Business Process Outsourcing (BPO)
Business process outsourcing (BPO) is a part of outsourcing industry that involves contracting of operations and responsibilities of a specific business task to a third party service provider. To make it more simpler it is the process of hiring a different company to manage certain business opportunities for your company. Business Process Outsourcing is different from the IT outsourcing that focuses on hiring a third party service provider or a third party company for IT related tasks.
Traditionally,business process outsourcing was done only by manufacturing firms, however today the outsourcing is also done by service oriented industries such as the banks.
The tasks that are outsourced are important, but certainly not the show stoppers for the company. Earlier, BPO consisted of outsourcing process such as payroll. Then it experienced growth and also included employee benefits management. Now, BPO has increased enormously and it performs many important tasks such as Financial and Administration processes, Human Resources functions, Accounting and Payroll, Customer Service centers and call centers.
BPO is often divided into two categories:
1. Back office outsourcing that includes internal business functions like billing or purchasing.
2. Front Office outsourcing that are customer-related services like technical support and marketing.
Many of the BPO's involves hiring a company that is based in other country to do the work, this is called offshore outsourcing. The most popular location for the BPO activities is India. The outsourcing deals has a long term contract, which lasts for many years and amount for hundreds of millions of dollars. Dominant business process outsourcing providers are Accenture, Capgemini, Genpact, IBM, Infosys, Wipro and TCS.
BPO is frequently referred to as ITES (information technology enabled services). A descendant, of BPO is KPO, which is also fast becoming very popular. KPO (Knowledge process outsourcing) includes activities that require higher skills, knowledge, education and expertise. This includes R&D (research and development), product development, legal work and many business function.
BPO industry today is a huge industry employing a vast number of population and is riding high on success.
If you are interested in learning more about business process outsourcing, please search our site for more in-depth information and resources.
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