In pursuit of operational excellence, modern businesses often find themselves at a strategic crossroads. The goal is clear:
- reduce costs,
- improve efficiency, and
- streamline complex processes.
However, the path to get there often involves a difficult choice between two distinct models: utilizing a Business Process Outsourcing (BPO) provider or establishing an internal Shared Services Center (SSC).
While the terms are sometimes used interchangeably, they represent fundamentally different approaches to business management.
The global market for business process outsourcing is projected to reach substantial heights, estimated at USD 280.6 billion in 2023, indicating that outsourcing remains a dominant strategy for many.
However, Shared Services are equally on the rise among mature enterprises seeking tighter control.
To help you navigate this decision, we have broken down the five key differences between a BPO and a Shared Services Center.
1. Ownership and Governance Structure
The most distinct difference lies in who actually owns the operation.
A Shared Services Center (SSC) is a dedicated unit within your own organization (or a wholly-owned subsidiary). It provides specific services such as HR, IT, or call center operations to various business units.
The staff are your employees, the assets belong to you, and the governance is internal.
A BPO is an external third-party vendor. When you engage a BPO, you are contracting another company to perform a process on your behalf. The staff are the vendor’s employees, and they may be serving multiple clients simultaneously.
Why it matters: If keeping intellectual property and deep institutional knowledge strictly “in-house” is a non-negotiable mandate, an SSC is often the preferred route.
2. Cost Structure and Financial Model
Financial implications are usually the primary driver of these decisions, but the types of costs differ significantly.
BPOs typically operate on a transactional or fixed-fee model. This shifts costs from CAPEX (Capital Expenditure) to OPEX (Operational Expenditure).
You generally pay for what you use, whether that’s per-agent hour or per-resolved ticket. This model is attractive for companies looking to avoid heavy upfront investment in infrastructure.
Setting up an SSC requires significant upfront capital. You are leasing space, buying hardware, and hiring management.
However, research suggests that mature Shared Services organizations can deliver annual productivity improvements of 5% or more. This eventually leads to higher long-term savings compared to outsourcing once the volume reaches a “critical mass”.
Note: Regardless of the model, cost optimization is heavily reliant on the technology used. Legacy on-premises systems bloat SSC costs, whereas cloud contact center solutions can lower the barrier to entry.
3. Control and Cultural Alignment
How important is it that the agent handling your customer service embodies your brand’s culture?
Because an SSC is part of your company, maintaining cultural alignment is easier. Agents are immersed in your brand values daily. You have direct control over hiring criteria, training modules, and day-to-day management.
With a BPO, control is exercised through contracts and SLAs (Service Level Agreements). While top-tier BPOs are excellent at adapting to client cultures, there is always a degree of separation.
You are managing results (metrics), not necessarily the behaviors or the minute-by-minute operations.
4. Scalability and Flexibility
Business volatility requires an agile response. Here, the two models offer different advantages.
BPOs are the masters of elasticity.
If you have a retail seasonal spike (like Black Friday), a BPO can reassign agents from other accounts or ramp up hiring much faster than an internal HR department can.
Scaling an internal SSC takes time. Hiring, onboarding, and provisioning equipment for new internal employees is a slower process.
However, for stable, predictable workflows, an SSC provides a consistent, dedicated workforce that doesn’t fluctuate with vendor availability.
5. Strategic Focus
Finally, the “why” behind the move differs.
The strategic goal of BPO is often to allow the client to focus on core competencies.
If you are a software company, you want your best minds on coding, not on payroll processing or Tier 1 support. You outsource to clear the deck.
The focus of an SSC is process excellence and standardization. It is about consolidating disparate processes across five regional offices into a “center of excellence” to improve quality across the enterprise.
Bridging the Gap: How Call Center Studio Supports Both Models
Whether you choose to build a Shared Services Center or partner with a BPO, the success of your customer experience optimization hinges on the technology that powers the interaction.
Siloed data and clunky legacy systems fail in both models. This is where Call Center Studio intervenes as a unifying force.
For Shared Services Centers (SSC)
If you are keeping operations internal, Call Center Studio offers a cloud contact center solution that eliminates the heavy hardware costs usually associated with starting an SSC.
- Rapid Deployment: You can set up your internal center in days, not months.
- Workforce Management: Native tools help you efficiently manage your internal staff’s schedules and adherence.
For BPOs and Hybrid Models
If you outsource, you need visibility. You cannot improve what you cannot measure.
- Real-time Analytics: Call Center Studio provides a “glass wall” into your operations. Even if agents are external, you can see agent performance and live metrics on a unified dashboard.
- AI-Powered Efficiency: Our AI-powered contact center tools assist agents (internal or external) with real-time suggestions, reducing training time and ensuring consistency regardless of who is answering the phone.
The Power of Omnichannel
Both models struggle if communication channels are disconnected.
Call Center Studio delivers true omnichannel customer service by integrating voice, chat, email, and social media into a single interface. This ensures that whether a query is handled by an in-house expert or an outsourced agent, the customer journey remains seamless.
Final words on BPO vs Shared Services Center
Deciding between a BPO and a Shared Services Center is a strategic decision that impacts your culture, agility, and control.
- Choose a BPO if you need rapid scalability, lower upfront costs, and wish to focus strictly on core business activities.
- Choose an SSC if you require deep cultural alignment, maximum control over processes, and long-term asset retention.
Whichever path you choose, Call Center Studio ensures your operation is future-proof. By leveraging cloud technology and AI, we help you bridge operational gaps, ensuring that your service strategy delivers exceptional results.
Would you like to see how our cloud solution can specifically lower the setup costs for your planned Shared Services Center? Book a demo with us today.
