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What is the Business Process Outsourcing Meaning

The modern Business landscape is filled with many moving parts that require dynamic technology, globalization, and organizational structure. In this complex business environment, proper business process outsourcing (BPO) has been identified as a pivotal resource to enhance your efficiency. 

Understandably, every business is fixated on finding the perfect balance between adaptation and problem-solving, ensuring business success. This reactive approach to business problems is not a sustainable business strategy. 

Therefore, adopting a business processing outsourcing model is a cost-effective solution to filling skill gaps and other essential roles to streamline your business operation effectively in this ultra-competitive market. In this article, we will be exploring the foundational definition of BPO and its various examples. 

What is Business Process Outsourcing (BPO)

Business process outsourcing, or BPO, is hiring another company to perform non-core business functions for your company. In other words, you are contracting out some non-primary business operations or processes to another third-party firm. Business process outsourcing is an effective means to get off the clutch of skill attrition that can hold back your business operations. 

With BPO, you can outsource business tasks you feel your in-house expertise can not cover, such as social media marketing, customer services, human resources, data entry, etc. Traditionally, business process outsourcing can be categorized into two categories: back-office and front-office. 

Back-office outsourcing deals primarily with in-house business operations like payroll, billings, and other related tasks, while front-office outsourcing handles tasks like tech support, customer support, and others.  

At the same time, you can browse the differences between BPO vs KPO, so as to explore the relevant knowledge of BOP more deeply.

Types of Business Process Outsourcing (BPO)

To a layman, outsourcing is all about offshore outsourcing, where they hire only foreign companies. This is a general misconception because there are other types of business process outsourcing than that. Hence, the other types of BPO include:

  • Offshore outsourcing: This is the most popular type of BPO, where your company hires another company that is located overseas to carry out their business processes. Example is when an Indian company outsourcing to the United Kingdom.

  • Nearshore outsourcing is closely related to offshore, companies outsource specific work requirements to another company in a neighboring company. For example, a Canadian company is outsourcing to a US-based company.

  • Onshore/Domestic Outsourcing: When you outsource to another company within your home country. For instance, a Brazilian company is outsourcing to a Brazilian-based BPO firm. 

Importance of BPO in Business Operations

Your business stands to gain a lot by outsourcing some non-primary business processes. These are important to achieve your overall business goals and simultaneously have a fast-paced and efficient business environment. The following are the importance of business process outsourcing in business operations.

1. Cost Efficiency

According to Deloitte's global outsourcing survey 2020, cost efficiency is the number one reason companies opt for outsourcing business operations. Most of them stated that hiring a third party costs less than completing some tasks in-house. 

This practice was further reinforced by the economic uncertainty that engulfs the global business landscape. Another consideration is the work quality. Currently, the success ratio of business process outsourcing firms is at an all time high. Therefore, you can trust them to do a similar job, if not a better job than your in-house team. 

2. Focus on Core Competencies

Business process outsourcing helps you focus on the core competencies. This is possible when you outsource the non-core aspect of your business to an external service provider, providing you with much better opportunities to focus on the major ones. Outsourcing enables the proper investment of the larger chunk of your resources in the core business processes. 

3. Access to Specialized Skills

Working with business process outsourcing firms will provide unfiltered access to specialized skills and knowledge. This ensure your business stays productive and competitive. 

The other benefit of this to your business is that you also enjoy the BPO’s wealth of experience garnered from performing specific tasks for other companies like yours. Another thing is that you can onboard them on your team in a fraction of the time it would take to hire and train a team of employees.  


Examples of Business Process Outsourcing Solutions

This section explains the five core business process outsourcing (BPO) examples: finance, customer service, payroll, IT support, and payroll management. Business process outsourcing solutions boast of many other solutions like sales, accounts payable, and marketing. 

1. Supply Chain Management 

Supply chain management involves the total control of the production processes and flow in product manufacturing. This is a complicated process involving the administration of raw materials and ensuring the uncompromised process of turning raw materials into finished products. Any form of incompetency in this process can have a detrimental effect on the company's moral, market and legal standing. 

Supply chain management is a delicate  procedure that only a reputable and experienced BPO company should be trusted. As a company that intends to outsource its supply chain management to a BPO company, it is imperative to check the competency of such a company in the following practices: legal counsel, quality control, sourcing, payment processing, and others.  

2. Customer Support Outsourcing

Customer support tends to the yearnings and needs of your customers. It is wrong to undermine the crucial role of this aspect in making your customers have the best customer experience by ensuring they are satisfied with your product and services. 

In some cases, the customer service representative also answers crucial questions regarding your products as well as resolves issues related to the company. Over the years, studies have cited 24/7 round-the-clock availability as the most excellent form of customer satisfaction.  

When customers can reach your company anytime, they love your products more and feel a sense of belonging. However, not all businesses have the funds, time, and resources to support customers 24/7, thereby resorting to customer service outsourcing. 

3. IT Support and Infrastructure Management Outsourcing

Information technology (IT) support and infrastructural management ensure the continuous operation of your business through system maintenance, software installations, network monitoring, and others. 

We are in an age where you can not function without these essential services. Capitalizing on the global IT outsourcing market can save you money and time while ensuring your business's uninterrupted operation. You must consider the proper fit and the regulation compliance of the business process outsourcing company to which you plan to outsource your IT support service. 

4. Payroll Management 

Its obvious the number of processes and time that goes into processing payroll. This vital aspect of your business involves appropriating and disseminating wages and taxes to your workers and government agencies. 

Payroll management requires a high level of expertise and considerable experience in listing the number of employees and ranking them based on their employment status for payment. 

That is not all; payroll management also includes adequate record keeping and the estimated number of taxes your company should pay quarterly. In a nutshell, payroll management outsourcing is a must for small and medium-scale businesses and, to some extent, well-established firms. 

This is because payroll management requires high level expertise in the field to execute your work adequately without glitches and financial risks. Over the years, most companies have developed the habit of outsourcing this crucial procedure to reputable BPO companies to save time and money and reduce any payroll error, among others. 

5. Administrative Tasks

Administrative tasks are integral part of every business that requires the utmost attention and expertise. These are the core units of operations and departments performing essential duties for the smooth running of your business. 

Administrative tasks include human resources, legal affairs, research, finance, and accounting. It's well established that outsourcing every task to a third-party company will compound the smooth tidings of your business, such as lower overhead costs, access to in-depth reports, and quality expertise.   

Business Process Outsourcing Best Practices

To enjoy the full benefit of business process outsourcing, it is essential you adhere to some of the following best practices

  • Define your business goals and purpose

  • Optimize your knowledge management process

  • Define your key performance index

  • Identify and assess your BPO service provider

  • Take your time to implement change management strategies

  • Create an exceptional introduction with your BPO service provider

  • Identify and prepare for risks associated with outsourcing


Business process outsourcing has proven to be the biggest hack for business success and a great tool to scale your business to the next level. Understanding the meaning and the overall dealings in this sector can be a key to accessing a broad range of expertise, skills, experience, and knowledge. 

Considering the examples outlined above, it's clear that business process outsourcing is an all-encompassing industry that offers many opportunities to improve your customer service, optimize your IT support, perform efficient administrative tasks, and more.

In this dynamic field, choose Helpor, your trusted partner, to help you achieve excellent outsourcing services and ensure the efficient operation of your business processes. Ultimately, outsourcing your business processes requires maximum compliance with best practices to prevent you from falling into the trap of outsourcing inefficiencies.

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