What does that even stand for? BPO stands for Business Process Outsourcing. Let’s clear that up first and foremost.
Whenever we spend time speaking to a prospective client, this is the first thing we have to address. What do those 3 letters stand for?
Now that we’ve cleared that up, let’s talk about why a company might considering looking to use a BPO partner specifically for ERP implementation.
- Expansion to other markets
- Multiple currency accounting
- A need to make better business decisions based on company financials and a lack of a view into them with existing bookkeeping solution
A company’s financials will grow out of its existing bookkeeping solution making it difficult to view the whole story for businesses financials as soon as they look to add a new location.
The reasons referenced above and so many others lead companies to look for an ERP (Enterprise Resource Planning) solution. However, herein lies an issue. ERP’s are expensive. In fact, when searching online for the top ERP solutions for growth businesses, we find a laundry list of options and costs.
A small business can spend between $10,000 to $150,000 implementing an ERP system. And if the price should hang out in the low range..be sure to budget resource training time, and transition.
The point is, many small businesses won’t implement an ERP as a rule. They will leverage a bookkeeping solution and various disparate SaaS solutions pieced together to run their business. And this will not help them to plan and project their business over time.
BPO allows companies to solve this dilemma.
What are the benefits of BPO?
Cost is the biggest benefit of outsourcing business process.
When a company strategically moves in the direction of an ERP solution, distraction is bound to cost money. They will also sit in planning meetings thinking up how the tool to impact the business. Company’s will spend time learning how to consolidate financials. They will need help.
Some benefits of BPO for a growth company as it relates to finance are;
- Scale internationally without being limited by financial systems.
- Leverage best in class solutions to allow visibility into finances, as well as on-demand reporting, analytics on real time data, and specialized capabilities such as revenue recognition that typically have to be bolted on to other solutions.
By working with a BPO partner who provides a NetSuite solution (in our case) or an FP&A solution (also something that we provide), all of those considerations are taken into consideration.
Why Work with a BPO Partner
A BPO solution provider
- implements best practices
- leverages experience to implement the solution
- and then provide the man-power to run it.
For the price of one full time controller (often times) companies can outsource their entire finance function and get the benefit of a world-class ERP by going the BPO route.
Further than that, companies who have valuable staff who they would like to remove burden from, then leveraging a BPO solution could be a fit.
Most growth companies will hire out a virtual finance executive to build a financial plan or model within Excel which can break. And if that executive should look to use a best of breed solution for Financial Planning & Analysis (such as our partner Prophix) then they will be looking at mounting software costs to run that tool.
When it comes down to it, BPO lets companies access BEST OF BREED technology combined with top of the line talent.
It makes sense.