The Basics of Business Process Outsourcing

Share this post


Business process outsourcing or BPO is not a new phenomenon, but rather a normal economic activity. This has, in fact, became a strategic business option because of globalization boosted by the development of Internet technology.

Misunderstanding the term can indeed create confusion. Thus, there is a need to define them to put things in proper perspective.

What is BPO?

BPO or business process outsourcing is a contracting activity that utilizes the services of a third party by a company. Its general purpose is to get the third party to perform certain office or business operations including, but are not limited to, the following:

  • Human resources
  • Logistics management
  • Medical transcription
  • Payroll administration and maintenance
  • Customers’ call centers or help desks
  • Finance, accounting, and billing services
  • Telemarketing, tele-servicing and product support
  • Insurance claims processing and management
  • Legal database management and maintenance

Advantages of BPO

Business process outsourcing offers an array of advantages such as the following:

  • Increases productivity;
  • Cuts down operational expenses;
  • Improves products and services; and
  • Upgrades business liability.

BPO as an emerging industry

Business process outsourcing has emerged as an industry itself in the past few years, apart from traditional or Information Technology -related industries.

This type of industry is currently booming in nations like India, China, Mexico, South Africa, and the Philippines, contributing hugely to the economic development of these countries.

Through outsourcing, many U.S. firms have, in fact, saved billions of dollars, gained significant lead over their competitors, ensured high quality of products and services, and boosted customer satisfaction further.

Such innovation is prompting more and more companies that are based in the United States to utilize business process outsourcing. This creates favorable conditions for the continued growth of the industry. And with technology making new waves, it is expected that profits can be generated instantaneously than before.