What is Business Process Outsourcing for the Construction Industry?

Business Process Outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider. 

For the purpose of this article, we will only concern ourselves with back-office Business Process Outsourcing, meaning engineers, draftsmen, accountants, bookkeepers, buyers, schedulers, and general administrative support, and not executives, project managers, sales representatives, or job site labor.

Business processes in the Construction Industry refer to various scopes of work during different stages of a project. For example, a typical construction project has four (4) primary stages: Design, Tendering, Construction, and Handover / Warranty Period.

The work process during the Design Stage is the illustration, drawing and modeling of a proposed building, broken down into various sections and responsibilities. The staff required during this stage will primarily be civil and mechanical engineers and CAD/BIM draftsmen.

The work process during the Tendering Stage involves analyzing drawings, calculating quantities and labor needs, obtaining pricing from vendors and sub-contractors, and preparing budgets and a final bid. The staff required during this stage will primarily be civil and mechanical engineers and general administrative support (buyers, bookkeepers, schedulers, safety planners).

During the Construction Stage, the engineers will still be required during the first half of the project, but demand will taper off as the structure and façade work winds down. It is during this stage when there is strong demand for draftsmen and administrative support staff to handle numerous processes from shop drawings, planning, purchasing, scheduling, invoicing, and payments.

And finally, the work process during Handover and the Warranty Period will be similar to the Construction Stage but with fewer staff. The staff required during this stage will be an administrative coordinator to handle client change orders and complaints, a draftsman or two, and general administrative people to compile as-built drawings and all submittals, review accounts and change orders, and close out A/R and A/P accounts.

In conclusion, there are a lot of work processes on a construction project which may be outsourced, and thus a lot of opportunity for companies that utilize the services of a Business Process Outsourcing provider to save time, save money and improve operational efficiencies.