Broadly speaking, companies adopt BPO practices in the two main areas of back-office and front office operations. Back office BPO refers to a company contracting its core business operations such as accounting, payment processing, IT services, human resources, regulatory compliance, and quality assurance to outside professionals who ensure the business runs smoothly.
By contrast, front office BPO tasks commonly include customer-related services such as tech support, sales, and marketing. The breadth of a business’ BPO options depends on whether it contracts its operations within or outside the borders of its home country. BPO is deemed “offshore outsourcing” if the contract is sent to another country where there is political stability, lower labor costs, and/or tax savings. A U.S. company using an offshore BPO vendor in Singapore is one such example of offshore outsourcing.
Companies are often drawn to BPO because it affords them greater operational flexibility. By outsourcing non-core and administrative functions, companies can reallocate time and resources to core competencies like customer relations and product leadership, which ultimately results in advantages over competing businesses in its industry. BPO offers businesses access to innovative technological resources that they might not otherwise have exposure to. BPO partners and companies constantly strive to improve their processes by adopting the most recent technologies and practices.