What is Business process outsourcing (BPO)?

Business process outsourcing (BPO) is a process of transferring business functions and activities to other third-party companies, which helps to perform the operational function of an organization by contracting business processes to other vendors. Various multinational companies engage in business process outsourcing for two main areas of work:

  • Front-Office functions, such as customer service/support, inbound and outbound sales, market research, appointment scheduling, and technical support.
  • Back-office functions, such as finance and accounting support, IT services, human resources (HR), quality assurance (QA), data management, and payment processing.

Business process outsourcing is categorized by different types of services being provided to their client on the basis of service level agreement (SLA), such as ITES, KPO, and RPO.

  • ITES (Information Technology Enabled Services) is a business process which has involvement of Information technology in different fields of businesses like Finance, Banking, Insurance, and Telecommunication. This service falls within IT but majorly focused on service delivery functions, such as; service desk, product support, IT support etc.
  • KPO (Knowledge Process Outsourcing) is a subsegment of BPO, wherein those processes which involve knowledge and information are outsourced to third party service providers. KPO’s perform complex tasks for which highly skilled personnel with in-depth knowledge and domain expertise are required. This service majorly focused on, Investment research, Market research, Data analytics and Business research services.
  • RPO (Recruitment Process Outsourcing) is a form of BPO, where an employer/organization transfers the entire recruitment functions to an external service provider. RPO services majorly focused on, Candidate research, Reporting and Audits, Process Mapping, Compliance tracking and Third Party Vendor Management.

Different types of BPO’s: 

  1. Offshore: Outsourcing of business functions or activities to the third party company located overseas countries is known as Offshore BPO.
  2. Nearshore: Outsourcing of business functions or activities to another company located in the nearby country is known as Nearshore BPO.
  3. On-shore: Outsourcing of business functions or activities to the company located in the same country is known On-shore BPO.

Why companies outsource their businesses to other third-party vendor’s?

  • Outsourcing the business process to another company is much more cost effective than doing the in-house work.
  • BPO’s are good in providing better service because handling a process is their primary business.
  • Business outsourcing provides high-quality deliverables and decreases the lead time it takes for a product to reach the marketplace.
  • Outsourcing eliminates the additional investment for infrastructure, as the outsourcing partner takes the responsibility of the business processes.

BPO industry has opened doors for a bright future and promising career, that can help you to enhance your communication as well as professional skills and provides you with fast-growing career opportunities.


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