Business Process Outsourcing (BPO)

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Definition: Business Process Outsourcing (BPO)

Business Process Outsourcing (BPO) is a kind of outsourcing in which the company outsources a specific activity/process related to its business to a third party service provider. E.g. of the process could include payroll, HR, technical support to the customers.  BPO allows a company to save cost and also focus on the core activities. Business Process Outsourcing can be of 2 types:

  1. Back-office outsourcing: it involves outsourcing of internal business functions like payroll, HR, etc.
  2. Front-office outsourcing: It involves outsourcing of customer related processes like technical support, maintenance etc.

It can also be classified as:

  1. Offshore outsourcing: When the work is contracted to a company that does not reside in the same country. India and China have emerged as popular destinations for offshore outsourcing.
  2. Near-shore outsourcing: When the work is contracted to a company that resides in the neighbouring country
  3. Onshore outsourcing: When the work is contracted to a company that is in the same country

 

Knowledge process outsourcing (KPO) and Legal Process Outsourcing (LPO) are now emerging as important subsets of BPO.


Hence, this concludes the definition of Business Process Outsourcing (BPO) along with its overview.

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