What Is Business Process Outsourcing?

Business process outsourcing is a multi-billion dollar worldwide industry. In recent years, its growth has been exponential — especially in developing nations. Shifts in the use of social media have driven much of the expansion of business process outsourcing, as the need for multichannel communication has increased. Consumer behavior continues to change rapidly; businesses should be fluent in the language of outsourcing in order to stay ahead. Here are some important aspects of business process outsourcing to consider as you scale your company.


Think of business process outsourcing vendors as being grouped into three geographical categories: offshore, nearshore, and onshore. It’s fairly self-explanatory. Offshore vendors operate outside a companies’ own country (for example, a U.S. enterprise using a call center in India), nearshore vendors do business in neighboring countries, and onshore vendors work within the same country as the main one. Onshore vendors may operate close by, across the country, or somewhere in between. Within a company’s task requirements, business process outsourcing may also be considered “back office” (internal processes) or “front office” (customer-facing).


Decreasing cost is a primary advantage of utilizing business process outsourcing. Payroll taxes, overhead, and benefits can cut significantly into the bottom line of a business, as can providing workspace, staffing, training, and severance. Another key advantage of outsourcing is the ability to concentrate on the key functions of a company. Focusing on the primary product/service, differentiating the business, and maximizing growth will increase competitiveness, boost customer satisfaction, and enhance all interactions. That’s a good long-term strategy for success. Improvements in efficiency, 24/7 customer access, increased global presence, better results in non-core functions, and a boost in flexibility are other advantages of outsourcing.


The functions that business process outsourcing can provide are numerous; the list is ever-growing. Human resource support, knowledge services, accounting, and financial services, back-office transactions, IT support, customer-related services, legal counsel and research, travel assistance, and general research are several of the areas in which business process otusourcing can support a company. The level of expertise and specialization required of the service will affect how much it costs.


Outsourcing comes with risk. It’s important to weigh considerations of cultural climate and mores, efficiency, quality, and security if you’re considering business process outsourcing. The increased use of AI (and its implications) is another element to consider. It’s a wise idea to stay current on these topics.

Business process outsourcing can provide effective and robust support as your business grows. Keep these points in mind as you make your decisions.