Business Process Outsourcing (BPO) is the act of contracting the operations and non-primary business activities and functions to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for non-critical functions so company owners or managers can focus on the core functions and create competitive advantage.
There are Two (2) Categories of BPO: Back-Office and Front-Office. Back-Office outsourcing includes internal business functions such as human resources, finance, accounting, and purchasing while Front-Office outsourcing includes customer-related services such as marketing and technical support.
Back-Office tasks are essential to help run the business efficiently. These tasks include data entry, data management, accounting support, research, surveys, payment processing and quality assurance. Front-Office outsourcing services normally deal with customer interface and interactions. These tasks include phone calls, email, fax, chat or online communications with customers that are usually used in Telemarketing, Customer Service, Technical Support, Appointment Scheduling, Inbound/Outbound Sales and Market Research.
BPO that is contracted outside a company’s own country is called Offshore Outsourcing, while BPO that is contracted to a company’s neighboring country is called NearShore Outsourcing, and BPO that is contracted with the company’s own county is called Onshore Outsourcing.