What is Business Process Outsourcing (BPO)?

What is Business Process Outsourcing (BPO)?

Business process outsourcing (BPO) is the delegation of at least one or more information technology-intensive business processes to an external service provider who then owns, administers, and manages the selected processes according to defined and measurable performance metrics. BPO is often referred to as “outsourcing” or “offshoring” the business process.

Definition

Business Process Outsourcing (BPO) is a business model where companies outsource their non-core activities to service providers. These BPO services providers may be internal or external.

According to Gartner, the following are the four major characteristics of a BPo model:

  •  A third party performs work that was previously performed internally
  •  Work is performed using a combination of internal employees and external providers
  •  An organization delegates specific activities rather than entire business processes
  •  The organization measures the results of delegated work

Benefits

The following are some of the benefits associated with BPO:

  •  Cost savings
  •  Improved quality and efficiency
  •  Quality Assurance
  •  Customer Service

Cost Savings

Businesses have been outsourcing their business processes for years now and they continue to do so. There are many reasons why businesses outsource their processes including cost savings, time savings, efficiency, and quality assurance.

Improved quality and efficiency

Outsourced services allow companies to increase productivity while still maintaining a high level of customer service. Companies can easily scale their operations without having to hire additional employees, which saves them money. Additionally, outsourced services help companies maintain consistency and standardization across the board.

Quality Assurance

Quality assurance is extremely important for any company especially if they are selling products online. Customers expect a certain level of quality and if something goes wrong, it could lead to lost sales and customers leaving the site. By outsourcing these tasks, companies can ensure that their product meets the standards set by the brand and they don’t have to worry about the quality of their product.

Customer Service

Customer service is a huge factor in the success of any company. If a customer has a problem, they need someone who can take care of it immediately and efficiently. By outsourcing customer service, companies can save time and money and offer a higher level of customer service than they would otherwise.

What’s BPO used for?

Associations engage in business process outsourcing for two main areas of work back- office functions and frontal-office functions.

Back-office functions, occasionally called internal business functions, comprise support operations including account, information technology( IT) services, mortal coffers( HR), quality assurance, and payment processing.

Front-office functions are processes and business operations that serve or relate to being implicit guests, similar to client relation services, marketing, and deals.

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