The Internet Revolution started out a series of cascading effects in Information Technology; Business Process Outsourcing (BPO) is certainly one of them. The word refers to the method of using third-party services to be mindful of your business operations that want fine-tuned skills. In its earliest form, business process outsourcing applied mainly to manufacturing companies for e.g. soft drinks manufacturers who used outsourcing due to their supply chain systems; however, since technology practically annexed the world, it now relates to a host of services chiefly utilizing the Internet to complete tasks.
The phrase ‘Outsourcing’ became a much used buzzword in corporate circles in the mid 1990s. Outsourcing means the procedure where the services of a third-party service provider are contracted for various business operations National Legal Staffing Support LLC. Coinciding with the Internet revolution, BPO came to indicate the procedure of ‘leveraging the skills and expertise of technology vendors in low-cost economies to accomplish internal tasks that have been when the responsibility of a particular business enterprise’ ;.Simply put, it denoted the procedure of shifting internal job functions or delegation of non-core operational jobs to an additional company (contractor or sub-contractor) to an additional company in an alternative geographical location which specialized in a particular process or operation. Outsourcing helped businesses focus more on core competencies and gain advantages by saving on infrastructure and staffing costs. These vendors established ‘call centers or help centers’ in their particular countries designed with infrastructure and staffing; the entire setup was contracted to the organization providing the job. The processes outsourced within BPO included data entry, billing, medical transcription, payroll processing etc. The outsourcing process suited first-world nations like the USA, UK and Europe that transferred jobs to third-world countries primarily in Asia like India, China, Malaysia, Philippines etc. By outsourcing, they benefitted from paying low wages and salaries to contracted labor rather than pay high cost salaries and benefits to in-house or local employees.
Business Process Outsourcing (BPO) can also be generally called ‘offshore outsourcing’ while the outsourcing process is sent to some other country. The word ‘near shore outsourcing’ is employed to refer business operations outsourced to a neighboring country.
Business Process Outsourcing (BPO) was previously known as a part of the outsourcing process which involved the operations and responsibilities of specific business applications and processes to a contracted third-party service provider; it is now used more in the context of Information Technology Enabled Services (ITeS).
Typically, BPO is categorized as front-end outsourcing to denote areas involving customer-centric services like contact centers, billing centers etc.; the back-end outsourcing indicates internal business area functions of an organization like accounting, finance, human resources etc.
Very often, BPO services involve IT and ITeS; two important sub-segments of the BPO industry are Knowledge Process Outsourcing (KPO) and Legal Process Outsourcing (LPO).