Document Processing: BPO or Inhouse?

March 12, 2025

Companies are increasingly turning to automation to streamline their operations, reduce costs, and improve accuracy. One such area that has benefitted from automation is document processing. From managing invoices to processing order confirmations, shipping notices and other critical transactional documents, automating these tasks can significantly enhance efficiency. However, businesses must decide whether to handle document processing in-house or outsource it to a Business Process Outsourcing (BPO) provider. This decision often hinges on several factors, including cost, scalability, and the ability to leverage specialised expertise. In this blog post, we will explore the pros and cons of outsourced document processing versus inhouse, and how Intelligent Document Processing (IDP) can serve as a powerful solution to meet modern business needs.

What Is BPO (Business Process Outsourcing)?

Business Process Outsourcing (BPO) refers to the practice of contracting specific business operations or processes to an external service provider. BPO typically includes non-core functions like customer support, IT services, HR management, and document processing. The outsourcing company handles these tasks on behalf of the business, often from a different location, and the business receives the benefit of expertise, cost savings, and operational efficiency.

In What Business Context Is BPO Used?

BPO is utilised across various business contexts, but it is especially prevalent in sectors that deal with large volumes of data or require repetitive administrative tasks. Document processing, for instance, is a core process for many industries, including healthcare, logistics, and manufacturing. Many businesses choose to outsource document management tasks, such as invoice processing and data entry, to BPO providers to save time, reduce operational costs, and focus on their core competencies.

What is DPO (Document Process Outsourcing)?

Document Process Outsourcing (DPO) is a specialised form of BPO that focuses on managing document workflows. This includes data extraction, validation, processing and exporting as well as archiving of documents. By outsourcing these processes, businesses can improve accuracy, ensure compliance, and reduce the time spent managing B2B documents.

Benefits of BPO for Companies

The benefits of BPO are clear, especially when it comes to document processing. Some of the key advantages include:

Cost Savings: Outsourcing to countries with lower labour costs such as India, the Philippines, China, and Eastern Europe can significantly reduce operational expenses.

Scalability: Outsourcing allows businesses to scale their operations up or down depending on seasonal demand or project needs, without the need to hire and train new employees.

Expertise: BPO providers specialise in specific functions like document management, which means companies can benefit from advanced technologies and industry-specific knowledge.

Focus on Core Competencies: By outsourcing non-core functions, businesses can concentrate on activities that directly impact their bottom line.

Disadvantages and Risks of BPO

Despite its advantages, BPO also comes with several challenges and risks:

Loss of Control: Outsourcing critical business functions may result in a loss of direct control over the process, which can lead to issues with quality and service consistency.

Security Concerns: Outsourcing often involves sharing sensitive data with external providers, which raises concerns about data security and privacy.

Hidden Costs: While outsourcing can save money upfront, there may be hidden costs related to management, monitoring, and contract negotiations.

Cultural and Language Barriers: In some cases, outsourcing to offshore providers can lead to communication challenges due to differences in language, culture, or time zones.

Pros of Inhouse Document Processing

Complete Control: With inhouse document processing, businesses maintain full control over the entire process, ensuring that it aligns with their internal policies, standards, and timelines. There is no reliance on external providers, which means that issues can be addressed more quickly.

Customisation: In-house systems can be tailored to meet the specific needs of the business, offering more flexibility to accommodate unique workflows or requirements.

Instant Access to Information: Employees can quickly access documents as needed, without waiting for external parties to retrieve or process them, improving workflow efficiency.

Avoid Third-Party Fees: By handling document processing internally, businesses avoid paying outsourcing fees, which may accumulate over time and impact the bottom line.

Cons of Inhouse Document Processing

Upfront Costs: Establishing an in-house on-premise document processing system often requires investment in technology, infrastructure, and employee training.

Ongoing Maintenance: Businesses are responsible for maintaining and upgrading the on-premise systems used for document processing, which can add ongoing costs for IT support, system updates, and hardware.

Resource Allocation: Businesses must allocate internal resources, including labour and time, to manage document processing. This can divert attention from more strategic, revenue-generating tasks and hinder overall business performance.

Complexity in Handling Various Document Types: Some documents may require specialised handling, such as invoices, contracts, or medical records. In-house teams may struggle to manage diverse document types efficiently without additional expertise or technology.

Human Error: Inhouse document processing is prone to human error, especially when it involves manual data entry or review. Even minor mistakes can lead to delays, compliance issues, or financial discrepancies, which can be costly.

The Netfira Platform: An Intelligent Inhouse Document Processing Solution

The Netfira Platform is a flexible Intelligent Document Processing (IDP) software solution which enables businesses to automate and streamline their document processing processes in-house. It comprises several characteristics and functionalities which make it a powerful alternative to traditional on-premise software solutions or BPO providers.

A Cloud IDP solution: The Netfira Platform is a cloud hosted Software-as-a-Service (SaaS) solution. It allows companies to automate document processing tasks without the need to manage on-premise hardware, maintenance or updates. In contrast to on-premise solutions, cloud IDP solutions prove to be more agile, flexible and simple.

The Advantages of SaaS

Easy configuration  

Companies do not need an internal server infrastructure and do not need to install and run the application on their systems. Besides, the application can be easily scaled if needed.  

No maintenance required by internal IT  

Netfira is responsible for the maintenance and security aspects of the software, relieving IT departments and allowing users to relax.  

Automatic updates

As SaaS is web-based, users and IT benefit from Netfira automatically updating the software on a quarterly basis. Internal IT does not have to constantly implement new versions or patches. 

Low costs  

Because organisations do not need to install and run the SaaS solution on their systems, there is no need to invest in hardware and licences, and the costs associated with maintenance and support are significantly reduced. Initial set-up costs for the Netfira Platform are also low. On top of that, Netfira offers a pricing structure based on usage and features.

End-to-End Automation with the Netfira Platform

The Netfira Platform provides end-to-end automation for the processing of transactional documents such as order confirmations, invoices or customer orders. Orchestrating document processing workflows, the Netfira Platform seamlessly extracts and validates data from documents, processes it with customisable workflows and exports clean and structured data into any downstream system, such as ERP, CRM or accounting system.

Customisable Workflows

Understanding that each business has unique operational needs and processes, the Netfira Platform offers customisable workflows to process B2B documents. Rather than making businesses conform to a standard software process, Netfira Workflows empower companies to tailor the platform to fit their specific requirements. Netfira’s workflows offer businesses full transparency and control over their automation processes. Companies can customise every aspect, from notifications and exception handling to human intervention points. With this flexibility, businesses can tailor processes to specific document types and situations.

BPO or Inhouse: The Smart Way of Document Processing with the Netfira Platform

There is no definitive answer whether businesses should opt for BPO providers or inhouse solutions for document processing. Both BPO and traditional in-house solutions come with advantages and disadvantages – often it depends on business needs and the situation which option is more worthwhile.

At the same time, the Netfira Platform as a cloud IDP solution tips the scales in favour of in-house solutions. With the implementation of the automation software solution from Netfira, document processes can be streamlined, operational efficiency increased, and manual tasks reduced to a minimum. The SaaS IDP solution offers scalability, short implementation times, low costs, and relief for internal IT teams. Teams have full transparency and control over their document processes and benefit from the highest data security compliant with GDPR and adhering to ISO guidelines. The Netfira Platform’s features and functionalities are highly customisable and can adapt to specific requirements for document types or business processes. Thanks to Netfira’s end-to-end automation, teams are freed of manual data entry, comparison and validation, granting them more time to focus on strategic and value-adding tasks. Therefore, the Netfira Platform makes managing transactional documents in-house a value-add to operations.