Business process outsourcing (BPO) is a method of subcontracting various business-related operations to third-party vendors.

Although BPO originally applied solely to manufacturing entities, such as soft drink manufacturers that outsourced large segments of their supply chains, BPO now applies to the outsourcing of various products and services.

KEY TAKEAWAYS

● Business process outsourcing (BPO) utilizes third-party vendors or subcontractors to carry out certain parts of their business operations.

● BPO began with large manufacturing companies to aid with supply chain management,

● Today BPO has grown to include all sorts of sectors, including services companies.

● BPO is considered "offshore outsourcing" if the vendor or subcontractor is located in a different country; for instance, in the case of customer support.

● BPO is now an industry unto itself, with companies specializing in providing BPO to businesses all over the world.

What Are the Types of BPO Companies?

There are three primary types of BPO companies. These are local outsourcing, offshore outsourcing, and nearshore outsourcing. Local outsourcing is a company that is in the same country as your business. Offshore outsourcing is a company that is in another country, and nearshore outsourcing is a company that is in a country that is not too far from your country.

What Is a BPO Call Center?

A BPO call center handles incoming and outgoing customer calls for other businesses. Many BPO call centers will have agents who can handle customer complaints or inquiries for a variety of different companies, often within a specific specialty. For example, a single call center agent may be able to handle tech support phone calls for multiple vendors or manufacturers.

The Bottom Line

Business process outsourcing (BPO) utilizes third-party specialists to carry out some part of a business process or operation (as opposed to outsourcing the entire

production). BPO can lower a company's costs, increase efficiency, and provide flexibility. At the same time, the BPO industry is rapidly growing, which means that in our increasingly global economy, process outsourcing is not going anywhere.