Business Process Outsourcing, or BPO, is a business practice in which an organization hires another company to complete a task that the hiring organization needs for its own business to operate successfully. BPO has its roots in the manufacturing industry, with the manufacturers hiring other companies to handle specific processes, such as parts of their supply chains that were unrelated to the core competencies needed to make their end products.
However, organizations in other industries adopted the practice via the years. Now the usage of BPO has expanded so much that organizations of all kinds- for-profit businesses, non-profits, and even govt. Offices as well as agencies, contract with BPO service providers in the United States, throughout North America along with across the World to perform numerous processes. In accordance with the BPO Services Global Industry Almanac 2013-2022 released in May 2018, the overall Business Process Outsourcing Services Sector generated revenues of $144.9 billion in the year 2017.
What is BPO user for?
Organizations engage in business process outsourcing for two main areas of work: back-office functions and front-office functions. Organizations can outsource a range of back-office features involving 17 services, Accounting, Human Resources, Quality Assurance, and Payment Processing.
Similarly, they can outsource ample front-office functions, including customer relations services, sales, and marketing. Organizations can even outsource particular tasks in those areas in addition to outsourcing an entire functional area. The practice of business process outsourcing could be at least partially displaced in upcoming years by technology.
However, not all processes are easily automated. Moreover, a service provider might be in a better position to utilize those technologies to automate its service offerings than organizations are, thereby assisting the BPO provider in retaining its appeal to organizations looking for the best way to handle business functions.