand
Types of Call Centers
1. Inbound Call Centers
An inbound call center is primarily responsible for handling incoming phone calls from customers. Since they often serve as the first point of customer contact, inbound call centers are understandably considered a critical component of the overall customer service strategy.
Some common types of inbound call centers:
- Technical support: Assisting customers with technical issues related to products or services
- Customer service: Handling general customer inquiries, complaints, orders
- Sales: Generating leads and qualifying potential customers over the phone
2. Outbound Call Centers
Unlike inbound call centers that handle incoming calls, outbound call centers proactively reach out to customers and prospects over the phone. Their primary goals can vary depending on the specific type of outbound centers but generally fall into these categories:
Sales & marketing:
- Generating leads and qualifying potential customers for sales teams
- Conducting telemarketing campaigns to promote products or services
- Cross-selling and upselling to existing customers
- Conducting market research and surveys
- Proactively contacting customers after purchases or service interactions to check satisfaction and gather feedback
- Offering support or informing customers about new products, services, or updates
- Recovering past-due payments or collecting debts
- Fundraising for charities or non-profit organizations
- Conducting political campaigns or canvassing for votes
- Scheduling appointments or reminders for existing customers
3. Virtual Call Centers
StringeeX is one of the best virtual call centers (Image source: Youtube).
Virtual/cloud call centers like StringeeX significantly differ from the traditional brick-and-mortar center.
How so? Agents can work remotely instead of from a centralized location. Making and receiving calls from different communication channels is also a breeze without constant platform switches.
- Leveraging cloud computing for call routing, communication, and data management
- Offering flexibility for agents to work from various locations and potentially around different time zones
- Lowering overhead costs due to the reduced need for physical office space
- Quick and easy set up; easily adjusting staffing levels based on call volume fluctuations
What is the difference between BPO and call center?
Call centers are just a part of BPO, which results in clear distinctions between their goals and delivery modes. And both services are further categorized into smaller segments, presenting diverse options and pricing models to choose from.
Consider each option carefully to settle on the best one for your business. Write to us if you have more questions.