Glossary definition

What is business process outsourcing?

Business process outsourcing, or BPO, refers to the process of contracting standard business functions to be handled by a party outside of the company.

BPO functions most commonly outsourced include:

  • customer service,
  • accounting,
  • payroll, and
  • human resources management.

Companies can often benefit from implementing the practice of BPO, meaning more flexibility and cost efficiency can be achieved. Third-party providers set up for a dedicated task such as payroll perform more efficiently and are able to transfer those cost savings to their clients.

Call centres are a type of BPO. For example, a manufacturer may outsource their customer service to a call centre. But business process outsourcing isn’t limited to customer service, or to call centres. The same manufacturer might use BPO to outsource payroll, accounting, and similar administrative tasks.

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