BPO : A good solution for international companies to set-up a subsidiary at low cost in Brazil

What is BPO (Business Process Outsourcing)? 

BPO is an abbreviation for Business Process Outsourcing. In the BPO, a certain company hires another company, in this case an outsourced company, to assume and control some of its activities.

The objective in this case is to deliver some company processes to professionals who have expertise in each subject, whether in activities related to import, logistics, IT, legal, accounting, among others.

What is the difference between BPO and outsourcing?

It is very common that BPO is often related to outsourcing, mainly because of the meaning of the term. However, BPO has differences compared to normal outsourcing itself.

The main difference between BPO and regular outsourcing is in the process itself. In normal outsourcing, there is no need to create a new procedural model to meet the requested service.

Normal outsourcing usually provides a one-time, one-off service, such as maintenance or cleaning, for example. On the other hand, BPO outsourcing is broader, since the responsible company will take over the entire activity and sector, such as supply chain, IT, finance or HR.

In other words, all processes and results in this sector will be the responsibility of this partnership and the company that will assume the activities.

Not to mention that in the BPO, there is a greater depth on the part of the contracted company in relation to the client’s needs, even developing a model adaptable to what it needs, in the sense of technologies, knowledge and procedures.

How do BPO services work?

BPO is a service offered by an outsourced company, which has all the tools and knowledge to contribute to the improvement of processes and procedures in a certain area of ​​the contracting company.

With this, the company can find it easier to alleviate its bureaucracy and focus on people management strategies and on the execution of tasks concretely. After all, it can deliver processes such as supply chain and finance to those who have greater expertise to do so.

Main advantages and benefits of BPO in Brazil for international companies? 

Adopting BPO in the company for your Brazilian operation can provide numerous benefits to the organization, making the processes of several areas more assertive, fast and effective. Check out some of the main advantages of BPO below.

Cost reduction

Identifying secondary and often unnecessary expenses is not an easy task in companies, especially for those who live with teams overloaded with many demands in the main areas of the company (administrative, accounting and legal).

In Brazil specifically, we often talk about Cout Brazil, which refers to the increased operational costs associated with doing business. There are internal and external several factors that contribute to the extra cost. The internal factors whose impact can be reduced via a BPO policy are: 

  • Excessive bureaucracy for importing and exporting, requiring a strong import export team
  • Low education levels and lack of qualified labour, making it more difficult to find performant profiles
  • Excessive layers of bureaucracy and complex tax legislation, making it essential to multiply administrative positions and rely on in-house tax specialists.

Brazilian firms spend on average 2600 hours per year for paperwork and taxes, the highest rate in the world; compared to 317 hours in Latin American countries or 159 hours in OECD countries.

This additional workload translates into more manpower, an organization that must be extremely precise and a lot of time that is not allocated to value creation activities.

Counting on a BPO company, it is possible to avoid unnecessary expenses, as this organization has already accumulated experience, has a structure to diluted manpower costs and will carry out a technical analysis of gains and expenses, creating strategies to promote cost reduction and make investments more assertive.

And not only that, with professionals with greater expertise in selected areas, the work is performed more precisely and thoroughly, especially in financial areas.

Increased productivity

In fact, outsourcing some of the company’s bureaucratic processes frees up many areas to dedicate themselves to the organization’s core activity. Thus, many secondary activities are eliminated that end up distancing professionals from their main tasks.

The reflection of this is an increase in productivity, since employees will no longer work overloaded and will no longer need to take on operational and technical tasks that are outside their main scope of work.

This is all the more valid in Brazil, with a huge workload that generates no value for the company and only meets the expectations of the Brazilian administration.

Leaving these activities to specialists makes it possible to refocus on those that create value such as research and development, marketing, sales, production, etc.

Technical and specific knowledge

Another important advantage of BPO is related to the specific knowledge that an outsourced company can bring to the company.

This is because implementing BPO in certain areas means having qualified professionals with experience and technical knowledge to perform that work.

If the investment is in internal teams, to achieve this excellence of a BPO, it will be necessary to spend a high salary or a high investment in training to develop employees.

With BPO the cost in this regard can be much lower and advantageous.

This is particularly true in Brazil on issues of import bureaucracy and day-to-day business management; to which a foreign company is not accustomed and will spend a lot of money and time to reach the level necessary for a smooth operation.

Compliancy 

Going hand in hand with the previous paragraph, the specific knowledge that a BPO company brings you will allow you to launch a compliant business in view of the Brazilian authorities.

Many businesses start out with a rough knowledge and learn to navigate the law as they go, commenting on mistakes that can count for dearly in a tax audit.

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