What is Business Process Outsourcing (BPO)?

Whether you're a beginner or an expert, you will find this Glossary useful.

Business process outsourcing is a term which refers to a process of hiring other companies to do the set of business activities or a single function related to the company's business.

what-is-business-process-outsourcing-bpo

Definition of Business process outsourcing (BPO)

Business process outsourcing is a term which refers to a process of hiring other companies to do the set of business activities or a single function related to the company's business. It allows companies to save cost and focus on core activities.

 When the company taking over responsibility for a function is located abroad a term ''offshoring'' may be used.

Types of business process outsourcing

1. Back-office outsourcing: outsourcing of internal business functions like payroll, HR, etc.

2. Front-office outsourcing: outsourcing of customer related processes like technical support, maintenance etc.

Pros and cons of business process outsourcing

Pros:

1. Focus on core competency

2. Cost reduction

3. Business process efficiency increasement

4. Focused teams solving problems

Cons

1. Third party vendors dependance

2. Lack of complete knowledge of product/service

3. Less focus on quality due to lower cost offerings through outsourcing


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