The Different Types of Business Process Outsourcing

Types of Business Process Outsourcing

Outsourced services are growing in popularity around the world. Global services were valued at 92.5 billion dollars in 2019, a figure that is continually increasing. Businesses are leveraging the expertise and financial benefits of outsourcing both front-office and back-office procedures as an alternative to hiring contingent staff in-house. Businesses can decide which services to outsource and how to minimise costs by filling specific jobs and acquiring unique capabilities by knowing the many types of Business Process Outsourcing (BPO).

The activity of outsourcing an external, third-party vendor’s services, business-related operations, or labour processes is known as BPO. BPO is a broad word that encompasses a variety of subcategories that describe the location and function of the services offered. The following are some of the subcategories:

Front-Office BPO

Customer-facing services, such as tech assistance, customer service, sales, and marketing, are referred to as this phrase. Because of the technical knowledge requirements, these services are commonly outsourced and can be completed off-site. Businesses can benefit from specialised expertise with unique knowledge while cutting expenses by outsourcing web development, customer support lines, or any front office services.

Offshore BPO

When services are outsourced to another country, this is known as offshoring. Available resources, political stability, cheaper labour costs, varied tax reductions, and other factors all contribute to this. Companies that contract with call centre providers all around the world to outsource their customer support divisions are a common example. As a result, firms can obtain qualified labour and services at a reduced cost, lowering overhead costs and perhaps lowering end-user product or service prices.

Onshore/Domestic BPO

Domestic outsourcing is exactly what it sounds like: providing and receiving services within a country’s borders. To put it another way, a vendor in one city, state, or province can be hired to deliver services to a company in another city, state, or province. This might be caused by a variety of causes, such as the availability of specialised talents in specific places or disparities in rates and expenses between regions.

Back-Office BPO

Back-office business process outsourcing entails contracting non-customer-facing services. IT, accounting, business process automation, human resources, quality assurance, and other services are among them. IT-Enabled Services (ITES) BPO, such as IT analysts, Legal Process Outsourcing (LPO), such as paralegals or advisors, and Knowledge Process Outsourcing (KPO), such as outsourcing an individual who understands and can implement/manage a certain programme, have all evolved as subtypes of BPO. Businesses can focus on their primary goal instead of spending time and money on internal training and onboarding by outsourcing these tasks.

Managing Outsourced Vendors

While recruiting and managing outsourced suppliers can be done in-house, partnering with a Managed Service Provider (MSP) as part of your workforce management strategy can make the process go more smoothly. From request through payment, HCMWorks is a neutral third-party that delivers expert consultancy services to expedite, simplify, and manage the contingent workforce supply chain. Contact one of our consultants to learn more about our services.

Nearshore BPO

The act of engaging the services of suppliers in nations that are geographically close is referred to as nearshore business process outsourcing. For US enterprises, this might cover Canada, Mexico, and Central America. This type of outsourcing usually occurs when specialised skills are available at a reduced cost in a nearby country, but certain factors, such as timezones or language proficiency, must be considered. An example of this is when a Silicon Valley corporation outsources IT and coding services to specialists in Canada, or when a Canadian company outsources marketing services to a marketing agency in the United States.

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