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Home | Blog | What Is Shared Services? Differences Between BPO and Shared Services
Home | Blog | What Is Shared Services? Differences Between BPO and Shared Services

What Is Shared Services? Differences Between BPO and Shared Services

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What Is Shared Services_ Differences Between BPO and Shared Services
Home | Blog | What Is Shared Services? Differences Between BPO and Shared Services

In today’s competitive business world, organizations are constantly exploring ways to optimize their operations and streamline their processes. Business Process Outsourcing (BPO) and Shared Services are the two prominent techniques that often arise in discussions. While both concepts involve consolidating services to achieve efficiency, they differ in scope and implementation.

Call Center Studio empowers businesses in shared services by providing advanced features like call routing, real-time analytics, and agent monitoring, leading to improved customer service and enhanced operational efficiency. Cloud Contact Center Software enables seamless collaboration and communication within shared services organizations.

 

This blog explores what shared services are and the differences between BPO and shared services.

 

What Is Shared Services?

Shared services refer to consolidating and centralizing specific organizational business functions to leverage economies of scale, enhance efficiency, and reduce costs. It involves creating a dedicated unit that serves multiple internal customers, such as different departments or business units, by providing standardized services.

 

Differences Between BPO and Shared Services

 

Exploring Business Process Outsourcing (BPO)

BPO involves outsourcing specific business processes or functions to external service providers. Organizations opt for BPO to leverage specialized expertise, access advanced technologies, and allow focus on their core competencies. BPO contact center is crucial in handling customer interactions and providing support services, including cloud call center solutions.

 

Difference Between BPO and Shared Services

BPO (Business Process Outsourcing) and Shared Services are business models that involve delegating certain tasks to external entities but differ in key aspects.

 

BPO refers to outsourcing specific business processes or functions to a third-party service provider. In BPO, an organization transfers entire processes, such as customer support, payroll, or IT services, to an external provider. The BPO provider takes full responsibility for managing and executing these processes on behalf of the client.

 

On the other hand, Shared Services is an organizational model where multiple business units or departments within a company consolidate their support functions into a centralized service center. Instead of outsourcing to an external provider, the company establishes its own internal shared services center to deliver support functions like HR, finance, IT, or procurement to its various divisions or departments.

 

The key differences between BPO and Shared Services can be summarized as follows:

  • Ownership: BPO involves outsourcing processes to an external service provider, while Shared Services keep the functions in-house within the organization.
  • Service Provider: BPO relies on an external service provider specializing in specific processes, while Shared Services operate as an internal company unit.
  • Control: In BPO, the client organization hands over the management and execution of processes to the BPO provider, relinquishing control. The company retains control over the functions in Shared Services and maintains direct oversight.
  • Customization: BPO providers typically offer standardized services to multiple clients, while Shared Services can tailor their support functions to meet the specific needs of different business units within the organization.
  • Cost Structure: BPO often involves paying for services on a transactional basis or through fixed contracts. Shared Services operate under a cost-sharing model, where the expenses are allocated among the departments or business units.

 

What Is Shared Services

 

What Are the Benefits of Shared Services?

Implementing shared services can bring several advantages to organizations. Some of the top benefits of shared services include:

 

Cost Savings

Shared services enable organizations to consolidate and centralize support functions, leading to economies of scale, reduced duplication, and cost savings. Organizations can optimize their operational efficiency and achieve cost efficiencies by eliminating redundant activities and resources.

 

Improved Service Quality

Shared services typically focus on specialization and standardization, leading to improved service quality. Organizations can leverage best practices, standardized processes, and specialized skills to deliver consistent and high-quality services to internal stakeholders by pooling resources and expertise.

 

Enhanced Efficiency and Productivity

Shared services eliminate silos and streamline processes, enhancing efficiency and productivity. Organizations can eliminate inefficiencies, reduce bureaucracy, and accelerate decision-making by eliminating duplicate activities and centralizing processes. Businesses can utilize Call Center Studio for outbound call center solutions. This can increase sales and enhance efficiency and productivity.

 

Increased Focus on Core Competencies

By transferring non-core support functions to shared services, organizations can focus their resources and attention on core business activities. This enables better alignment with strategic objectives, fosters innovation, and enhances competitiveness in the marketplace.

 

Standardization and Harmonization

Shared services promote standardization and harmonization across different business units or departments. This helps establish consistent practices, processes, and policies, enabling better integration and collaboration.

 

Scalability and Flexibility

Shared services provide scalability and flexibility to meet changing business needs. They can quickly adapt to fluctuations in demand, allocate resources as required, and provide agile support to the organization during periods of growth, restructuring, or market volatility.

 

Knowledge Sharing and Expertise

Shared services facilitate sharing of knowledge, best practices, and expertise across the organization. Organizations can create a collaborative environment that fosters learning, cross-functional cooperation, and innovation by centralizing resources and talent.

 

Enhanced Governance and Control

Shared services enable organizations to establish stronger governance structures and controls. Centralizing functions allows for better oversight, improved compliance, and standardized reporting, ensuring consistent and transparent practices throughout the organization.

 

Disadvantages of Shared Services

Shared services offer numerous benefits, but they also have a few drawbacks. One challenge is the initial setup costs and transition period, which can be resource-intensive. Additionally, there may be resistance to change from employees who are accustomed to decentralized operations. The complexity of managing diverse stakeholders and ensuring effective communication and coordination across different units can also pose challenges. Moreover, the standardization inherent in shared services may limit flexibility and customization options in certain cases.

 

How to Implement Shared Contact Center Services in Your Business

Implementing shared call center services requires careful planning and execution. Here are some critical steps to consider:

 

Assess Your Organization’s Needs

Identify the specific call center services that can be consolidated and standardized through shared services.

 

Define the Shared Services Framework

Determine the shared call center services’ scope, objectives, and structure, considering service level agreements, performance metrics, and governance.

 

Establish Technology Infrastructure

Invest in cloud call center software that supports multi-channel communication, enables efficient call routing, and provides robust reporting and analytics capabilities.

 

Ensure Stakeholder Buy-in

Communicate the benefits and rationale behind implementing shared call center services to gain support from relevant stakeholders and address any concerns or resistance.

 

Develop a Transition Plan

Define a phased approach for transitioning call center operations to the shared services model, ensuring minimal disruption to ongoing operations and proper training for staff members.

 

Conclusion

Call Center Studio and Cloud Contact Center Software offer valuable solutions for businesses in shared services, enabling them to optimize their call center operations. Shared services and BPO provide different procedures for optimizing business operations and enhancing efficiency. While shared services focus on internal consolidation and standardization, BPO involves outsourcing specific functions to external service providers. Organizations seeking to simplify their processes effectively must understand the distinctions between them.