Why Business Process Outsourcing might be the right move for your credit union

Outsourcing. Other than automation, no other word in business probably creates more angst in the minds of employees than those two. Rightfully so, as they are commonly associated with negative outcomes for employees. However, with my best ESPN 30 For 30 impersonation, “What if I told you,” there truly is value for both employees and organizations for outsourcing.

What is Business Process Outsourcing?

Business Process Outsourcing or “BPO” is when an organization outsources specific business functions to a 3rd party service provider. BPO does not always mean “Offshoring,” where companies send work abroad to countries where the costs of doing business are much cheaper than domestically. Business Process Outsourcing simply means an organization has outsourced a process or steps in a process to an external entity. Common examples of a business outsourcing some of their operations are: Call Center, Accounting, and Human Resources.

Why BPO? What are the Benefits of BPO?

You’re still wondering: what are the value and benefits of BPO? Before we can dive into the benefits of BPO, let’s first address why your company should implement BPO at your credit union. The goal of BPO is so your core team can resolve high-priority matters for your members. BPO frees up your employees’ time so they can focus on building relationships with your members.

Benefits:

Costs Reduction

One of the primary benefits is lower cost. Credit unions have the ability to reduce or eliminate overhead costs with BPO.

Focus on Core Business Functions

Let’s face it, sometimes ancillary business activities at our credit union take up too much of our time. Outsourcing some of those tasks gives your credit union more time to focus on your core business functions.

Efficiency

A BPO organization is likely more experienced in specific industries, which allows them to perform at higher levels. Higher performance and higher productivity = more money for your credit union.

The Success of BPO for a Credit Union

Many credit unions have seen record demand and growth for lending in the past year. Sprinkle in a job market hotter than this holiday’s hot chocolate, and you have quite the recipe. This recipe created a very big lending backlog for a credit union. This ultimately placed them in a dire situation with not only their local auto dealership partners but, most importantly, their loyal membership base.

Within a few weeks’ timeframe, BPO was able to turn this backlog into a profit machine for this credit union. The resources of BPO allowed dealers and members to receive same-day approval and funding. After a few months of record growth, BPO started being implemented in other departments outside of lending so their staff could focus on core functions and member relationships at the credit union.

Is BPO a Fit for my Credit Union?

Understand that BPO is a la carte; it is not a one size fits all. Just as your members utilize your products and services in their journey, so should your credit union with BPO. Look into the mirror and ask, “What are we good at? Where should we be spending more of our time?” Explore what processes could be outsourced and identify your core business functions.