The Internet Revolution started off some cascading effects in Information Technology; Business Process Outsourcing (BPO) is one of them. The word identifies the method of using third-party services to take care of your business operations that require fine-tuned skills. In its earliest form, business process outsourcing applied mainly to manufacturing companies for e.g. soft drinks manufacturers who used outsourcing because of their supply chain systems; however, since technology practically overran the world, it now applies to a bunch of services chiefly utilising the Internet to perform tasks.
The term ‘Outsourcing’ became a much used buzzword in corporate circles in the mid 1990s. Outsourcing means the process where in fact the services of a third-party service provider are contracted for various business operations National Legal Staffing Support LLC. Coinciding with the Internet revolution, BPO came to indicate the process of ‘leveraging the skills and expertise of technology vendors in low-cost economies to perform internal tasks that were when the responsibility of a particular business enterprise’ ;.Simply put, it denoted the process of shifting internal job functions or delegation of non-core operational jobs to an external company (contractor or sub-contractor) to an external company in an alternative geographical location which specialized in a particular process or operation. Outsourcing helped businesses focus more on core competencies and gain advantages by saving on infrastructure and staffing costs. These vendors established ‘call centers or help centers’ in their own countries built with infrastructure and staffing; the whole setup was contracted to the business providing the job. The processes outsourced within BPO included data entry, billing, medical transcription, payroll processing etc. The outsourcing process suited first-world nations such as the USA, UK and Europe that transferred jobs to third-world countries primarily in Asia like India, China, Malaysia, Philippines etc. By outsourcing, they benefitted from paying low wages and salaries to contracted labor rather than pay high cost salaries and benefits to in-house or local employees.
Business Process Outsourcing (BPO) can also be generally referred to as ‘offshore outsourcing’ because the outsourcing process is sent to a different country. The word ‘near shore outsourcing’ can be used to refer business operations outsourced to a neighboring country.
Business Process Outsourcing (BPO) used to be referred to as a part of the outsourcing process which involved the operations and responsibilities of specific business applications and processes to a contracted third-party service provider; it’s now used more in the context of Information Technology Enabled Services (ITeS).
Typically, BPO is categorized as front-end outsourcing to denote areas involving customer-centric services like contact centers, billing centers etc.; the back-end outsourcing indicates internal business area functions of a business like accounting, finance, human resources etc.
Quite often, BPO services involve IT and ITeS; two important sub-segments of the BPO industry are Knowledge Process Outsourcing (KPO) and Legal Process Outsourcing (LPO).