Business Process Outsourcing (BPO) is a kind of outsourcing in which the company outsources a specific activity/process related to its business to a 3rd party service provider. The concept of BPO comes from the fact that the companies want to concentrate on the core competency and can outsource other important but non-core processes to third-party service providers. Knowledge process outsourcing (KPO) and Legal Process Outsourcing (LPO) are now emerging as important subsets of BPO.

Thus, Business process outsourcing, or BPO, is a business practice in which one organization hires another company to perform a task (i.e., process) that the hiring organization requires for its own business to successfully operate.

Advantages of Business Process Outsourcing

• Focus on Core Competency.
• Reduction in Costs.
• Increase in efficiency of the business process.
• More Employment generation.
• Focused teams solving problems.
• Business process speed and efficiency are enhanced.
• Employees may invest more time in core business strategies to bolster competitive advantage and enhance value chain engagement.
• Organizational growth increases when capital resource and asset expenditures are not required, which averts problematic investment returns.
• Organizations are not required to invest in unrelated primary business strategy assets, facilitating a shift in focus to specific competencies.

Disadvantages of B.P.O

• Over-dependence on third-party vendors.
• Lack of complete knowledge of product/service offering leading to customer dissatisfaction.
• Less focus on quality because of lower-cost offerings through outsourcing.
• Data privacy breaches

Examples of B.P.O

There are many companies that are using many outsourcing their requirements for improving their business successfully. In that some examples are:

• Call Center Outsourcing.
• Knowledge Process Outsourcing (KPO).
• Data Entry Outsourcing.
• Financial Services Outsourcing.