Business Process Outsourcing (BPO)
Definition - What does Business Process Outsourcing (BPO) mean?
Business process outsourcing (BPO) is the contracting of non-primary business activities and functions to a third-party provider. BPO services include payroll, human resources (HR), accounting and customer/call center relations.
BPO is also known as information technology enabled services (ITES).
Techopedia explains Business Process Outsourcing (BPO)
BPO categories are front-office customer services (such as tech support) and back-office business functions (such as billing).
The following are BPO advantages:
- 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.
BPO risks include:
- Data privacy breaches
- Underestimated running costs
- Overdependence on service providers