What is BPO in Business?

What is BPO in Business?- Businesses have been shifting from traditional models to new ones that incorporate various departments into one. It results in increased operations and the use of technology in production.

It may not always be possible for all businesses to have enough resources to purchase all the required equipment or hire an experienced workforce to tackle all the issues.

Therefore, outsourcing for some operations and processes becomes a necessity. This has led to an increase in the number of companies that offer outsourcing services. Let’s understand what BPO is and its benefits.

What is BPO in business?

Business process outsourcing (BPO): is the process by which you contact another company or company to perform various business functions of the sourcing company.

They give the responsibility of executing a particular task’s functions to the third-party company.

What is BPO in business?

This process is also called externalization or subcontracting. Initially, the process was concentrated in the manufacturing industry, but now it is used in various business processes.

Which areas are BPO used in?

You can apply subcontracting in all processes within a business. However, it is mainly applied in:

  • Front office operations: in sales, addressing grievances, marketing, customer relations, and other front-office functions
  • Back office operations: these are, among others, processing of payments, Information technology services like data entry, and quality assurance.

The business can outsource one or more functions. For example, the company can outsource the data entry and analysis processes instead of outsourcing all the data processing operations.

The BPO industry has grown extensively over the years and can provide a broad range of services and functions to business organizations.

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What are the types of Business Process Outsourcing?

Based on location, we can classify business process outsourcing companies into several types. Below are some of the BPO:

  • Nearshore outsourcing: in this type, a business contracts a service provider from the neighboring country.
  • Onshore outsourcing: here a company seeks services from a company within the same country. We also refer to it as domestic outsourcing.
  • Offshoring: in this case, the business enlists the services of a company in a different country. This is also called offshore outsourcing.

How does a company arrive at a BPO decision?

Employees, business operations, and workflow practices are greatly affected when a business transfers its in-house work to a BPO company.

How does a company arrive at a BPO decision?

This is because it requires a change in the overall management. The decision to outsource involves:

  • The executives within a company deciding to outsource an operation or part of it
  • They look at both advantages and disadvantages of such a decision. Does it make strategic sense to the business?
  • If it makes sense, the executives of a company seek the best BPO for the operation.
  • The in-house work is then shifted to the subcontracted company.

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What are the benefits of Business process outsourcing?

Productivity improvement

Because they have outsourced some processes, the corporate executives can concentrate on the major areas of the business. They do more detailed management than in the formulation of strategies.

Business process outsourcing companies like Oworkers Outsource helps the executives explore new areas of revenue generation, saves them time, focus on the customers, and speed up other projects. It leads to increased productivity.

In addition, the outsourced companies specialize in various areas with better-experienced people.


The reduction of costs matters in any corporation. It drives profit up if well planned. Business process outsourcing not only increases productivity but also helps reduce costs. It raises the margins significantly.

Re-engineering, improving processes, and using current technology enable the reduction of expenses. This brings the administrative and production costs under control.

When a company outsources, it can maintain lower rates and provide better service solutions. Therefore, it has a better position in the market, and its competitiveness is improved.

Improvement in human resource

The other merit of business process outsourcing is the improvement in Human resources. It brings on cost-effective labor to the outsourcing company. Today, companies require efficient, effective, and productive HR.

Such HR generates economies of scale for the improvement of the company. Outsourcing helps a business save on human resources because of its functions and priorities.

Outsourcing allows the company to access a trained and skilled labor force at low rates.

Access to advanced technology at a lower cost

The leading area of outsourcing is technology. With it, your work looks modern, organized, and presentable. It is often costly and risky to invest in technology.

Because of the rapid development in the technology industry, it is challenging and expensive to keep your company abreast with all the changes. The outsourcing companies are specialists in various fields, key among them being the technology industry.

Therefore, they have the desire, expertise, and resources to keep their technology updated to the latest, true merit of outsourcing.

Focusing on the core areas of the business

An efficient business strategy is crucial to take a business to the top. Through business process outsourcing, the top-level management can give critical activities to the sub-contracted company.

Therefore, the top-level management can concentrate on the core activities of the business.

Helps in catering for the ever-changing/ developing customer demands

The ability to cater to the changing demands of customers effectively is another merit of business process outsourcing.

Many business process outsourcing companies give the management the flexibility of services.

This enables the contracting company to meet the changing requirements of various customers and support its consolidations, acquisitions, and joint ventures.

Optimal resource utilization

Scarcity of resources is a prevalent issue in business. Business process outsourcing helps in ensuring that the resources are optimally used. You can capture new efficiencies and do some reallocation of resources with BPO.

Therefore, the company sees increased efficiency and productivity.

Because a business now has more skilled employees and sophisticated technology, effective utilization of resources is possible, leading to increased productivity.


Through Business process outsourcing, many advantages are possible. In the current world, having all the equipment and infrastructure in management, production, and sales is impossible, especially in upcoming businesses.

In addition, some tasks like data entry do not require full-time employees because they are occasional. Therefore, enlisting the services of reputed business process outsourcing companies can help your business greatly.

Leverage the above benefits for more productivity, increased market competitiveness, and customer satisfaction.


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    What is BPO in Business?

    What is BPO in Business