What is Business Process Outsourcing (BPO)?

Do know what the acronym BPO stands for? Learn all about what Business Process Outsourcing is - and why you should know all about it.

Do you know what the acronym BPO stands for? These 3 little letters stand for an expression that has become increasingly more important to a huge number of companies all around the world: business process outsourcing.

Now that you know what the letters stand for, let’s dig a little deeper and find out what it means.

What is Business Process Outsourcing?

BPO, as it is more commonly known, is a method of subcontracting business-related operations, normally those unrelated to your company’s core business, to a third-party.

Breaking it down, means: 

Hiring someone else to take care of the processes and activities that aren’t part of the core business of the company such as human resources, customer support, financial operations and many others.

Way back in the past, when outsourcing first emerged as an alternative, it was mainly applicable to the manufacturing of products but nowadays it’s more and more common to see outsourced services.

BPO encompasses back-office processes such as internal business functions (HR processes, finances, accounting, etc.) as well as front-office and customer care (customer helpdesk, contact center, etc.).

Business Process Outsourcing Benefits

Lower Costs and Time

One of the most important reasons why companies choose to outsource their processes is because of the flexibility it gives them (in terms of cost and time).

When it comes to cost flexibility, outsourced processes allow companies to have pay-as-you-go subcontractors for specific processes instead of having an internal employee responsible for said processes. This is especially useful when it comes to seasonal processes that have a varied demand throughout time.

Adopting this variable cost structure companies became able to respond quickly when changes in capacity are needed as well as reduce the need for investing in assets.

Focus on Core Activities

Another very important reason why companies choose to outsource certain processes is that, by hiring someone else to take care of these parallel processes, they’re able to focus on their core competencies. It’s not uncommon to see key employees ‘wasting’ their times performing administrative processes that could easily be outsourced.

Through business process outsourcing, these employees become free to invest all their time and energy into building the company’s core business and making the product/service more competitive.

Increase Speed and Quality

Outsourcing is also very useful for increasing the speed of business processes – by subcontracting third-party service providers, companies are able to increase the speed of several business processes.

BPO makes it possible for companies to grow more, faster by removing the constraints that come with having a big team (and consequently spending a lot in people and equipment).

Outsourcing vs Managing in-company

Outsourcing can be complicated at first, and not all small businesses want to take that leap. Contract a third-party usually is worth when the volume is high

Before completely outsourcing your processes and repetitive work, you can try a faster and easier alternative—managing and automating your processes using a tool. Then Pipefy can be a less risky and faster solution.

Using Pipefy, you can streamline your business processes, save money by automating tedious tasks, and focus more on your core business offering. Start automating and running smoother processes without needing IT support or technical skills.

Take a look at the best use cases to start managing your processes with Pipefy:

Head of Customer Support @Pipefy. She uses her extensive Pipefy knowledge to help users make the best of Pipefy via support and writing informative content pieces. Besides being in charge of support, she's an avid reader, a coffee lover, and a professional photographer.

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