This article will provide you the information regarding BPO. It will include points like its full form, meaning, types, the procedure of work, etc.
- 1 Full-Form
- 2 What is BPO?
- 3 BPO Is Used In Two Main Areas
- 4 Types of BPO
- 5 Advantages of BPO
- 6 Disadvantages of BPO
- 7 Different Types of Outsourcing
- 8 Difference Between BPO and KPO
- 9 Difference Between BPO & Call Center
Here is a Full Form Of BPO. BPO is an abbreviated form of Business Process Outsourcing.
What is BPO?
Business Process Outsourcing is a method of contracting specific business operations and functions to an external service provider. There are certain operations that are given to a third party to handle them.
It proves to be a cost-saving measure that allows companies to outsource non-core tasks to specific service providers.
The non-core tasks may include data recording, accounting, telemarketing, payroll, customer support services, etc.
Outsourcing helps companies focus more on their core area and innovations as they do not need to allocate resources and talents for such functions that can be handled by BPO companies.
BPO Is Used In Two Main Areas
Broadly speaking, companies prefer BPO services in two main areas:
Front Office Operations: These operations include customer-oriented services such as tech support, sales, and marketing.
Back Office Operations: These operations include IT services, payment processing, accounting, human resource, and quality assurance to outside professionals who ensure the business runs smoothly.
Types of BPO
There are three types of Business Process Outsourcing options that are as mentioned below:
Offshore outsourcing is the one if the company sends the contract to another country where there is political stability, fewer labor costs, and tax savings.
In this, the business company hires a third party supplier to perform the operations in a nation other than the one in which the company is located.
A U.S. company hiring the BPO vendors here in India is a great example of offshore outsourcing.
Onshore outsourcing is the one in which the company and the BPO vendor are located in the same country. It is also known as Domestic Outsourcing.
The company and the BPO contractor may be in different cities or states but are within the territorial boundaries of the same country.
For example, a company from New Delhi may hire a BPO contractor from Chennai. They are in different cities but within India’s territory.
Near shore Outsourcing
Nearshore outsourcing is the one in which the company’s business functions are outsourced to the BPO companies in neighboring countries.
If the U.S. Company partners with a BPO vendor in Canada then it is called Near-shore outsourcing.
Business Process Outsourcing (BPO) is also referred to as information technology-enabled service (ITES) because these services rely on technology and infrastructure that enables the hiring companies or the client companies to perform their in-house roles efficiently.
Advantages of BPO
Business Process Outsourcing has gained popularity in the past 10 to 15 years and is being used tremendously by companies all across the corporate world.
BPO services can be of great help to companies in controlling their financial integrity for the future and significantly reduce the expenditures.
There are certain non-core functions that are complicated and cost consuming if you go for individual hiring. Outsourcing handles all these problems and provides services at reasonable costs.
Emphasis on Core processes
When the companies hand over the non-core functions to BPO vendors, they can pay more attention and time to their core competencies.
Hiring the BPO services to ensure that there is no compromise on non-core operations along with an efficient target-oriented performance of the business itself.
Companies usually get attracted to BPOs because they themselves get a great level of operational flexibility which helps in achieving more rate of productivity.
It leads to companies to achieve a high level of efficiency, expertise and performs better in their activities.
Better Resource Allocation
If companies decide to handle non-core operations also then it means they will have to set up a hiring team, more budget would be required for their setup, it would increase the burden on the HR sector and the finance sector as well.
Ultimately, the budget will be divided among core and non-core operations within the company. But hiring a BPO vendor proves to be of great help as the company only needs to pay them and the rest is assured.
This ultimately means that the company can focus on strategies to boost their business and allocate available resources mindfully.
Latest and Updated Technologies
The BPO companies stay up to date on the best business practices because in a way it is their main function to provide all the latest services to their clients.
BPO offers companies to have an access to innovative technological resources that they might not have exposure to otherwise.
The BPO vendors are in a constant race of striving in the market and thus they keep on improving by adopting the latest technologies and practices.
Disadvantages of BPO
While there are many advantages of business process outsourcing, there are some drawbacks as well.
If a business is relying on BPOs then there are higher chances that the company’s data is prone to breaches.
It is quite understandable that a third party is handling your operations with the data provided by you which can lead to some manipulations that you may be unaware of.
Now that you are relied on BPO vendors for your work to be completed there might be instances of miscommunication or other factors that may lead to delay in work completion which could affect your business too.
Different Types of Outsourcing
There are some other types of outsourcings apart from business process outsourcing as mentioned below:
Knowledge Process Outsourcing (KPO)
In this, the companies hire third-party service providers for knowledge and information processes.
Legal Process Outsourcing
It is a type of KPO specific to legal services such as legal documenting, legal research, offering legal advice to companies, and more.
Research Process Outsourcing
It is a type of KPO that is specific to the research and analysis of a company.
Difference Between BPO and KPO
|Full Form||Business Process Outsourcing||Knowledge Process Outsourcing|
|Definition||Contracts of specific business functions are give to third party service providers (BPOs)||Contracts of knowledge and information processes are given to third party vendors (KPOs)|
|Basis||Based on rules||Based on judgements|
|Reliance||On the cost basis||On the knowledge basis|
|Talent hiring||Good communication and interpersonal skills||Professionally qualified and profound in specifics|
|Emphasis||On non-core operations||Sensitive and specific operations|
Difference Between BPO & Call Center
|It is the one that performs operations for other business organizations. Companies use BPO services to save costs and gain productivity.||It is part of the client’s business. It is used for handling telephone calls, solve customer’s queries, and complaints about the telephone.|
We hope this reading was helpful in understanding BPO and other related things to some extent. We tried to cover all the details and information related to BPO and some other outsourcings also that would bring a lot of clarity to readers.