How to Audit Your BPO Provider?

How to Audit Your BPO Provider? 

If you’re partnering with a Business Process Outsourcing company, you might be outsourcing business processes like accounting and finance, IT systems, and data entry. Acquiring these services from a BPO has allowed you to concentrate your energy on your business’s core functions, and it’s also gained you more time with family and friends. 

However, working together with a BPO to accomplish your business’ day-to-day objectives comes with another responsibility. Besides running your business, it’s equally important to take on the responsibility of auditing your BPO provider to ensure they meet your standards and deliver top-notch services.

What’s Auditing?

Running an audit on your BPO provider does not mean micromanaging them daily. Auditing them means checking if you’re still in alignment with your ongoing terms and business objectives to maintain a mutually beneficial partnership. This would involve initiating thorough examinations or evaluations about the quality of services they are providing for you. This responsibility would require you to look at factors such as compliance, productivity, and efficiency. 

To begin auditing your BPO provider, you typically need to prepare an audit plan, audit criteria, and how to communicate the purpose of the audit. You should also consider the frequency and the scope it will cover every time you conduct audits with your BPO provider. Are your audits going to be bi-monthly spot-checks? Or annual reviews? 

Bear in mind that objectives for an audit may vary, but remember that one of its primary purposes is to avoid potential issues and red flags from arising in your business processes. 

Do I really need to audit my BPO provider? 

The short answer is yes. And the longer answer comes from the fact that part of managing your business is thinking ten steps ahead. One of the ways to achieve that is by being proactive about the effectiveness of your BPO provider’s presence in your business through audits. 

Auditing them will help you stay in control of the outsourcing processes and your business’s future success. Here are five solid reasons why auditing your BPO provider is going to pay off in the long run:

1. It enables you to Assess and Mitigate Risks earlier: Through audits, you can identify operational, financial, and security risks associated with the outsourced processes. Addressing these risks reduces potential disruptions to your business.
   
2. It fosters Transparency and Accountability: Conducting audits encourages transparency in the outsourcing relationship. It shows that you are actively monitoring the provider’s performance, which can lead to increased trust and a stronger partnership.
3. It ensures Compliance: Auditing ensures that the BPO provider adheres to relevant regulations, industry standards, and data protection laws. The risk of legal problems and reputational harm to your company is decreased by adhering to these guidelines.
4. It strengthens Strategic Decision-making: You learn significant details about the effectiveness of your outsourced operations from thorough audit reports. These insights inform strategic decision-making and allow you to optimize your outsourcing strategy to align with your business objectives.
5. It empowers Continuous Improvement: Through auditing, you can provide feedback to the BPO provider, encouraging them to make necessary improvements and refinements to their processes, leading to better service over time.

Which aspects of my BPO Provider’s services should I audit?

Various aspects are checked during audits depending on your contract arrangement with your BPO provider. To get you started, here are seven essentials you can look into when running audits with your BPO provider:

1. Performance against SLAs/KPIs: Productivity, accuracy, response times, and service quality – these are just a few KPIs you can check with your BPO provider. Assess whether they meet the agreed performance targets specified in the Service Level Agreements (SLAs.)
2. Data Security and Confidentiality: Review security measures put in place by the BPO provider that currently protect your sensitive data and confidentiality. Security measures include access controls, data encryption, and compliance with relevant data protection regulations.
3. Process Adherence: Examine whether the BPO provider follows the agreed-upon processes and workflows. This ensures that tasks are performed consistently and per your business requirements.
4. Financial and Contractual Compliance: Review financial records and invoices to ensure accuracy and compliance with the contractual terms.
5. Process Documentation: The adequacy and completeness of process documentation are evaluated to ensure that critical procedures are well-documented and can be followed consistently.
6. Customer Satisfaction and Feedback: Gather feedback from customers or stakeholders to assess their satisfaction levels with the BPO services and identify areas for improvement.
7. Vendor Management and Governance: The BPO provider’s overall vendor management and governance practices are assessed to evaluate their ability to manage risks and deliver value.

Ready to Audit Your BPO? Here’s What You’ll Need!

As a responsible client, careful planning and organization are pivotal for a comprehensive and effective audit. By thoroughly preparing these essential elements, you’ll be well-equipped to conduct a successful audit of your BPO provider.

1. Audit Guidelines: Clearly define the objectives and scope of the audit by outlining specific areas (typically the most critical aspects of the BPO services) and processes you intend to audit.
2. Communication Plan: Establish a communication plan by being transparent to the BPO provider about the upcoming audit, its objectives, and the audit process.’
3. Audit Plan and Checklist: Develop a detailed audit plan that includes the timeline, audit team members (if applicable), and the activities to be performed.
4. Audit Reporting Format: Decide on the structure of your audit report. The format of your report can include a summary of findings, recommendations, and any action plans to address identified issues.
5. Interview Questions: Write your own list of questions to gain insights into BPO provider’s processes, training practices, and overall performance. You can also add queries related to set KPIs agreed to meet your business goals. Your KPIs can be quality metrics such as productivity, accuracy, customer satisfaction, and adherence to timelines.
6. Processes and Procedures Review: Verify that all procedures, policies, and customer service processes are well-defined, well-documented, understandable, and easily accessible to everyone on your team. Determine whether each step in processes and procedures are necessary and relevant.
7. Previous Audit Reports (if available): If previous audits were conducted, review the findings and recommendations from those reports. This will help track the provider’s progress in addressing past issues.
8. Legal and Compliance Requirements: Ensure your BPO provider complies with relevant regulations and standards. This includes the security of sensitive data, financial records, payroll, HR policies, health and safety, environmental impact, and quality management standards.

Are you feeling Confident now to Audit your BPO?

Remember that auditing your BPO is crucial for ensuring transparency, efficiency, and compliance with industry standards. With a comprehensive audit, you can have peace of mind, knowing that your BPO is operating optimally for your business objectives, allowing you to focus on your core functions and growth. 

If you’re looking for a BPO provider whose priority considers both your peace of mind and your business goals, explore Booth & Partners‘ Managed Solutions and Talent Solutions with prepared and eager teams to welcome your audits. Get in touch with us here.