Business process outsourcing (BPO) is the contracting of a specific business task, such as payroll, human resources (HR) or accounting, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain their position in the marketplace.
Two categories BPO is often divided into are back office outsourcing, which includes internal business functions such as billing or purchasing, and front office outsourcing, which includes customer-related services such as marketing or tech support. Back office outsourcing offers organizations services to help manage tasks like data entry, data management, surveys, payment processing, quality assurance and accounting support. Back office tasks are integral to a company’s core business process and help keep business running smoothly.
Front office outsourcing services deal with customer interactions. Examples of front office tasks include phone conversations, email, fax and other forms of communication with customers. Front office outsourcing providers’ service lists include:
- Customer service/support
- Technical support/help desk
- Appointment scheduling
- Inbound/outbound sales
- Market research
BPO that is contracted outside a company’s own country is sometimes called offshore outsourcing. BPO that is contracted to a company’s neighboring country is sometimes called nearshore outsourcing, and BPO that is contracted with the company’s own county is sometimes called onshore outsourcing.