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.
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
1. Focus on core competency
2. Cost reduction
3. Business process efficiency increasement
4. Focused teams solving problems
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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