What is business process outsourcing and can it save me time?

BPO-business process outsourcing

Business process outsourcing is a method of subcontracting various business-related operations to third-party vendors. 

What is business process outsourcing? When a business contracts a third party to perform several services related to back and front office operations.

  • BPO is deemed “offshore outsourcing” if the contract is sent to another country with political stability, lower labor costs, and tax savings.
  • There are several advantages, such as lower expenses, worldwide growth, and more outstanding performance. A few of the downsides consist of security concerns, concealed costs, and overdependence.
  • For many years, the outsourcing market has grown, and services have become more easily accessible.

Your business gains from outsourcing. A less expensive workforce is a reasonable expense to decrease your overhead. Do you need to outsource a service now? Contact us.

What is Business Process Outsourcing? 

A system that offers organizations more versatility by employing another business to manage specific elements of their company. Outsourced services are frequently divided into various types based upon the provider’s specialty.

Back-office services: accounting, infotech (IT) services, personnel (HR), attendance tracking, employee call-out solutions, quality control, and payment processing

Front-office services: phone and customer service, appointment management, outbound sales, lead verification, surveying, after-hours customer support, and call-forwarding

How does outsourcing support my business?

Business contracting at its core offers assistance in operations related to customer experience, order management, FAQ/helpdesk, IT services, personnel, compliance, and quality control. 

You can contract out a whole dedicated team or only hire seasonal/surge support. 

Outsourcing supports entire departments, such as the HR department. For instance, a company might outsource its attendance tracking but carry out all other HR procedures in-house.

How does it work? What questions are relevant before I get started?

BPO is divided into two categories, overseas and domestic support. 

  1. Overseas outsourcing, or service based in another country with political stability, offers advantages to businesses, including lower labor expenses and tax cost savings. A US business utilizing a Singapore company for virtual assistance is an example.


  2. Onshore outsourcing or domestic sourcing occurs when BPO is contracted within a business’s country. Advantages include more accessible support for requests and fluent, native language speaking representatives.

Especially with overseas support, you need to think about more than simply the cost. 

Think about how well the company can provide the services and processes you need to outsource successfully and what your experience might look like with your overseas partner.

Assess each company to see how they answer the following questions: 

  • How long have they been performing the services you want to outsource? 
  • Who are their other partners? 
  • What is the onboarding process like for customers?
  • How long is the contract length?
  • What QA protocols does the partner use?
  • How does the partner train the representatives that will be representing your company?

Small start-ups to larger businesses contract out teams to keep up in today’s ever-changing, extremely competitive service environment. 

According to CGS Inc, in a survey of nearly 200 business, they found: 

  • 48.6% of business leaders stated that data privacy and security compliance was their top priority when looking for a BPO provider.
  • 41.9% of survey respondents are looking for not just the lowest cost but for knowledgeable partners with advanced technology capabilities.
  • 34.3% indicated that the BPO technology offerings are increasingly important.
  • 33.3% desired BPOs with deep experience in the company’s market or vertical.

What are the disadvantages of outsourcing?

Be on the lookout for potential concerns and issues when outsourcing with new partners, especially if they do not have a long track record in the industry.  

Here are a few items to be mindful of:

  • Security breaches.

    BPO produces another entry point for bad actors, hackers, and id theft; additionally, companies frequently share private and regulated information with their providers.

    HIPAA compliance and data redundancies/security are essential to understand and deploy.

  • Unanticipated costs and expenses.

    Organizations can undervalue the rate they’ll be charged for the outsourced work, often because they overlook the quantity of the time required to carry out or complete tasks defined in their agreements.

    Understand the functions and notate the protocols or work with your outsourcing partner to prepare protocols before outsourcing work.

  • Relationship difficulties.

    Especially when working with an overseas company, organizations can run into issues with their outsourced companies. They may discover that there are cultural barriers– problems that can water down the advantages of BPO.

    Prioritize working with a company that offers personalized account managers that work with only your business.

  • Don’t become overdependent on the contracted supplier.

    Once you contract out, the service is connected to the partner that carries out the work. You then must manage the relationship with your clients and your provider.

    Always stay in touch with your outsourcing partners and get documentation of protocols. If not, the organization may find it challenging to bring the operation back in-house or even move the contract to another outsourced provider.

  • Understand the business environment of the BPO provider.

    An organization also must monitor for issues that could interrupt or permanently end services provided by an outsourced provider – including financial or workplace problems at the outsourced provider, geopolitical instability, or natural disasters.

    Therefore, it is necessary to consider such risks and devise strategies on how to cope. This, in turn, adds complexity to their business continuity and disaster recovery.

Deloitte found in its “2020 Global Outsourcing Survey” that when determining to outsource, enterprise leaders focus on the potential risks of BPO and the importance of risk management. 

Mike Stoler (Deloitte, Principal) said, “Third-party ecosystems are more complex than ever, which has implications for regulatory compliance, security, risk, and data protection requirements. Organizations have rising expectations that service providers will spearhead their innovation agenda. Outsourcing decisions will play a significantly more strategic role in short-term resilience and long-term growth.”

What services are relevant to outsourcing? 

More than you can believe! Focus on supporting organizational goals, in addition to helping your team be more agile, more versatile, available, ingenious, and eventually more competitive.

For big and small companies, the series of outsourced functions used by an organization has broadened considerably to include:

  • Accounting.
  • Administration.
  • Client service and contact centers.
  • HR.
  • IT management and services.
  • Marketing and lead generation.
  • Research studies.
  • Sales.
  • Shipping and logistics.

A study from Clutch, a business-to-business research study company, discovered that small companies most frequently outsourced their more technical jobs, with 37% contracting out accounting, 37% outsourcing IT services, and 34% outsourcing digital marketing.

What is the future of business process outsourcing?

Experts anticipate that outsourcing, contract, and freelance labor will continue to grow. 

In 2017, outsourced services’ approximated international market size was 88.9 billion US dollars, which was up $12 billion from the previous year.

Grand View Research study put the BPO market at $245.9 billion in 2021. The study then anticipates the market would reach $435.9 billion by 2028, expanding at a compounded yearly rate of 8.5%. 

What is driving this demand? A continuous need to reduce operational expenses and increase efficiency. Likewise, pressure on companies to enhance effectiveness, client services, growth, and versatility also drives outsourcing.

BPO provides organizations access to ingenious technological resources that they may not otherwise have direct exposure to. BPO partners and businesses continuously aim to enhance their services by embracing the most current innovations and practices.


Business process outsourcing (BPO) is a method of subcontracting various business-related operations to third-party vendors. Organizations take part in outsourcing for two primary reasons: back-office functions and front-office functions.

Clutch discovered that 80% of small companies are contracting out in 2021 to conserve cash, time, and experienced professionals’ access. 

While there are lots of benefits of BPO, there are likewise downsides. An organization that outsources its procedures might be prone to information breaches or have interaction concerns that postpone task conclusions. Such organizations might ignore the running expenses of BPO suppliers.

Finding the right partner to outsource your business is imperative. Contact us to learn more. 

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