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Glossary

What is Business Process Outsourcing?

Business Process Outsourcing is the process of outsourcing the business functions of an organization to a specialized service provider. It is the non-core business processes that organizations prefer to outsource.

With the growing advancements in Information Technology over the past two decades, outsourcing has become a vital part of every business. The biggest benefit of Business process outsourcing (BPO) is that it allows the third party to perform the processes from remote locations at lesser costs. BPO services generally involve back-office operations. These operations include outbound services and inbound services. Outbound services usually include operations like sales processes, while inbound services involve handling processes like customer support and technical support services.

The success of the BPO industry model has led to several high-end services being included in the scope of services. It includes legal process outsourcing, finance and accounting, design and product development, healthcare, and a lot more.

Business Process outsourcing is divided into two main categories:

  1. Back Office BPO- In back-office BPO, the professionals' internal business functions like finance and accounting, human resources, and a lot more.
  2. Front Office BPO- In front office BPO, the professionals offer services related to the customers, such as handling their queries and service requests.

Business process outsourcing offers you a more flexible working environment that helps your business goals efficiently while generating bigger profits. Moreover, it leads your organization to focus on your core competencies and gain unimaginable heights. In most cases, businesses first identify the business processes they like to outsource and outsource them to the third-party vendor.

The major benefits of Business Process Outsourcing include:

Business Process Outsourcing has been gaining popularity due to the benefits it offers to the organization. Here are a few of the advantages of opting for Business Process Outsourcing:

       Access to Skilled Professionals

       Flexibility

       Agility

       Cost-savings

       Competitive Advantage

       Improved Performance

What are the different types of Business Process Outsourcing?

Depending on the service provider’s location, BPO is categorized into these:

  1. Offshore Outsourcing- When an organization outsources its process to the service provider in a foreign country, it is called offshore outsourcing.
  1. Onshore Outsourcing- In onshore outsourcing, an organization outsources the process to the provider within the same country.
  1. Nearshore Outsourcing- When the organization outsources the processes in the neighboring country, it is called nearshore outsourcing.

In many places, business process outsourcing is popular by the name IT-enabled services, also known as ITES. 

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