Home General What Is BPO – Types, Examples, and Benefits

What Is BPO – Types, Examples, and Benefits

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BPO, Business Process Outsourcing, has emerged as a popular solution as businesses aim to maximise efficiency, cut costs, and scale operations. It stands apart from other forms of outsourcing by taking a more precise approach in delegating entire business functions to a third-party provider. 

Explore the following diverse outsourcing options, including the benefits of BPO, from cost savings to enhanced global outreach and customer satisfaction. 

Types of outsourcing

Outsourcing can be a strategic move for companies that delegate specific business functions to third-party providers. Each form of outsourcing offers a range of independence, structure, and customization to meet a company’s unique requirements.

Here’s a brief overview of each:

  • Freelancing. This type of outsourcing involves hiring an individual to complete a specific task or project. Freelancers are typically self-employed and work remotely. They may have expertise in a particular area, such as graphic design, writing, or programming.
  • Contract outsourcing. Engages a third-party vendor to complete a specific project or provide a particular service. This type of outsourcing is often used for specialized functions with a precise end date, such as building construction, IT, and digital transformation projects.
  • Dedicated teams. Dedicated team outsourcing involves hiring professionals to work exclusively on a project or function. Depending on the company’s needs, these teams can be located onshore or offshore.
  • BPO. In contrast, business process outsourcing (BPO) entails outsourcing indispensable and ongoing business processes or functions, such as payroll or customer service, that are vital for the company’s survival. This long-term approach demands high trust and coordination between the company and the outsourcing partner.

Examples of BPO

  • Back-office BPO. This type of BPO involves outsourcing non-customer-facing operations or functions, such as data entry, accounting, and HR. It helps companies streamline their internal processes and focus on core competencies. A company may outsource its accounting functions to a third-party provider to reduce overhead costs, improve accuracy, and ensure regulatory compliance.
  • Front-office BPO. This type of BPO engages another company to perform customer-facing operations or functions, such as customer service, technical support, and sales. It enables companies to provide 24/7 customer support, enhance customer experience, and expand into new markets without needing a physical presence. 

BPO case studies

Fortune 500 companies often outsource front and back-office to achieve their business objectives. According to a study by Statista, in 2020, 37% of Fortune 500 companies outsourced customer service, while 21% outsourced accounting and finance ( “Outsourcing of functions by Fortune 500 companies in 2020”, Statista)

  • American Express. American Express outsources its customer service operations to third-party providers, enabling the company to provide 24/7 customer support while focusing on its core competencies (American Express Outsourcing Customer Service). The company’s partnership with Convergys Corporation, a leading provider of customer management solutions, has improved customer satisfaction levels and reduced customer service costs.
  • General Electric (GE). The company outsources its accounting processes to third-party service providers such as Accenture, Infosys, and Genpact. This move has allowed the company to reduce costs, streamline processes, and improve efficiency in its accounting department, in an exclusive look inside GE’s back-office machine by cfo.com (General Electric Outsourcing Accounting Processes).

Benefits of BPO

BPO can help businesses streamline operations, unlock specialized expertise, and improve their bottom line. Here, we explore four key benefits that can lead to greater efficiency, profitability, and success.

  • Unleash your potential by focusing on what matters. In addition to your core operations, you have to juggle many mundane tasks that divert your attention and energy away from what matters. Quality assurance, data entry, and application processing are just a few of these necessary but time-consuming tasks.
  • Unlock the expertise of industry professionals. It’s essential to delegate tasks strategically to maximize your company’s potential. Make sure your highly skilled salespeople spend their talents on something other than administrative duties like filing and data entry.
  • Boost your bottom line by saving time and money. By partnering with a BPO company, you can cut overhead costs and keep more money in your pocket. Plus, you’ll regain precious time to focus on growing your business and increasing your profitability.
  • Keep your business running smoothly, no matter where you operate. In today’s global economy, businesses can operate across borders and time zones. With their expertise in coordinating routines and workflows, BPOs can help you maintain performance and unity across all your locations.

Takeaway

Companies use front and back-office outsourcing to improve operations, reduce costs, and focus on core competencies. By outsourcing specific functions, your business can benefit from specialized expertise, technology, and economies of scale, ultimately driving growth and success.


Jordan Wayne, a psychology graduate from the University of Hertfordshire, has a keen interest in the fields of mental health, wellness, and lifestyle.

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