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Importance Of Business Process Outsourcing In Modern Era

Business Process Outsourcing

Business Process Outsourcing is not a strange phrase among businesses. It has gained wide popularity in the last two decades.

First of all we need to know What is Business Process Outsourcing (BPO) and why is it in great demand nowadays? You must have heard or come across this term sometime in your life. It is but obvious to have curiosity to know as to what BPO is and what are its basic functions.

         So, in this article we are going to delve deep into some of the basic questions you have sometimes grappled with or grappling about this term.

         Therefore, starting with the definition of BPO, it stands for Business Process Outsourcing (BPO). Now, in order to understand the meaning in simple terms, it can be said that any large-scale company cannot carry out all its functions and operations on its own. So, it outsources its non-primary business activities and functions to some third-party service provider on contract basis. The third-party service provider to which the said functions are outsourced is called BPO.

It is important to understand that BPO is an umbrella term generally used for a cluster of service providers which, most of the time, function at the backdrop.     

How does Business Process Outsourcing work? And types of BPOs

 In terms of outsourcing functions and operations, Business Process Outsourcing (BPO) can be mainly bifurcated into two services i.e. Back office and front office services. Back office functions may be called internal business functions which may incorporate human resource (HR), accounting, quality assurance (QA), information technology (IT) etc. On the other hand, front office functions may include sales, customer relation services, marketing etc.

  In this way, BPO provides an array of services such as 

(i) Human resource which includes payroll, recruitment and training, 

(ii) Customer care services which cover marketing, direct customer communication etc., 

(iii) Finance and accounting, which ensure handling the financial accounting process, reports and auditing 

(iv) Information technology supports the developing and implementing software and hardware etc.

 Is BPO a call centre?

 It has been noticed that people interchangeably use the term BPO and Call Centre or it can be said BPO has become the synonym of the Call Centre. However, we need to understand the difference between the two. Broadly speaking, the main difference is that the BPO performs back office as well as front office tasks, as mentioned above, of a given company which includes a variety of functions, whereas telephone calls/tele-calling (call centre) is one of those functions. So, it is clear that a call centre is a BPO but all BPOs are not call centres.

Opportunities in BPO

 In today’s scenario, domestic and international companies are outsourcing their services mostly to Asian based BPOs, there are tremendous career opportunities in them. Therefore, BPOs engage people to provide services to their client companies. Be it fresher or experienced, there is enough scope for both kinds of candidates in BPOs. One can get into a BPO right after school or college. BPO is providing an international environment with handsome salary packages and perks. 

Advantages of BPO

 Business Process Outsourcing enables the client companies to focus and concentrate on their core competency or core business because a significant part of their business is outsourced, the top brass of the company can focus their attention on key operational areas. One more benefit of outsourcing the process is that the cost of labour decreases, but the quality of the work is maintained. 

Benefits of BPO

When it comes to the benefits of BPO so there is a big list of its benefits. Starting with cost benefits, a company may get its job done at considerably lower cost but with better quality. For example, in western countries the rate of wages is higher compared to Asian countries. This is why they outsource their processes to the said countries and save up to 30 percent of the cost.

Second, it eliminates not only the tension of infrastructure required for these services, but also the hefty investment to develop the same. Since, the outsourcing associates have taken the responsibilities of all such concerns on their own shoulders.

Third, it also saves the expenses of recruitment and training for the business as the outsourcing partners employ highly skilled resources. 


 Having discussed the above-mentioned points we reach the conclusion that a BPO is a third-party service provider which helps the client company in its non-primary functions and operations. BPO provides back office and front office service at competitive cost. By outsourcing some of its functions a client company is able to focus on its core competency and core business which results in better productivity. All in all, BPOs have become an inevitable part of the industrial world in the 21st century and will continue to assist client companies to grow by leaps and bounds.  








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