The Internet Revolution started out some cascading effects in Information Technology; Business Process Outsourcing (BPO) is among them. The term identifies the strategy of using third-party services to be mindful of your personal business operations that require fine-tuned skills. In its earliest form, business process outsourcing applied mainly to manufacturing companies for e.g. soft drinks manufacturers who used outsourcing because of their supply chain systems; however, since technology practically overran the world, it now pertains to a host of services chiefly using the Internet to complete tasks.
The phrase ‘Outsourcing’ became a much used buzzword in corporate circles in the mid 1990s. Outsourcing means the process where in fact the services of a third-party supplier are contracted for various business operations National Legal Staffing Support LLC. Coinciding with the Internet revolution, BPO came to indicate the process of ‘leveraging the skills and expertise of technology vendors in low-cost economies to perform internal tasks that have been when the responsibility of a particular business enterprise’ ;.To put it simply, it denoted the process of shifting internal job functions or delegation of non-core operational jobs to an external company (contractor or sub-contractor) to an external company in a different 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 own countries built with infrastructure and staffing; the whole setup was contracted to the business providing the job. The processes outsourced as part of 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) is also generally known as ‘offshore outsourcing’ while the outsourcing process is sent to another country. The term ‘near shore outsourcing’ is employed to refer business operations outsourced to a neighboring country.
Business Process Outsourcing (BPO) used to be called a part of the outsourcing process which involved the operations and responsibilities of specific business applications and processes to a contracted third-party supplier; 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 a company like accounting, finance, human resources etc.
Quite 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).