Difference Between SaaS and BPO Outsourcing Companies

Published 14/01/2022

When automation is considered for scaling up the business, Software as a Service (SaaS) and Business Process Outsourcing (BPO) are often mentioned in the same line, but both are entirely different services.

Under BPO, the outsourced processes are shifted to the service provider. Companies that utilize these services are looking at improving their efficiency rather than the use of specific methods/software. Whereas in SaaS, the authority and responsibility to use the purchased software service remain with the company.

Software as a Service (SaaS)

Software as a service (SaaS) refers to an application serving the end-user through the internet. SaaS works on the cloud distribution/delivery model. A SaaS provider can host the applications on its servers independently or can use a third-party cloud service. SaaS products are available for both B2B and B2C users. 

SaaS applications are generally accessible through web browsers or a small installation possible remotely. Companies using SaaS applications need to pay a fee to the provider. It can be subscription-based or usage-based. 

Why would a business choose SaaS over a BPO? 

  • A company prefers SaaS over BPO if its data storage requirement is limited. 
  • If a company has an urgent requirement of scaling up with a new client, it can purchase a SaaS service.

Business Process Outsourcing

Business process outsourcing (BPO) refers to utilizing third-party services for certain business operations. It involves delegating business processes to an external service provider to manage and streamline these processes. A business process outsourcing company can offer horizontal offerings across specific industries and vertical offerings that demand thorough industry-specific process knowledge.

BPO services are provided across industries with commonly outsourced processes of customer service, accounting, data mining, IT services, payroll, regulatory compliance, and human resources management. 

BPO allows the workforce to remain in their home country while contributing their skills outside the geographical boundaries. It is called offshoring if the service provider is located outside the country, several time zones away, and Nearshoring if the provider is in the neighboring region or one or two time zones away.

How Does the Costing of BPO and SaaS Work?

When it comes to cost, companies using SaaS applications need to pay a fee to the provider. With subscription-based or usage-based monthly or yearly payments, SaaS solutions may be attractive. But when it comes to ROI, companies prefer BPO solutions. Data shows that an efficient BPO provider can reduce operational costs by 30%. 

If a company wants to pay for what it uses and the limited facilities of SaaS providers do not create an issue at all, a company is good to go with SaaS at a minimum cost. 

Another scenario for cost is hiring and training costs. A BPO service provider can mirror your existing business workflow on the cloud. Or, if required, it can customize the workflow and take the responsibility of training. Since the hired team is an expert in its field, it will handle all assigned business tasks with great competency. On the other hand, when the host implements new functionalities to SaaS applications, they are rolled out to all users, due to which companies need to provide extra time and resources for training.

Which is Easier to Implement?

When it comes to quick setup and deployment, SaaS applications win as it is already configured in the cloud. However, with numerous benefits of BPO over SaaS, BPO solutions are the preference of most companies.

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Connect 2 BPO S.A.S is a Business Process Outsourcing company established in 2016. We develop, execute and manage campaigns for businesses around the world.

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