Definition of Business Process Outsourcing (BPO)

Business Process Outsourcing (BPO) subcontracts entire business functions to external providers. Unlike hiring a freelancer for a specific task, BPO involves outsourcing entire departments such as marketing or accounting. Traditionally utilized by manufacturing companies, BPO has become prevalent in various industries. 

BPO services provide back-office functions, such as human resources and accounting, and customer-facing functions, such as sales and customer service. There are three types of BPO to consider – “Offshore” BPO hires an overseas company, “nearshore” outsourcing hires a company in a nearby country, and “domestic” or “onshore” BPO hires a company within the same country. 

To streamline your operations and save costs, explore business improvement possibilities with BPO.

What is BPO Used For?

Offload a range of functions, from HR and accounting to marketing and sales, to focus on what matters: growing your business. Here are specific business functions that can be optimized by engaging with a BPO partner:

Human Resources

Businesses can save time and resources by outsourcing recruitment, onboarding, training, payroll, benefits administration, compliance, and employee relations. Companies can focus on their core competencies and strategic objectives by delegating these responsibilities to an external partner.

Sales and Customer Service

In today’s always-on world, customers expect quick and efficient service around the clock. This demand is where call centers come in. Equipped with the latest technology and top talent, call centers can provide round-the-clock support in multiple languages, ensuring that customers always feel heard and valued.

Supply Chain Management

Supply chain management requires careful management of legal and ethical issues, payment processing, quality control, and specialized software. These complexities can be overwhelming for companies, but an experienced BPO partner can easily navigate these waters.


Hiring full-time SEO, social media, paid search, and content marketing experts that require top-notch software and listening tools are prohibitively expensive. Outsourcing marketing operations can help avoid spending on these costly resources.


Outsourced accounting provides real-time transaction processing, sales invoicing, vendor bill payment, payroll processing, management reporting, budgeting, forecasting, and KPI trending to manage business finances.

Does my business need BPO?

Use the checklist below to determine whether your company needs a BPO to deliver the following business improvements:  reduce operational costs, acquire expertise, and achieve scalability.

  • Do you need more resources to manage specific business functions like accounting, HR, or customer service?
  • Are you looking to reduce overhead costs associated with managing these functions in-house?
  • Is your business experiencing rapid growth or expansion, and do you need to scale your operations quickly?
  • Do you need help keeping up with regulatory compliance requirements and assistance to ensure that you meet all the necessary standards?
  • Are you looking to improve the quality and efficiency of specific business processes?
  • Are you looking to free up time for your staff to focus on more strategic business initiatives?
  • Do you need more expertise to manage specific business functions in-house and need access to specialized knowledge and skills?
  • Are you looking to improve customer satisfaction and retention rates by providing more responsive and efficient customer service?

If you answered yes to any of these questions, outsourcing certain business functions to a BPO provider may be a smart move for your business.

What are the benefits of BPO?

The following advantages can give your business a serious competitive edge with BPO. Here are 9 incredible benefits that you should know about:

1. Operational Flexibility

Outsourcing non-core functions, such as HR or marketing, allows your staff to focus on what they do best. This advantage gives your team the flexibility to be innovative and adaptable.

2. Digital Transformation

BPOs invest in the latest tech for their function. Outsourcing to them grants access to advanced tools and software.

3. Talent, Talent, Talent

Hire top talent with extensive experience and credentials. By tapping into the BPO talent pool, businesses can access specialized knowledge and skills they may need to gain in-house.

4. Cost Savings

Most BPOs operate in countries where educational attainment is high and the tax rates and wages are low – saving money on labor costs and other expenses such as office rental fees.

5. Real-time Reporting 

BPOs use advanced technologies like artificial intelligence and machine learning to help clients adapt quickly to changes in their industry or customer demands.

6. Specialized Risk Management

Reduce information technology or supply chain management risk by handing over functions to experienced specialists.

7. Competitive Advantage

By incorporating specialized expertise, businesses can achieve a significant competitive advantage to outpace their competitors.

8. Peace of Mind

Outsourcing non-core functions to a reliable BPO provider can give businesses peace of mind knowing that their operations are in the hands of a trusted partner.

How to find and select your ideal BPO partner

To find the ideal BPO partner that can provide your business with all these amazing benefits, you must vet potential providers carefully. Here are some crucial steps to consider when searching for, selecting, and ultimately hiring a reliable BPO provider:

  1. Determine which functions or processes you want to outsource and why.
  2. Research potential outsourcing providers and create a shortlist of candidates.
  3. Evaluate the shortlisted providers based on their experience, expertise, reputation, and pricing.
  4. Request proposals from the top providers on your shortlist, outlining the services you require and any specific needs or requirements you have.
  5. Review and compare the proposals received, considering cost, quality, delivery time, and support factors.
  6. Conduct interviews or consultations with the top candidates to clarify questions or concerns and assess their level of communication and professionalism.
  7. Review references and case studies to validate the provider’s experience and track record.
  8. Choose the outsourcing provider that best meets your needs, requirements, and budget.
  9. Establish a clear contract or agreement that outlines the scope of work, pricing, timelines, communication protocols, and other essential details.
  10. Maintain regular communication with the outsourcing provider to ensure that the work is done to your satisfaction and that any issues are addressed promptly.


Deciding to outsource certain parts of a business can take time and effort. It requires careful consideration and a strategic approach to determine which functions to outsource and how to proceed. However, by partnering with an outsourcing provider and managing the relationship effectively, your business can avoid pitfalls that could harm operations and reputation. With a clear understanding of the benefits and risks involved, you can confidently pursue outsourcing to gain a competitive edge and achieve tremendous success.