A B2B (business to business) engagement is generally understood to be a customized arrangement between two equals who know what they want and how to go about getting it. They enter into a business arrangement, usually covered by a legal contract, through which both hope to create value for their respective companies. In most cases, one is a client and the other the provider, though alignments and partnerships, such as joining the features of two complementary products to offer a wholesome product to clients, are not unusual.

While the above holds true in most cases, thanks to the rapid spread of technology and large technology corporations offering products and services needed by many companies, now there are many examples of smaller companies accepting the standardized terms offered by a large technology corporation for the use of their product. Accept it or look for another product. They don’t have the time to negotiate each contract individually.

This, the need for doing it faster so that you can do more, exists in the negotiated contract space as well. The company has not been created to spend senior management time negotiating legal contracts with business partners. They have a product or service to create and sell and that is where the focus ought to be.

This is where models come in handy.

What is a model?

In the context of business, a model could be referred to as an arrangement that, on account of its suitability to the parties involved, has been used and replicated a number of times. Given certain conditions that make it suitable, it serves as a good starting or reference point on which other, similar cases could be created.

The business outsourcing industry, thus, could also be referred to as the business process outsourcing model. Once discovered, and used successfully by some, it has been repeatedly replicated by many others. This is not unique to the business process outsourcing (BPO) industry. It is applicable to all industries and situations that can be repeated by others. To elaborate on the point, the life insurance industry model could be the pooling of risk by calculating the probability of death and charging a premium to participants for paying out in cases where the event occurs, or someone dies. Many different companies offer their products and services based on this broad model.

With its focus on data-based services, ANH has worked on over a hundred different client engagements and evolved suitable models that create a win-win situation for both. An example is the option of input or output-based pricing, with the choice resting with the client. ANH is recognized as a top three provider in this segment.

The core business process outsourcing model

Many successful business models are based on following the natural needs and requirements of humans. Artificial needs and aspirations can also be created, but are more difficult to sustain.

As we perhaps already know, business process outsourcing is the outcome of man’s quest for seeking efficiencies and value in all activities he is engaged with, whether in the personal or work sphere. While the informal outsourcing of processes has been carried out from time immemorial, formal business process outsourcing is a more recent phenomenon, perhaps a few decades old, and already a flourishing and growing industry.

Search for value is a core building block of a business, as much as it is of an individual. BPO creates value for a business in many different ways. Some of them are:

It enables a company to focus on its core work while handling the support functions

With its specialization and expertise in those support functions, since it is a revenue generator for the vendor, it is able to perform them better than the client, for whom it is a cost that needs to be handled while pursuing its own revenue stream in its core business.

With its hiring and training engine, a BPO is able to ferret out talent pools that are inaccessible to most companies. These talent pools are made up of less expensive resources, who are then taken in hand by the training teams and polished to make them fit for handling the client’s business.

As they do not need to be in downtown and high street locations, BPOs can operate from cheaper locations, creating a cost advantage for the client.

Business process outsourcing model – ownership

Several models have been tried concerning the ownership of the entity doing the outsourced work. The two natural choices of using a third-party vendor and doing it under the same company have remained the most viable. The ‘same company’ model has evolved and offers different options.

Third-party

This is the preferred model whenever dipping toes in the water is required before diving in. As the industry has expanded, outsourcers have primarily relied on established BPO providers to initiate the activity. This has helped them overcome the challenges of needing more familiarity with the delivery location, identifying resource pools, and other administrative issues.

Third-party providers have continued to excel and grow. Many large corporations have continued to trust external providers with their work, despite occasional data integrity challenges and decision-making delays. It has a significant advantage in not wasting management time on support activities.

ANH operates from super secure facilities and protocols. They are ISO certified (27001:2013 & 9001:2015) and GDPR compliant.

Owned

The industry's beginnings were under this model, when the companies engaging in business process outsourcing may not even have realized that they were seeding a future endeavor.

At that stage, the objective was to remove non-customer-facing activities from the expensive downtown real estate and establish them in a less costly location. It had the side benefit of attracting resources that were also less expensive. At that stage, little thought was given to the models of ownership that might be suitable.

With a policy of multicultural and multi-ethnic employment that is in place.

Independent company in the group

Over time, this business process outsourcing model has emerged as one that large corporations prefer. It is a variation of the ‘owned’ model. The major significant erence is that the work is outsourced to an independent company with its own identity, even though the eventual ownership perhaps lies within the same group as the outsourcer.

The advantage is that it allows the outsourcer to distance itself from the vendor, as it is a separate company, while getting at least some benefits of joint decision-making. It also gets the use of a lower-cost operating model.

With global transaction volumes rising and many large corporations getting more extensive, there is enough volume for many to justify an independent entity only for handling their outsourced business processes.

Build Operate Transfer (BOT)

This is another hybrid model that some have adopted.

The client eventually intends to adopt the ‘owned’ or ‘independent company in group’ model but has hesitation because of a lack of experience in this line of work and a lack of familiarity with the terrain. They engage with a third-party operator to set up a niche, dedicated delivery unit for them, with some understanding of the eventual transfer of ownership to them.

This gives them adequate time and opportunity to understand the model before they end up owning it. Of course, there might also be some escape hatches built-in in case they wish not to take it over when the time eventually arrives.

If you’re looking for an outsourcing partner who will take your business to new heights and grow along with the global economy, then contact us now to get a free quote.