Many UK companies within the financial services sector are realising the potential benefits of business process outsourcing (BPO) as an effective way of achieving savings and operating efficiencies, and better managing risk. Whilst outsourcing specific business functions and processes to a third-party organisation to drive down costs is a practical approach and makes business sense, it is not where the story ends because there is a wider range of value added benefits available.

In its infancy, BPO consisted mainly of processes such as storage, order processing and fulfilment, payroll services and employee benefits management, but this has since grown to cover a wide range of functions, which are significant but not necessarily seen as being core to an organisation’s business strategy. As a result, it is now not uncommon for companies to outsource a host of processes such as financial and administration, payments processing, human resources, call centres, customer services. 

In fact, by partnering with outsourced service providers its possible to create solutions that adopt industry expertise in the context of a long-term relationship to improve the entire process. For example, elements such as game-changing analysis, contingency planning, industry insight and operational flexibility can be value-adding for businesses when they are considering onerous but critical functions such as secure/sensitive materials stock control and supply management, where fraud prevention and operational risk are high on the agenda.

For the banking and building society sectors in the UK in particular, third party managed stock control systems that automatically manage supplies such as cheques, credits and passbooks can achieve a considerable level of value when spread across a substantial branch network. Using an automatic replenishment solution for counter cheques, branches no longer need to worry about the manual ordering process. As a result, it is not only possible to reduce branch and central warehouse stock levels, but also remove considerable administration and entirely eliminate ordering costs.

This allows branch staff to concentrate fully on their core responsibilities, whilst ensuring they will always have cheques and passbooks when required to maintain high levels of customer service. Meanwhile, central management teams will have access to detailed reporting and analysis on demand to monitor patterns and trends that will help with planning, forecasting, and end of life product management and replacement.

Taking a BPO approach to important, but non-core, functions means that an organisation can gain added insight into many areas of their business. The right relationships in place ensure bespoke solutions tailored to precise business needs, adding considerable value beyond cost reduction. As a result the previously unheralded activity can support greater levels of innovation and operational improvement, as well as better decision-making.